Research Summary
The report discusses the launch of Blast, a layer2 solution by Blur’s founder, Pacman, which has raised $20 million in funding and accumulated over $520 million in funds within six days. The report also addresses market concerns about Blast’s contract security and its aggressive model. It further explores the impact of Blast on other L2 chains and Blur, suggesting that Blast is part of Pacman’s strategy to expand Blur’s NFT trading market footprint.
Key Takeaways
Blast’s Rapid Accumulation of Funds
- Blast’s Quick Success: Launched by Blur’s founder, Pacman, Blast is an OP Rollup-based layer2 solution that has secured $20 million in funding from investors including Paradigm and Standard Crypto. Within less than six days, Blast had accumulated over $520 million in funds, surpassing other L2 solutions like zkSync Era.
Market Concerns about Blast
- Contract Security Concerns: The market has raised concerns about Blast’s contract security, noting that it lacks the validity proofs required for an L2 state root or a fraud-proof mechanism. In response, Blast officials emphasized the security of each key in the multisig, stating that they are independently secure, stored in cold storage, managed by independent parties, and geographically separated.
- Concerns about Blast’s Aggressive Model: Blast’s aggressive model, which relies on a simple intermediary custodial contract to attract hundreds of millions of dollars in locked-up assets, has also raised concerns. However, the report suggests that this model is rational, backed by renowned institutions, and follows the precedents set by successful projects.
Impact of Blast on Other L2 Chains
- Minimal Impact on Other L2 Chains: Despite concerns that Blast could create a shockwave for other L2 chains, the report suggests that Blast’s rapid achievement of over $500 million in TVL is not a result of draining resources from other L2. The core data of mainstream L2s is not significantly affected, and most are expected to maintain their current status and operational strategies.
Impact of Blast on Blur
- Blast as Part of Blur’s Strategy: The report suggests that Blast should be viewed as part of Pacman’s strategy to expand the NFT trading market footprint of Blur. With the launch of Blast, Pacman also introduced a staking mechanism for BLUR, allowing users to earn points representing airdrops.
Future Prospects for Blast
- Potential for Blast’s Expansion: As an L2, Blast will inevitably open up to more protocols and developers. It’s possible that in the future, instead of relying on Lido, it could establish its own native staking protocol. Moreover, significantly reduced transaction costs may stimulate more spot trading volume.
Actionable Insights
- Understanding Blast’s Model: Investors and market participants should understand Blast’s aggressive model, which relies on a simple intermediary custodial contract to attract funds. This understanding can help them make informed decisions about their involvement with Blast.
- Monitoring Blast’s Impact on Other L2 Chains: Stakeholders should monitor the impact of Blast on other L2 chains to understand the dynamics of the L2 market and the potential effects of new entrants.
- Exploring the Connection between Blast and Blur: The connection between Blast and Blur, as part of Pacman’s strategy to expand Blur’s NFT trading market footprint, is worth exploring for those interested in the NFT market.
