Layer-2 network Blast becomes 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 line with on-chain information.

Etherscan data 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 data additional reveals that the protocol’s multi-sig pockets at present holds belongings 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 neighborhood as a result of its pyramid-like Blast factors system, which rewards early customers based mostly on the variety of customers they refer.

Particulars on the mission’s website define that customers obtain an extra 16% of factors when their referrals convey in additional members and an additional 8% if the next degree brings in further customers.

An intriguing side is that the inflows into the protocol stay one-directional, with no choice for withdrawal till its slated launch in February subsequent 12 months.

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

“[To be honest] Blast_L2 is the right illustration of why non-crypto folks 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 high of it. Whereas disabling withdrawals.”

In addition to 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 of fund theft.

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

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