In a whirlwind week, the crypto market witnessed the meteoric rise of Blast, a layer-2 solution on Ethereum promising high returns for ETH and stablecoin depositors. Within just four days of its launch, Blast garnered over $440 million in deposits from nearly 53,000 users, seizing the attention of investors and enthusiasts alike. However, this swift ascent was accompanied by a storm of controversy.
Critics swiftly raised concerns after scrutinizing Blast’s operational model, alleging it to resemble a Ponzi scheme. The absence of a testnet or mainnet, replaced by a multisig wallet holding investors’ funds without disclosing the identities of the five wallet managers, raised red flags. Furthermore, investor funds deposited into Blast would remain locked until the projected mainnet launch in February 2024.
Adding fuel to the fire, the tiered referral reward program employed by Blast drew ridicule, leading many to mock the project for seemingly failing to conceal its Ponzi nature.
Amidst this whirlwind of conflicting reactions within the community, both Blast’s official Twitter account and its founder, Pacman, took to social media on November 25 to address the concerns. Pacman clarified misconceptions, stating that the yield generated by Blast originates from established sources within the crypto ecosystem.
He highlighted that Blast’s yield comes initially from Lido and MakerDAO. Lido generates yield from Ethereum staking, an integral part of Ethereum’s Proof-of-Stake consensus mechanism. Meanwhile, MakerDAO’s yield stems from on-chain T-Bills, essential elements of the US economy. Pacman asserted that these yields are sustainable and are not unsustainable high returns, but rather previously untapped yields made accessible to all users by Blast.
Additionally, Pacman dispelled rumors linking Paradigm, a renowned research entity, to Blast’s launch, emphasizing that Paradigm had no involvement in Blast’s go-to-market strategy. He praised Paradigm’s expertise in technical L2 design but clarified that they were not consulted for Blast’s marketing strategy.
Regarding Blast’s invite reward system, Pacman elucidated its purpose, expressing that the community’s contribution is integral to Blast’s success. The invite rewards aim to encourage users to play an active role in growing Blast’s ecosystem, acknowledging their value addition to the platform.
The statements aimed to alleviate concerns about Blast’s legitimacy and operational transparency, emphasizing its reliance on established yield-generating mechanisms within the crypto space. Despite the reassurances, skepticism lingers among some investors and observers regarding Blast’s approach and its sustainability in delivering promised yields until its full launch in 2024.
Source: https://azcoinnews.com/pacman-blasts-founder-rejects-ponzi-allegations-against-the-project.html
