Blast Mainnet is About to Launch: Technical Analysis and Potential Opportunities

Recently, Blast has become a market hotspot. After the conclusion of its "Big Bang" developer competition, its TVL quickly surpassed $2 billion, occupying an important position in the Layer 2 sector. Blast announced that it will launch its Mainnet on February 29, attracting widespread attention, with "airdrop expectations" being a major factor in attracting participants. However, with the development of the ecosystem, various projects are emerging one after another, which also brings potential security risks.

Blast Development History

Blast was launched on November 21, 2023, quickly gaining the attention of the crypto community. Within the first 48 hours, the network's TVL reached $570 million, attracting over 50,000 users. Blast previously secured $20 million in funding from institutions such as Paradigm and Standard Crypto, and later received a $5 million investment from the Japanese crypto investment firm CGV.

As of February 25, data shows that the total asset value of the Blast contract address exceeds $2 billion, of which $1.8 billion in ETH is deposited in the Lido protocol and over $160 million in DAI is deposited in the MakerDAO protocol, highlighting its market popularity.

Reasons for the Popularity of Blast

What sets Blast apart is its provision of native yield for ETH and stablecoins, which is not available in other Layer2 solutions. When users transfer ETH to Blast, the funds are deposited in Lido for yield generation, while new yield-generating stablecoin USDB is introduced (gaining returns by purchasing US Treasury bonds through MakerDAO).

As a Layer 2 launched by the Blur team, Blast comes with a traffic advantage. Blur previously distributed over $200 million in airdrops, accumulating a broad community base. Blast attracts users to participate in staking through airdrop incentives and traffic viral marketing.

Blast Security Risk Analysis

Blast has faced criticism and skepticism since its launch. On November 23, 2023, Polygon Labs engineer Jarrod Watts pointed out that the centralization of Blast could pose serious security risks and questioned its positioning as an L2 network.

Through the analysis of the Blast Deposit contract code, the following main risk points were identified:

1. Centralization Risk

The key function of the Blast Deposit contract, enableTransition, can only be called by the admin address. This function sets the mainnetBridge contract address, which can access all staked ETH and DAI.

In addition, contracts can be upgraded at any time through the upgradeTo function, which is mainly used to fix vulnerabilities, but also carries potential risks. In contrast, Polygon zkEVM has a more complete approach to contract upgrades, typically requiring a 10-day delay and a decision from the protocol council.

2. Multi-signature Dispute

The Blast Deposit contract permissions are controlled by a 3/5 multi-signature wallet of a Gnosis Safe, with all 5 signature addresses being newly created addresses from 3 months ago, and their identities are unknown. Since the contract is actually a custodial contract protected by multi-signature, not a Rollup bridge, it has raised concerns within the community.

Blast acknowledged these security risks and stated that it will use multiple hardware wallets to mitigate the risks. However, whether wallet management can effectively avoid centralization and attacks, and whether there is a sound management process, has not yet been disclosed.

On February 19, the Blast team updated the Deposit contract, mainly adding the Predeploys contract and the IERC20Permit interface to prepare for the Mainnet launch.

Blast Ecosystem Security Incident

On February 25, the Blast ecosystem GambleFi project Risk allegedly experienced a Rug Pull, resulting in a loss of approximately 500 ETH. Its official social media accounts no longer exist.

Investors like MoonCat2878 shared their personal loss experiences. They initially considered RiskOnBlast a promising investment opportunity, but subsequent unlimited public financing raised suspicions.

Monitoring shows that most of the stolen funds have been transferred to different exchanges, while a small portion has been cross-chained to Arbitrum and Cosmos.