Blast Protocol Hits $823 Million in TVL and Faces Challenges
The Web3 protocol Blast has achieved a total value locked (TVL) of $823 million shortly after its controversial launch in mid-November. The protocol has experienced a 26.5% gain over the past seven days, according to data from DefiLlama.
Unique Business Model Drives Blast’s Growth
Blast stands out due to its unique business model as a scaling solution for the Ethereum network. It offers native yields to users who stake their funds. Users can expect a 4% yield on Ether (ETH) and a 5% yield on stablecoins.
Challenges and Controversies Surround Blast
Blast has faced challenges and unpopular developments since its emergence. One incident involved a user losing $100,000 after converting a deposit to Dai (DAI) due to a misconfigured slippage parameter on the user interface. Blast compensated the user with $10,000.
Furthermore, Blast’s relationship with investor Paradigm, which lost $278 million on bankrupt crypto exchange FTX, has encountered difficulties. The head of research at Paradigm expressed disagreement with Blast’s strategy of launching a bridge before its layer-2 network goes live.
Uncertainty Around Governance and Functionality
The governance structure and technical documentation of Blast remain unclear, raising concerns among stakeholders. Additionally, the lack of withdrawal functionality on the protocol is another noteworthy discussion.
Growing User Base Despite Challenges
Despite these challenges, Blast has attracted over 75,000 members in just a few weeks. The protocol is currently hiring senior engineers for its upcoming deployments.
Although Blast Protocol has achieved impressive growth and locked a substantial amount of value, it has encountered several challenges and controversies. The incident involving the loss of funds and the disagreement with investor Paradigm have raised concerns about the protocol’s governance and decision-making processes.
However, Blast continues to attract a growing user base, demonstrating its potential in the market. As the protocol addresses these challenges and works towards improving its functionality, it remains to be seen how it will navigate these obstacles and maintain its momentum in the evolving crypto landscape.
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