Blast Fundamental Analysis

What Is Blast

Blast is the first L2 solution for Ethereum that provides the ability to generate native yields from ETH and stablecoins stored in the Blast network.

The source of yield comes from ETH staking and RWA (Real World Assets) protocols. The default rate of return for ETH was 4% for ETH and 5% for stablecoins, the current rate of return is 7% for stablecoins and 3.4% for ETH.

Blast is an Ethereum Virtual Machine (EVM)-equivalent Optimistic Rollup. The goal of Blast crypto platform, like other L2 solutions, is to provide higher Ethereum throughput and lower transaction fees while maintaining security. Blast accomplishes this by “batching” transactions (one batch can contain up to 10,000 transactions).

Information about the transactions and the current state of the L2 network is then transmitted and validated to Ethereum, but the transaction execution processes occur off-chain, which significantly reduces network load and transaction costs.

As an Optimistic Rollup, Blast blockchain operates on the principle that all transactions are valid until proven otherwise. Optimistic Rollup technology has become widespread and many L2 solutions, such as Arbitrum, Optimism, Base, Mode, work on it today.

You can read more about Optimistic Rollup technology in our Optimism ecosystem overview.

Because Blast is an EVM-equivalent blockchain, it allows application developers to run applications already existing on EVM networks on Blast without having to modify the original code. This greatly simplifies interaction with the Blast network and makes it more accessible to developers.

Blast Features and Technology

A key feature of Blast blockchain is the provision of native yields on assets that are bridged into the network (ETH and stablecoins).

Blast's approach to yield is based on the concept of Risk-free Interest Rate (RFR). When holding ETH in a wallet on any L1 or L2 blockchain, users face losses due to inflation, which equals the yield on the ETH staked.

Thus, all ETH that is not being held in the staking, yields a loss equal to the APR on the staking (this does not take into account the volatility of the ETH). Blast solves this problem by providing ETH holders with an underlying yield equal to the yield from staking without the need to deposit ETH into steaking or liquid steaking protocols.

When ETH is deposited into Blast, the protocol automatically sends it to Lido Finance for staking. Users receive income from the principle of rebase tokens - the balance of ETH on the wallet gradually grows. Due to compound interest, the profit will increase over time, as interest will be credited to your current ETH balance (which also increases).

In addition to ETH, Blast also provides yields on stablecoins. Deposits in stablecoins are converted into USDB, a native stablecoin from Blast with an auto-rebate feature.

USDB currently has a yield of 7%. The source of the yield is tokenized T-Bills (Treasury Bills) from MakerDAO. T-Bills are short-term U.S. Treasury bonds with maturities ranging from 3 months to a year.

As in the case with ETH, USDB holders receive yields based on the principle of rebase (increasing the number of USDB in the account). When USDB is withdrawn from the blockchain, it can be exchanged for DAI.

In the future, the Blast community can add new sources of yield or completely replace MakerDAO with other protocols.

Another Blast network feature is the sharing of revenue from transaction fees with app developers, who can use them for their own purposes or to compensate users.

Key Blast Metrics

Following are Blast key metrics as of July, 2024.

Daily Active Blast Addresses (7D Average) - 46.1K

Daily Blast Transactions (7D Average) - 4.1M

Daily TPS - 7.65 transaction per second

Total Value Locked (7D Average) - $1.3B

DEX Trading Volume (7D Average) - $472M

Blast Key Metrics. Source: Artemis

As you can see in the charts, all the main on-chain metrics peaked in June, followed by a sharp decline in all metrics. Thus, TVL fell from the peak of $2.3B to $1.3B, the number of active Blast addresses from 150K to 46K.

The reason for this decline is the activity of users to get the BLAST token drop, the distribution and listing of which took place just at the end of June. Therefore, we can say that the demand for using Blast was largely speculative and fell sharply after the first token drop.

Blast: Comparison with Competitors

The main competitors of Blast are other L2 solutions. These are primarily Optimism rollups: Arbitrum, Optimism, Base, Mode and rollups using ZK (Zero-Knowledge) proofs, such as Scroll, Linea, zkSync, Starknet. The table below comparesBlast's key technical and economic metrics with its competitors.

Source: Artemis, L2Beat

As you can see from the table, Blast blockchain is among the top 5 L2 solutions in terms of TVL, average transactions per day and trading volumes on DEX.

However, in terms of market capitalization and FDV, Blast lags significantly behind its competitors, having the lowest valuation of the L2 solutions represented.

At the same time, Blast blockchain revenues are ahead of some competitors, although significantly behind the segment leaders.

Blast Team and Partnerships

The Blast team consists of experienced industry players who have created well-known crypto projects in the past.

For example, the central figure in Blast network is Pacman, the creator of one of the largest NFT marketplaces Blur. Pacman acts as the frontman and media face of Blast, increasing awareness and trust to the brand.

The Blast team has experience developing not only on Ethereum, but also on other blockchains such as Solana.

Blast has raised $20M investment from leading crypto funds such as Paradigm, Standard Crypto and crypto angels: Andrew Kang, Hasu, Santiago R. Santos.

Blast Ecosystem

Thanks to the ease of running apps on Blast blockchain, as well as a program to reward developers and users through BLAST token drops, the project has developed a vast ecosystem of protocols and apps across crypto industries, from DeFi to SocialFi to GameFi.

Among DeFi projects, the leaders in TVL are DEX Thruster, the Juice Finance leveraged farming protocol, and the recently launched DEX Ring Protocol aggregator.

Top 10 DeFi Protocols by TVL on Blast. Source: DefilLama

According to DefilLama, there are a total of about 120 decentralized apps running on Blast that have a non-zero TVL.

The BLAST token

BLAST is the main token of Blast and is used to manage the Blast Network and Foundation. Holders of the BLAST token have the right to initiate and vote on proposals for changes to the current risk management of the protocol, sources of yield for ETH and USDB, creation of a reserve fund, and other aspects.

The total BLAST token supply is 100B, circulating at 18.1B (18.1%). 50% of the supply is allocated to the community, some tokens (14%) have already been distributed to users as part of the first BLAST token drop.

25.5% of tokens are allocated to core contributes, 16.5% to investors and 8% to Blast Foundation. The closest token distribution to core contributors and investors will take place in July 2025.

Blast Tokenomics. Source: https://docs.blast.io/tokenomics

Users can get BLAST and any other cryptocurrency for fiat or crypto on SimpleSwap.

Summary

Blast blockchain is an innovative Layer 2 solution for Ethereum that enables native yields from ETH and stablecoins through staking and real-world asset (RWA) protocols.

By using Optimistic Rollup technology, Blast increases Ethereum's throughput and lowers transaction fees.

Blast stands out by offering native yields on ETH and stablecoins, and by allowing seamless integration with existing EVM applications.

Despite recent declines in key metrics due to speculative demand, Blast remains competitive among L2 solutions, particularly in transaction volumes and decentralized finance activities.

Backed by experienced developers and significant investment, Blast has cultivated a robust ecosystem and continues to grow, driven by its unique yield offerings and strategic partnerships.