thecoinrepublic.com
- 1 Tieshun Roquerre opposes the criticism that surfaced about Blast comparing it to a Ponzi scheme.
- 2 The Blast Founder said that inviting rewards is not a marketing strategy but instead, a strategic move to encourage community growth.
Tieshun Roquerre responded to the rising criticism about the Layer-2 protocol on Ethereum. The criticism claims to compare Blast to a Ponzi scheme. The protocol went live on Tuesday in invite-only early access mode following a $20 Million raise from Paradigm, Standard Crypto, and other ventures.
The protocol offers more inclusive and profitable staking for ETH and stablecoins. It automatically compounds the balances to 4 to 5%. Besides this, it also facilitates the invite rewards known as Blast points. These offers have attracted a lot of bridged assets. As per Dune analytics, 400 Million bridged assets have been attracted so far.
High Yields Cited as the Reason For Arsing Criticism
Blast automatically stacked the injected crypto in Lido and then it redistributes staking rewards between investors. The user who bridges the stablecoins automatically gets USDB, Blast auto rebasing stablecoin to enjoy the additional interest.
Roquerre says that these high yields are sourced from the trustable protocols Lido and Maker DAO. The yield for USDB comes from the Maker DAO protocol. However, he accepts that the high yield provided may let users feel “too good to be true.”
He added, “The yields are sustainable and they are a core component of the on-chain and off-chain economy.” Blast founder also clarifies the reason why this appears to be too good to be true. The platform has made the yield default for everyone.
Furthermore, he also addressed investors’ rewards. He stated that it is not a marketing scheme to attract more stake, rather it is a planned strategy for community growth keeping in mind the contribution that users made in enhancing the ecosystem.
Blast founder also responded to the memes about Paradigm being the real entity behind the project’s launch, stating the crypto firm has zero involvement with the marketing strategy of the protocol.
He added, “Candidly they would have asked me to change a lot about the Blast launch if they had been involved.” He confirms that they consulted on research but not the market strategy. However, he also clarified Paradigm had asked him to make changes to the plans after launch but the final decision is in the hands of the team.
Roquerre also clears the criticism about the security of the protocol being managed by just five people. He stated like all other Layer-2 protocols to enhance the security of the platform Blast is also using multisig security.
He said immutable smart contracts seem secure, besides many audits, they can still bear undetectable bugs. Upgraded smart contracts are also vulnerable. He added that with token-gated upgrades and timelocks, they can be exploited by malicious actors.
Blasts use multisig security with signing keys kept in cold storage managed by geographically distributed independent entities. He also highlighted that the project has diversified the hardware wallets to enhance the security of the project. This will minimize the risk as no single wallet is used more than three to five times.
Summary
The criticism raised on Blast for being a Ponzi scheme and poor security is answered by the owner. He stated that the rising concerns were due to the reason that higher yields are provided. However, they are being provided by trustable protocols Lido and Market DAO. The security is multisig and hardware wallets can not be not used more than three to five times.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.