Ether (ETH) worth approximately $400 million has been withdrawn from the Ethereum layer-2 network Blast since its mainnet launch on February 29th at 9:00 pm UTC, unlocking around $2.3 billion in staked crypto that was previously locked up on the network.
Blast, a blockchain scaler utilizing optimistic rollup technology, offers users an annual percentage yield of up to 5% on Ether and stablecoins held on the network. This yield is generated from staked ETH and United States Treasury Bills (T-Bills) managed by MakerDAO, the creator of the Dai (DAI) stablecoin.
Since the crypto sent to the network was locked in before the mainnet launch, users were unable to withdraw their funds until now. According to DeFiLlama data, Blast’s total value locked (TVL) reached a peak of $2.27 billion on February 29th but has since decreased by 17.5% to $1.87 billion, with nearly $400 million being withdrawn.
Prior to the mainnet launch, the network had already surpassed the milestone of $2 billion TVL for the first time on February 27th. This has attracted many airdrop hunters who hope to receive a Blast token, which the team has announced will be distributed in May.
However, Blast’s launch has not been without controversy. Dan Robinson, the research head at Paradigm, a seed investor in Blast, expressed disagreement with the decision to launch the bridge before the L2 and to restrict withdrawals for three months. Robinson believes that this sets a bad precedent for other projects and cheapens the work of a serious team.
Furthermore, the network experienced its first alleged exit scam on February 26th when a gambling protocol called “Risk on Blast” disappeared with 420 ETH (approximately $1.25 million) of user funds collected for its RISK presale token.
As Blast continues to make waves in the crypto industry, questions arise about the sustainability and security of Ethereum restaking and whether it is a genuine innovation or a risky endeavor akin to a house of cards.