Blast

What is Blast?

Blast is an Ethereum Layer-2 (L2) platform that integrates yield generation directly into its structure, allowing Ethereum and certain stablecoin holders to earn yields simply by holding these assets within their wallets.

This integration of yield mechanisms into an L2 solution is designed to facilitate more productive use of blockchain assets, enabling them to generate income for their holders without requiring active participation in staking or yield farming protocols. By focusing on Ethereum (ETH) and stablecoins such as USDC, USDT, and DAI, Blast aims to offer a seamless and accessible approach to yield generation within the Ethereum ecosystem.

Who is Behind Blast?

The development of Blast is facilitated by an anonymous developer known as Pacman, who is involved in the team behind the Blur NFT marketplace, backed by YCombinator.

The project's initial funding was secured through a community-driven approach, accruing over $2 billion in a multisig wallet. Later on during the development process, established crypto VCs, such as Paradigm and Standard Crypto also issued funding for Blast.

Core Features and Functionalities

Blast integrates several key features to support its yield-generation and user experience goals, including:

• Auto Rebasing: The platform utilizes an auto-rebasing mechanism for ETH and its native stablecoin, USDB, to simplify the process of yield accrual for users. This feature is available for both individual wallets (EOAs) and smart contracts, aiming to enhance the efficiency of yield distribution.
• L1 Staking and T-Bill Yield: Blast leverages yields from L1 staking and T-Bill protocols (MakerDAO's tokenized US treasury bill protocols), transferring these earnings directly to its users. This model is designed to facilitate an automatic and direct distribution of yields to platform participants.
• Gas Revenue Sharing: Unlike many other L2 solutions, Blast incorporates a gas revenue sharing model that allocates net gas revenue back to dApp developers. This system allows developers to either retain these funds for their own use or to subsidize gas fees for their users.
• EVM-compatibility: EVM compatibility allows blockchains to execute smart contracts written in Solidity, the language used for Ethereum smart contracts. Blast is EVM-compatible, meaning that developers can easily port their Ethereum-based dApps to Blast. This provides a seamless transition for developers and users to migrate to Blast from Ethereum and expands the potential use cases of both.

On Blast, the base yield on ETH is 4%, while the yield on the proprietary USDB stablecoin can be as high as 5%.

Why do we need scaling solutions?

As Ethereum's popularity has grown, so has its network usage. With the increasing number of users and transactions, the network has become congested, leading to slower transaction speeds and higher fees.

To address these issues, Ethereum needs a scaling solution that can increase its transaction throughput and lower fees. The need for scaling is driven by the following factors:

Increased adoption: As more applications and users come onto the Ethereum network, the demand for faster and cheaper transactions increases.

Decentralization: Ethereum's vision of a decentralized world computer requires a network that can support many nodes and users without compromising security or performance.

Competition: With other blockchains offering faster and cheaper transactions, Ethereum risks losing users and developers to these alternatives if it cannot improve its scaling.

Transactions on the Blast Network

Blast functions as an optimistic rollup, which means that the network assumes that transactions are valid by default, avoiding the computational and time costs of proof-of-work or proof-of-stake consensus mechanisms for every transaction.

Here is what a typical transaction journey might look like on Blast:

1. Aggregation: Transactions are executed and processed off the main blockchain (Layer 1) within a separate environment. This environment can support multiple transactions simultaneously, leading to increased throughput. These transactions are bundled together into a single package, or rollup.
2. Submission: The rollup is then submitted back to the main blockchain. Since the rollup assumes transactions within it are valid, it does not include computational proof of each transaction's validity. Instead, it provides a cryptographic receipt of the transactions.
3. Optimistic Assumption: The term "optimistic" comes from the system's trust that transactions in the rollup are valid without immediate proof. This drastically reduces the data and computation needed to be processed by the main blockchain, leading to efficiency gains.
4. Fraud Proofs: To ensure security, the system allows a challenge period during which participants can submit proofs of fraud if they believe a transaction within the rollup is invalid. If a transaction is proven fraudulent, it is reverted, and the party that submitted the fraudulent transaction can be penalized.
5. Finalization: If no challenges are raised within the challenge period, or if challenges are resolved, the transactions are considered final on the main blockchain.

How is Blast Different from Other L2s?

Blast differentiates itself from other Ethereum L2 solutions through its native integration of yield-generating mechanisms and its focus on user accessibility. Unlike other L2 platforms that may require users to actively participate in staking, liquidity provision, or yield farming to earn returns, Blast simplifies this process by automating yield generation for ETH and stablecoins held within the platform. 

Additionally, its use of auto-rebasing for its native stablecoin, USDB, and ETH holdings further distinguishes it by ensuring that yields are seamlessly integrated into users' balances.

Launch

Blast has launched its mainnet on February 29, 2024, at 9:00 pm UTC. This launch allowed over 180,000 users to access their funds, which attracted $85 million in annual yield. The road to the mainnet launch was marked by a period of Early Access during which 181,888 community members bridged $2.3 billion to Blast, earning a total of $85 million per year through Blast Points and native yield. 

The network’s total value locked (TVL) subsequently fell to $520 million after the launch, with nearly $1.8 billion withdrawn. Assets on the platform included approximately 479,000 ETH, 78.5 million USDC, 68.3 million USDT, 148,000 stETH, and 31 million DAI.

Using Blast

Setting Up a Wallet for Blast: To start using Blast, users first need a compatible wallet. Since Blast is an Ethereum Layer-2 platform, any Ethereum-compatible wallet should work. This includes popular options like MetaMask (Chain ID: 81457), WalletConnect, and Ledger hardware wallets. Once a user has set up their wallet, they can connect it to the Blast platform via its user interface, which is designed for ease of navigation and clarity.

Bridging Assets to Blast: The next step involves bridging assets from the Ethereum mainnet to Blast. This process is facilitated by Blast's bridge interface, where users can select the assets they wish to transfer to Blast, such as ETH, USDC, USDT, and DAI. The bridging process is integral to enabling the yield-generating mechanisms of Blast for the user’s assets. Bridged assets are transformed into their Blast counterparts, enabling them to start accruing yield automatically.

Earning Yield on Blast: Once assets are bridged, the yield generation begins automatically. For ETH, this involves participation in ETH staking mechanisms, while stablecoins like USDC, USDT, and DAI engage in on-chain T-Bill protocols managed by the platform. The automatic rebasing feature of Blast ensures that the yields are periodically distributed to users' wallets, reflecting in their increased asset balances over time. Users do not need to perform any additional actions to earn this yield, making Blast an attractive option for passive income generation.

Interacting with DApps and Services: Blast supports a range of decentralized applications (DApps) and services, leveraging its EVM compatibility. Users can explore and interact with various DApps within the Blast ecosystem, benefiting from the platform’s integrated yield mechanisms and potentially lower gas fees compared to the Ethereum mainnet. Whether it's participating in decentralized finance (DeFi) protocols, exploring NFT marketplaces, or utilizing decentralized exchanges (DEXs), Blast aims to provide a rich ecosystem for its users.

Withdrawing Assets: Users can choose to withdraw their assets back to the Ethereum mainnet at any time. The withdrawal process involves sending the assets from Blast back through the bridge, converting them from their Blast-specific versions to their original form on the Ethereum mainnet. This process is designed to be as straightforward as bridging assets to Blast, ensuring users can manage their assets fluidly across both platforms.