Blast Protocol Faces Criticism From Investor Paradigm

After a high-profile start, in which—as of this writing—over $550 million worth of tokens are locked in the protocol, the messaging and execution of Blast’s rollout came under criticism by Paradigm’s Dan Robinson on Sunday (Nov. 27).

The researcher at Paradigm, which is one of the three major backers of Blast, addressed concerns around the protocol’s launch one week ago at the conclusion of the Blur marketplace’s second points-farming season.

“For example, we don’t agree with the decision to launch the bridge before the L2 or not to allow withdrawals for three months since we think it sets a bad precedent for other projects. We also think much of the marketing cheapens the work of a serious team,” said Robinson

Robinson’s post follows a Saturday X thread by Blast and Blur creator Tieshun Roquerre, who addressed widespread concerns that Blast was a Ponzi scheme.

“The yield that Blast provides users can feel too good to be true, so this meme is understandable. But to put it simply, the yield Blast provides comes (initially) from Lido and MakerDAO…These yields are not unsustainable. They are a core component of the on-chain and off-chain economy. The reason the yield feels too good to be true in Blast is because Blast makes this yield the default for everyone. It gives users yield that was hiding in plain sight. In effect, democratizing higher yield,” he posted.

Sergito, senior director at Fireblocks, was more optimistic, conscious that critics will have the opportunity to build products for Blast once it rolls out as a fully-functional L2. “

Composability is one of the exciting things about DeFi, and Pacman managed to leverage the allure of native ETH yield to help $BLUR survive the end of S2 while also pseudo-vampire attacking other L2s. Stop crying and start looking for things to deploy on Blast come May to take advantage of whatever TVL will be there by then,” he posted.

While it can be confusing to see Paradigm—which led a $20 million raise for Blast alongside Standard Crypto, among others—criticizing its own portfolio company, this is par for the course, according to Robinson.

“We backed Pacman and his cofounder because they demonstrated an ability to build great products over many years, starting with Namebase, one of Paradigm’s first investments,” he explained in yesterday’s post.

Though Blast TVL is falling a bit today, many are extremely bullish on the project, with one account having sent 10,000 ETH into Blast last week and adding another 4,500 ETH yesterday. “This is either an insanely stupid move or a genius move. There is no in-between,” said one market watcher.

On Saturday (Nov. 25), Blast also addressed security concerns stemming from tokens sent to Blast currently going into a multi-sig wallet, not a smart contract. “Having an immutable smart contract may seem like a “more secure” option. But, especially in complex contracts, it can be less secure than an upgradeable contract…You can get infinite audits for an immutable smart contract, but you can never be 100% confident a smart contract is bug-free. If there are bugs in an immutable contract, you are dead in the water,” they posted on X.

They continued, noting that many L2s use multisigs as part of their security strategy. “Multisigs are used by L2s like Arbitrum, Optimism, and Polygon because they are highly effective if done right. So, how do you use a multi-sig properly? You want to make sure that each signing key of a multi-sig is independently secure. This helps make the multisig antifragile. Each key should be in cold storage, managed by an independent party, and geographically separated. For Blast, each signer has exactly those properties. They are deeply technical engineers who have experience with high-stakes applications ranging from financial applications to smart contracts,” they added.