🌎 Blast Blockchain Sees $1.7 Billion Withdrawn Post-Launch

The Blast blockchain, a layer-2 network on Ethereum, recently experienced a significant withdrawal of $1.7 billion in initially staked Ether by investors. This data comes from DeFiLlama, showing that the majority of assets were withdrawn within the first 24 hours post-launch. Blast had garnered attention for offering native yield on the Ethereum (ETH) L2, accumulating over $2 billion in deposits before going live through a mechanism called points farming.

Despite the initial excitement, the network saw substantial outflows, with the balance of the Blast bridge contract decreasing by approximately 70%. However, not all funds are leaving the network, as some are transitioning into Blast’s ETH Yield Manager Proxy, indicating a capital movement within the ecosystem.

The launch of Blast was not without controversy, as an optimistic rollup design requires a 14-day waiting period and Ethereum gas fees for withdrawals back to the mainnet, a detail that some investors claim they were unaware of. Additionally, the network witnessed its first exit scam when the protocol ‘RiskOnBlast’ disappeared along with $1.3 million worth of Ether.

Blast’s journey from a deposit-gathering initiative to a live network has been met with mixed reactions. While some critics compared its deposit-only bridge to a pyramid scheme, supporters have praised its potential to enhance Ethereum’s scalability.

Despite the challenges, Blast has retained significant deposits, potentially making it the third-largest layer-2 network on Ethereum. The project, backed by Paradigm and led by NFT decentralized application Blur founder Tieshun Roquerre, has been both a marketing success and a subject of criticism due to delays in transitioning from a concept to a functional project.

With over 85,000 accounts in its Discord community and 57,000 wallets interacting with the chain since its launch, Blast’s ecosystem continues to grow, despite concerns about the viability and security of new projects within its ecosystem.

Read more: Ethereum’s Buterin voices caution on Layer 2 risks amid scalability push