Blast (BLSTR): The Only Ethereum L2 Offering Native Yield

One of the most exciting applications of blockchain technology is the ability to earn passive income. Through techniques like staking, investors can earn a risk-free interest rate while they wait for crypto prices to rise. Blast is a promising new network that's made crypto news because it's the only Ethereum L2 with native yield. How much money can you earn with Blast — and is it worth investing in? Discover the answers to these questions in our guide.

Key Takeaways:

• Blast is an Ethereum Layer 2 network that provides token holders with extra rewards. 

• Via auto rebasing and staking, Blast earns interest rates that are automatically passed back to Blast users, who can earn up to 5% interest rates.

What Is Blast?

Blast is an Ethereum Layer 2 network that provides token holders with extra rewards. Through auto rebasing and staking, Blast earns interest rates that are automatically passed back to Blast users, who can earn up to 5% interest rates

History of Blast

Blast's origins come from an entirely different project, Blur, an NFT decentralized exchange (DEX) that runs on Ethereum, uses optimistic rollup technology for scaling and is one of the leading NFT providers in the crypto world. Blur also made crypto news when it was discovered that its founder, Pacman, was actually a 24-year-old who had dropped out of both high school and MIT to found his first crypto project, Namebase, before Blur. After finding success with Blur, Pacman realized there was a need for a more versatile scaling solution on Ethereum. He decided to found a new company to focus on Layer 2 networks with native yield.

Blast's team now includes a mix of finance and gaming industry developers from Yale, MIT, Nanyang Technological University (NTU Singapore) and Seoul National University. They’ve raised over $20 million in funding from investors including Paradigm, Standard Crypto, Primitive Ventures and others.

What Does Blast Aim to Achieve?

Blast's first goal is to provide a more effective way of transacting on Ethereum. While working on his NFT marketplace and gaming ecosystem, Blast's founder realized there was a need for faster, cheaper Ethereum transactions. He chose to design a Layer 2 system that runs on Ethereum, but doesn’t require the full processing power of the main chain. This ensures transactions are still reliable and decentralized, but can also be more scalable.

However, Blast goes one step beyond other L2 chains: it aims to provide users with a way of earning significant interest from their investment in the chain. By offering native yields to users, Blast hopes to reward active participation and distinguish its chain from other scaling solutions. 

Blast also helps to solve the problem of asset depreciation by ensuring that people get a risk-free interest rate, no matter what the coin’s value is. The network’s design ensures that people get both ETH and T-Bill yield, just as they would on the main chain, but with the addition of an optimistic rollup service and other Layer 2 network scaling solutions.

How Does Blast Work?

Blast's ability to provide decentralized finance (DeFi) users with ETH yield income derives from the concept of ETH staking. On the main Ethereum network, users have the option of temporarily locking tokens to help validate Ethereum transactions. ETH staking plays a significant role in securing its network, promoting liquidity efficiency and maintaining Ethereum prices, so providers of this valuable service earn significant interest from their tokens.

Crypto users usually need to manage staking on a case-by-case basis. However, Blast’s ecosystem handles staking for its users, making it an L2 with native yield. As its network runs, it automatically bridges assets to the Ethereum main chain, where they're staked and begin to earn interest. The smart contracts in Blast's system collect this interest and automatically send it back to Blast to be redistributed to users in the form of ETH and stablecoins.

Features of Blast

Blast manages to stand out from other scaling solutions in the crypto space because of the total value of its features. It offers a helpful blend of scaling and income earning, so people who use its blockchain technology get the best of both worlds. Following are the main features you can access by working with Blast.

Native Yields

Unlike other passive income cryptos, Blast requires no work on your part. Instead, earning a native yield for ETH is intrinsically worked into the system. As long as you’re bridging assets to Blast, it’s offering native yields that grow your income. Blast users earn yields of 4% on all the money they input into the program, and yields are available for both ETH and other Ethereum network coins, such as ERC-20s.

Auto Rebasing for ETH

To work as an Ethereum L2 with native yield, Blast relies on auto rebasing. Via Ethereum's Shanghai Upgrade, Blast has implemented a system where the coins on its network automatically rebase, adjusting their value to account for ETH yield from the main chain.

T-Bill Yield for Stablecoins

To provide further earning options for users, Blast also has a stablecoin that uses MakerDAO's on-chain T-Bill yield protocol. This allows people to earn money from the fixed-rate interest available by buying Treasury bills. You can access Blast's auto-rebasing stablecoin by bridging stablecoins in exchange for USDB, which automatically earns interest, and then you can exchange it for USDC when you're ready to cash out. 

Note that there’s a 5% interest rate for Blast's auto-rebasing stablecoin.

BLSTR Airdrop

To reward active participation in the Blast ecosystem, Blast hosts multiple airdrops. In November 2023, it started airdropping BLSTR tokens to users of its system, and launched asecond Blast airdrop in January 2024 for developers. BLSTR tokens are currently locked in Blast airdrop recipients' wallets, who can begin withdrawing their tokens in February 2024. In May 2024, the BLSTR tokens from the airdrop will be redeemable.

Blast Road Map

So far, Blast has been focused on designing its system and launching an early access beta to test the concept of native yield for ETH. Blast hasn't yet released a definitive road map, but its team have announced some of their plans. In early 2024, the team plans to transition from their early access scheme to a publicly available mainnet launch. In addition, they’ve stated plans to convert BLSTR to a usable token in May 2024, so users can expect some big changes ahead.

Big Bang Competition

To help with community engagement, Blast hosted a Big Bang competition to encourage developers to build projects on Blast, such as gaming ecosystems or DEXs. Winners were announced in late February, and Blast plans on helping them build more projects on the Blast network. This competition is just part of the project’s ongoing plans to add a lot of exciting DeFi applications to Blast.

BLSTR Tokenomics

BLSTR is one of the native tokens on the Blast chain. It helps distribute rewards for users and bridge assets between blockchains. Blast hasn’t yet provided detailed tokenomics information for its crypto, so users still aren’t sure about the token's distribution plans and maximum supply.

BLSTR Price Prediction

There's some disagreement on the total value of Blast tokens. The promise of native yield appeals to a lot of ETH and stablecoins enthusiasts, and could potentially result in price increases. However, some crypto investors, such as Crypto Gorilla, suggest that Blast is similar to a Ponzi scheme. These doubtful analysts agree there could be some slight price increases at first, but BLSTR's price is likely to decline in the future. Since BLSTR tokens aren't for sale on most DEX systems yet, there’s little data to predict which of these viewpoints will be vindicated.

Is BLSTR a Good Investment?

BLSTR could be a promising token, as the idea of an Ethereum L2 chain with native yield appeals to users. It has an intriguing background and is designed by people with a proven history of success. All of these factors could point to impressive price increases for the Blast token.

However, BLSTR does have some potential red flags for investors. It hasn't provided extensive documentation on how its system works, so no one knows how tokens will be distributed or how Blast's algorithms work. This lack of information makes it harder for investors to make an informed decision on the token. Therefore, it's important to approach BLSTR with caution, and avoid overextending yourself to invest in this token. As always, DYOR before you invest.

The Bottom Line

Blast’s Ethereum-based network aims to revolutionize the crypto world and gaming industry by offering an L2 with native yield. This project has the potential to make it easier to build projects in the crypto space while also preventing asset depreciation. However, Blast is still in its early stages, and hasn't provided specific details regarding its tokenomics or proven its ability to handle liquidity efficiency and token inflation. Only time will tell whether Blast is going to play a significant role in the Ethereum network.

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