Blast’s founder denied allegations that the undertaking was a Ponzi

Faced with developing criticism in the cryptocurrency local community, the founder of the newly launched layer-two Blast undertaking had to clarify.

As reported by Coinlive, one particular of the tasks that obtained a great deal of interest in the cryptocurrency industry final week was Gust, a layer two remedy on Ethereum that pledges to shell out higher curiosity charges to ETH and stablecoin depositors. After just four days of launch, Blast attracted interest additional than $440 million in deposits by just about 53,000 end users.

Blast reached $443 million in TVL in four days.

52,836 local community members are now earning yield (~four% for ETH and five% for stables) + Blast Points. pic.twitter.com/yiakjeKlss

— Blast (@Blast_L2) November 24, 2023

However, lots of traders, just after examining the information and facts supplied by Blast, accused the project’s working model of getting just a ponzi, when there is no testnet or mainnet but, but rather it is just a multisig wallet to hold money devoid of revealing the identity of the five portfolio managers. Investor money deposited into Blast will be blocked until finally the mainnet launches in February 2024.

Furthermore, Blast’s “pyramid” tiered referral reward system also manufactured lots of persons make enjoyable of the reality that the undertaking did not even test to hide its Ponzi nature.

Faced with mixed reactions from the local community, each Blast’s X account (Twitter) and Pacman’s founder intervened in the early morning of November 25th to reassure.

one/ There’s a meme going about that Blast is a Ponzi. The yield Blast provides end users could appear as well great to be accurate, so this meme is understood. But to place it merely, the throughput that Blast delivers (at first) from Lido and MakerDAO.

Lido’s yield comes from ETH staking…

—Pacman | Blur + Explosion (@PacmanBlur) November 24, 2023

Pacman mentioned he has viewed lots of feedback calling Blast a ponzi, saying the curiosity charges they present are unsustainable. Pacman says Blast’s curiosity stems from the undertaking bringing consumer money to rewarding deposits on DeFi protocols like Lido and MakerDAO, so the curiosity is fully true.

Pacman also denied that investment fund Paradigm was straight concerned in implementing Blast, revealing that if Paradigm intervened, lots of factors of Blast would have to adjust and could not be maintained as they at the moment are. The founder admitted that he has asked Paradigm for assistance on some technological elements, but the choice-creating energy nevertheless belongs fully to the Blast advancement staff.

As for the referral rewards system, Pacman says it is required to entice a continuous movement of end users to help the economic system that is getting constructed on degree two. He mentioned that even end users who invite buddies to join Blast they enable the undertaking, so they need to be rewarded.

Meanwhile, Blast’s submit mentions the likelihood of working with a multisig wallet to shop users’ deposits. Layer-two claims that this layout has verified to be safe and has been adopted by lots of very similar tasks this kind of as Optimism, Arbitrum, and Polygon.

On multi-signature safety.

Read this thread to recognize Blast’s safety model along with other L2s like Arbitrum, Optimism, and Polygon.

— Blast (@Blast_L2) November 24, 2023

The intelligent contract of this multisig wallet is upgradeable to give the undertaking the potential to react to sudden incidents.

Blast also stated that the holders of the five keys to unlock the multisig wallet are all seasoned authorities in the cryptocurrency marketplace, but did not reveal their identities. Layer-two mentioned it has utilized approaches to decrease the chance of vital publicity, from storing in cold wallets, to geographical separation and getting no three/five keys working with the similar cold wallet support supplier to stop typical losses.

Coinlive compiled

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