Technology

Blast Layer-2 Chain Sees $1.6B Withdrawn in First 24 Hours – Crypto News

Published

1 year ago

March 1, 2024

Dripp

Ethereum’s Blast layer-2 network launch has been met with excitement and fear, with nearly $1.6 billion of its initial deposits being withdrawn by investors within the first 24 hours. As witnessed in Defillama data, this movement of funds has highlighted the challenges new platforms face to establish themselves.

Rapid Decline in Total Value Locked

Per the Coingape reports, the Blast network boasted a total value locked (TVL) of $2.3 billion upon its launch. These numbers were, however, slashed to $650 million since users started withdrawing their funds from the platform. The network, therefore, that had presented itself as a promising new player in the Ethereum community, providing an ether (ETH) native yield on staked ETH, saw its fortunes change dramatically in a day.

The initial allure of Blast was partly due to its innovative approach to generating yield for its users. Users were also promised Blast points by staking their ETH, which could later be exchanged for a token airdrop. This incentive mechanism attracted many investors eager to capitalize on the potential gains. Moreover, the network pledged to distribute 50% of its upcoming airdrop to developers, further enticing participation from the broader crypto community.

Blast’s Controversy and Skepticism

Despite its early success in attracting deposits, Blast faced skepticism from various quarters of the crypto world. Critics drew parallels between its deposit-only bridge and the mechanisms employed by pyramid schemes, casting a shadow over its legitimacy.

Initially, the controversy did little to deter investors, as the promise of high yields and airdrops kept the deposits flowing. Nevertheless, the rapid withdrawal of funds post-launch suggests a fragile confidence in the network’s long-term viability.

Integration and Expansion Efforts

To secure its ecosystem and retain the investors’ confidence, Blast plans to perform integrations with Zora and Pyth, among others. Being on this strategy will look toward enhancing its utility and bringing together its more functional and strong decentralized app (dApps) development infrastructure. Nonetheless, the long-term effect of these integrations in the investment atmosphere is yet to be established since the network is still in its infant stages.

With the end of the first day, the fate of the Blast is in a balance. The network’s capability to engage and involve users and attract new deposits will decide whether layer 2 will compete favourably with its rivals. Moreover, investors and industry observers will closely watch its response to the challenges of maintaining security and fostering user trust.