Web3 protocol Blast has reached $823 million in total value locked (TVL) in the weeks since its controversial launch in mid-November, with a return of 26.5% in the past seven days, according to data from DefiLlama. .
Behind Blast’s rapid growth is a unique business model. This protocol is a scaling solution for the Ethereum network and provides a default rate of return to users who stake their funds. Users who stake are promised a 4% return on Ether (ETH) and a 5% return on stablecoins.
However, the emergence of the protocol was marked by challenges and unpopular developments. November 30th, Blast exposed Users staking on the protocol saw $100,000 disappear after converting their deposits to Dai (DAI). The issue was caused by a misconfigured slippage parameter in the user interface, which led Blast to pay the user $10,000 in compensation.
The 10% compensation will be funded by a portion of Blast’s $20 million in capital raised from investors such as venture capital firm Paradigm, which lost $278 million on bankrupt cryptocurrency exchange FTX. But Blast’s relationship with Paradigm faces its own challenges.
In late November, Dan Robinson, head of research at the venture capital (VC) firm, issued a statement saying he disagreed with Blast’s strategy of launching the bridge before the layer 2 network is live. Blast plans to launch a testnet and conduct developer airdrops in January, and the mainnet is scheduled to launch in February.
“We think this sets a bad precedent for other projects,” Robinson said. wrote X (formerly Twitter) adds that much of its marketing strategy is lowering the cost of work for serious teams.
Blast and Paradigm have been working together to address this issue, but the VC firm’s role in the startup’s decision-making remains unclear, as is Blast’s governance structure and technical documentation.
Another notable discussion regarding the protocol is the lack of a withdrawal feature. Users who deposit and stake at Blast believe the team will add withdrawal functionality in the coming months.
Despite these challenges, Blast gained over 75,000 members in just a few weeks and is currently employ Senior engineer for future deployments.
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