Layer-2 community Blast turns into third-largest holder of staked Ethereum amid pyramid scheme allegations

Blast, a newly launched Ethereum (ETH) layer-2 community promising “native yield” on ETH and stablecoin holdings, swiftly secured the place of the third-largest holder of staked ether in simply three days post-launch, in response to on-chain knowledge.

Etherscan knowledge signifies that the platform has amassed over 140,000 staked Ethereum, valued at roughly $286 million, using the liquid staking protocol Lido since its inception on Nov. 20. This accumulation represents roughly 1.5% of the full staked Ether quantity.

Debank’s knowledge additional exhibits that the protocol’s multi-sig pockets presently holds property value greater than $335 million, comprising Lido’s staked Ether and MakerDAO’s stablecoin DAI.

Controversy Surrounds Blast’s Pyramid-Like System

Nonetheless, the speedy development of Blast over the previous three days has triggered robust criticism throughout the crypto group attributable to its pyramid-like Blast factors system, which rewards early customers primarily based on the variety of customers they refer.

Particulars on the challenge’s web site define that customers obtain a further 16% of factors when their referrals carry in additional individuals and an additional 8% if the next stage brings in further customers.

An intriguing side is that the inflows into the protocol stay one-directional, with no possibility for withdrawal till its slated launch in February subsequent yr.

Simon Dedic, the CEO and managing associate of crypto funding agency MoonRock Capital, acknowledged that Blast’s distinctive promoting level is its “Ponzi airdrop farming.” He added:

“[To be honest] Blast_L2 is the proper illustration of why non-crypto individuals hate Web3. [It is not]a technical development to any of the opposite L2s, nor does it supply any thrilling functions to make use of on prime of it. Whereas disabling withdrawals.”

Apart from its Ponzi-like construction, consideration has been drawn to Blast’s multi-sig pockets.

Polygon engineer Jarrod Watts believes the protocol wants 3 out of 5 signatories to authorize suspicious actions. Watts highlighted that the addresses related are new and have unknown identities.

Nonetheless, regardless of the inherent dangers, Watts doubts the potential for fund theft.

Equally, Cos, the founding father of SlowMist, famous that Blast operates as an upgradeable contract with a 3/5 multi-signature setup and lacks a time lock.