BLAST $354 Million Token Airdrop Makes the Price Soar and Crash

On Jun 26th Blast, the rapidly growing Ethereum L2 made its debut airdrop providing users with 14 billion $BLAST tokens. Considering Blast's popularity, the expectations were sky-high, however many holders decided to sell their $BLAST share immediately after the drop. A mixture of emotions is now flowing through the Blast community with some speaking of disappointment.

Phase One $BLAST Airdrop

Blast has a total supply of 100 billion tokens, during the Phase One of the airdrop on Jun 26th 17 billion of them have been unlocked. The rewards were distributed according to the amount of collected "Blast points" and "Blast Gold", which could be accumulated since the launch of the Blast network by participating in its ecosystem.

The first 7 billion tokens have been distributed to Blast points holders. The same share went to Blast Gold holders and the last 3 billion tokens were used to support Blur Foundation.

Initially, the price of $BLAST token opened at $0.025, which together values the community-dedicated tokens to around $354 million. However, this initial price quickly got under a lot of selling pressure as people started offloading their $BLAST - this has led to a steep drop of almost 20% in less than 1 hour. Since then, the price has been recovering slowly and as of this time is almost at the opening level.

Source: CoinGecko

Market and Community Reaction

As mentioned the expectations for this airdrop were quite high and for some the relatively low opening price of $BLAST has been a bit disappointing. This is partially due to the fact that the pre-market price of $BLAST was as high as $4.40. The initial selloff began to depreciate users accumulated $BLAST, which may have led to a downward spiral.

Its literally only Sells on $BLAST.
I am worried. pic.twitter.com/J40ZVZsnC8

— Easy (@EasyEatsBodega) June 26, 2024

Considering other assets, the overall market sentiment seems to remain neutral as not many price catalysts have occurred in the past few days.

Blast Network

The Blast network has gathered substantial community attention and TVL (Total Value Locked) in the last months. Users seem to be enjoying the native yield on ETH and WETH (around 4% APY) and on Blast stablecoin $USDB (around 5% APY). Yields on Blast come mainly from L1 staking and T-Bill protocols (such as MakerDAO's tokenized US treasury bill protocols), passing these earnings directly to its users through Auto Rebasing. This approach is intended to ensure an automatic and straightforward distribution of yields to participants on the platform.

Read More: What is the Potential of BLAST - The New Layer 2 Set to Transform NFT & DeFi Trading?

Blast has become one of the most popular L2s with over 100,000 daily active addresses mainly used for trading and DeFi thanks to its fast transactions and low fees. The development of Blast is led by an anonymous developer known as Pacman, who is also part of the team responsible for the Blur NFT marketplace and has strong VC backing from Paradigm and Standard Crypto.

Many dApps on Blast were growing rapidly, partially due to the expectation of the BLAST Phase One airdrop, which required active participation in the ecosystem. Notable projects include for example the Pacmoon memecoin ($PAC) or the SocialFi Trading Card Game Fantasy.top.

You can now natively screen and analyze Blast tokens with CoinBrain!

Future Expectations

It appears that the price of $BLAST has already recovered from its initial shock and is beginning to grow steadily. Although the current incentive for holding $BLAST is low we can speculate on the form of the alleged Phase Two airdrop, which at this time we know very little of. Utility of the $BLAST token should be another key factor influencing the TVL of the Blast network - whether it be staking, farming, or another form of incentivization.