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Home»ETHEREUM NEWS»Layer 2 network Blast has become the third-largest holder of staked Ethereum following allegations of a pyramid scheme.
ETHEREUM NEWS

Layer 2 network Blast has become the third-largest holder of staked Ethereum following allegations of a pyramid scheme.

By Crypto FlexsNovember 24, 20232 Mins Read
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Layer 2 network Blast has become the third-largest holder of staked Ethereum following allegations of a pyramid scheme.
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According to OnChain, Blast, the newly introduced Ethereum (ETH) Layer 2 network, promises a “default rate of return” on ETH and stablecoin holdings, positioning itself as the third largest Ethereum holder in just three days after launch. ​​Secured it quickly. data.

Since its launch on November 20, the platform has accumulated more than 140,000 staked Ethereum worth approximately $286 million, leveraging Lido, a liquid staking protocol, according to Etherscan data. This accumulation represents approximately 1.5% of the total amount of staked Ethereum.

Data from Debank shows that the protocol’s multi-sig wallet currently holds more than $335 million in assets, including Ether staked by Lido and MakerDAO’s stablecoin DAI.

Controversy surrounding Blast’s pyramid system

However, Blast’s rapid growth over the past three days has sparked strong criticism within the cryptocurrency community due to the pyramid-shaped Blast points system that rewards early users based on the number of users they refer.

Details on the project website state that users will receive an additional 16% of points for bringing in more participants through referrals, and an additional 8% of points for bringing in additional users in subsequent stages.

What’s interesting is that inflows into the protocol will remain one-way with no withdrawal option until its scheduled launch in February next year.

Simon Dedic, CEO and managing partner of cryptocurrency investment firm MoonRock Capital, said Blast’s unique selling point is its “Ponzi airdrop farming.” that Added:

“(To be honest) Explosion_L2 This perfectly illustrates why non-cryptocurrency people hate Web3. (It is) not a technological advancement over other L2s, nor does it offer any interesting applications that can be used on top of it. While disabling withdrawals.”

In addition to Ponzi-like structures, Blast’s multi-signature wallet has garnered attention.

Polygon Engineer Jarrod Watts Believe The protocol requires three out of five signatories to approve any suspicious activity. Watts emphasized that the address involved was new and his identity was unknown.

But despite the inherent risks, Watts suspects the funds could be stolen.

Likewise, SlowMist founder Cos noted that Blast works with upgradable contracts with a 3/5 multi-signature setup and has no time locks.

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