Blast, true to its name, made waves right from its introduction, not only due to its innovative solution but also its highly-discussed airdrop model. The project officially launched its mainnet on February 29th, and in today's blog, we'll explore this unique ecosystem.

Overview of Blast Ecosystem in the Early Days of Mainnet

Getting Started

Blast is an Ethereum Layer 2 scaling solution utilizing Optimistic Rollup and compatible with EVM. Its biggest differentiator from other solutions is its provision of interest based on the amount deposited into the network.

True to its explosive name, Blast made headlines from the get-go, not only with its innovative solution but also with its much-talked-about airdrop model. Despite any reasons, Blast remains the Layer 2 protocol with the most impressive TVL growth rate to date. It only took 3 months for Blast's total locked value (TVL) to skyrocket from 0 to $2.2 billion USD, even before its mainnet launch.

Blast's TVL before mainnet launch. Source: Defillama on March 6th, 2024

Overview of Blast

Blast's theory posits that all other Layer 2s are squandering a significant amount of money, namely the funds locked in bridges. This money lies dormant in smart contracts and gradually erodes due to inflation. Therefore, Blast decided to unlock interest for this money.

In conventional Layer 2s, when users want to utilize the protocol, they need to deposit money into a project's smart contract on Layer 1 Ethereum. Then, on Layer 2, a corresponding amount of tokens is minted to represent the locked funds. Users use these new tokens for activities on Layer 2, and when no longer needed, they can withdraw funds back to Layer 1 through a bridge smart contract. The money users deposit remains locked in the smart contract until a withdrawal request is made.

Blast, however, takes a different approach. Instead of locking users' funds in a smart contract, the project invests this money in profitable DeFi activities. Specifically, Blast seeks profits from two main sources:

• L1 Staking: ETH from users is automatically staked on the Lido protocol to earn profits from Ethereum network operations.

• T-Bill Yield: If users bridge stablecoins, these funds are also automatically deposited into MakerDAO's T-Bill protocol to earn profits from US government bonds.

The profits obtained are redistributed to users through Blast's rebasing mechanism (i.e., the balance increases in users' wallets without needing to claim or do anything else).

In addition to the interest generated from users' deposited assets, Blast also has an open mechanism for DApp developers to retain or share revenue from gas fees with end-users. According to Blast's documentation, users can earn around 4% with ETH and 5% with stablecoins.

Overall, Blast's infrastructure focuses entirely on the keyword "yield," and in the following sections, you'll see how Blast builds its ecosystem around this keyword.

Advantages and Drawbacks

The advantage of this model is that it unlocks interest for all funds on Layer 2, helping users earn additional profits to combat inflation and providing Layer 2 with additional revenue to develop the ecosystem.

However, the trade-off is security; Blast sacrifices security for this yield source. Although the project chooses staking on Lido and purchasing US government bonds through MakerDAO, both are high-security options. But in case of any issues arising from partner entities, it will affect users' assets.

Blast Ecosystem

Blast officially deployed the mainnet version on the last day of February. The amount of TVL reached 2.4 billion USD after only 4 days of launch, marking the upcoming growth of the ecosystem.

Previously, the project also launched the Big Bang Competition event to attract developers with 3000+ participating teams and selected 47 winning projects in 8 different categories.

Spot DEX (Decentralized Exchange)

1. Thruster: A pioneering Dex on Blast with tools for fair launches and liquidity provision. Offers opportunities for LP mining, analytics, and enhanced user experience.

2. Ambient Finance: An AMM combining centralized liquidity, fungible full-range xyk LP tokens, and on-chain limit orders.

3. Bebop: An application and API providing smooth spot trading efficiency.

4. Mangrove: An order book exchange allowing LPs to restake outstanding liquidity from other protocols.

5. Ring Protocol: A Dex enabling liquidity providers to earn swap fees and yields from base assets or RWA. Other Projects: Bladeswap, Blaster Swap, MonoSwap, and more.

Perpetual DEX

1. 100x Finance: A CLOB (Central Limit Order Book) exchange with low latency on Blast, focusing on scalability, capital efficiency, and liquidity.

2. Blast Futures Exchange (BFX): A perp dex order book platform enabling users to earn native yield.

3. Blitz: A hybrid exchange supporting both spot and futures trading, aiming for a CEX-like experience.

4. Bloom: A futures trading platform offering smooth transactions with zero gas fees.

Other Projects: InfinityPools.finance, SynFutures, Aark, DTX, HMX, Opyn, and more.

Lending Protocols

1. Fragment: A decentralized lending and borrowing protocol optimized for yield-bearing assets.

2. Juice Finance: Enables users to leverage and participate in yield farming and trading across the Blast ecosystem.

3. MetaStreet: Provides infrastructure for yield farming.

4. Orbit Lending: Offers lending and borrowing solutions on Blast.

5. Pac Finance: A hybrid lending protocol providing solutions for on-demand and pool liquidity lending.

Other Projects: Particle, Blume, Curvance, Abracadabra Money, Fortunafi / Reservoir, INFINIT, Seismic Finance, and more.

SocialFi

1. Fantasy: A sports gaming platform combined with SocialFi, allowing players to collect character cards on social media and seek profits through various designed methods.

Other Projects: Gm.app, Sax Trade, DistrictOne (D1), Quail Finance, EarlyFans, Sofamon, The Bakery.

NFTs/Gaming

1. BAC Games, BLASTR, Blaze, Cambria, Captain & Company, Munchables, Wasabi, Spacebar, Plutocats, Nftperp.

Other Projects: AI Waifu, SEKAI GLORY, Pixel Race Club, Super Sushi Samurai.

GambleFi

1. BetBIG, Decentral Games, IKB, Insrt, YOLO Games, TideFlow.

Other Projects: Blast the balloon, Draw The Chart, FlashBit, MTRIX3D.

Infrastructure

1. Baseline Protocol: Infrastructure for ERC-20 token economic activities.

2. Tornado Blast: A trading bot platform focusing on providing strategies for users.

3. Blast Safe: Asset management and multisignature wallet platform on Blast.

4. Brahma: Provides a fast and secure execution environment for DeFi applications on Blast.

5. Gelato: Web3's Cloud platform providing Rollup-as-a-Service solutions.

6. RedStone Oracles: Oracle solution

Conclusion

Blast is a fairly unique ecosystem with a model closely tied to the keyword "yield," not only that, but the community also adds the label "Layer 2 ponzinomics" due to the airdrop mechanism in the early days. With its impressive TVL and community attention, Blast promises to be an explosively potential ecosystem in the near future.

Above are all the details about Blast Layer 2 and its prominent projects, hopefully aiding you in your research.