Why is it said that Blast is a feast for the wealthy and doomsday for the little guys?

Why is Blast Considered a Lavish Affair for the Affluent and a Disaster for the Underprivileged?

Author: Fengwuxiang, Source: Author’s Twitter @0xFengwuxiang

Why do they say Blast is a feast for the whales and doomsday for the small fish?

Everyone is milking Blast, but here I’ll only focus on the small fish and talk about Blast. The essence of Blast’s TVL mining is similar to projects like EigenLayer in the LSD space. Your TVL contribution is directly proportional to your score. And then there’s the ability to recruit people and the number of lucky cards drawn based on team luck.

From the perspective of TVL and airdrop quantity, I don’t think Blast is just a simple airdrop party, but rather a form of Defi Farming. It’s not friendly for the small fish.

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First of all, in terms of TVL, Blast already has a TVL of 250 million, and it’s estimated that it can reach 1 billion. Assuming Blast’s final airdrop value is close to that of ARB, let’s say 10 billion in total airdrop value.

ARB’s TVL exceeded 2 billion at the time, and the final airdrop value was approximately 1.3 billion.

OK, first let’s assume Blast is going to give a large share to Blur this time, let’s say 30%. Then the remaining 70% will be divided equally between the developers and users providing TVL. Of course, it’s also possible that the developers will take 50% directly. It’s not clear here. However, regardless of how it’s calculated, the total share of airdrop received by depositing users is approximately 30%, which is around 300 million units.

Here, I’m still calculating Blast’s share as a top-level L2 comparable to ARB. Remember, ARB has a strong ecosystem and a large user base. Blast currently only has one bridge, and it will take three months from the mainnet launch to the token launch. The ecosystem development is unknown.

This means that for Blast, you may only receive 30%+ of the airdrop return from your final 1 billion TVL. If the token is launched in May, and you deposit for half a year, from a Defi perspective, achieving an annualized return of 70%+ is indeed possible.

But in terms of airdrop rewards, I can only say it’s very low in terms of cost-effectiveness.

In the traditional public chain reward model, the earnings of top-tier whales are restricted. For example, if you provide a TVL of 1 million and 10,000 transactions, you would earn a maximum profit of around 20,000 units, whereas in Blast, you could earn over 600,000 units.

For a retail user providing a TVL of 100 units and 30 transactions, they could also earn thousands of units.

Despite having a TVL difference of 10,000 times, the earnings difference is only 20X. So, fair!

Therefore, in terms of the distribution logic of traditional public chains, it favors small fish and restricts whales, making it easier for small fish to become super-rich.

But Blast is different, allowing a large number of airdrops to go to whales (without any cap). After studying the rules, it’s difficult for small fish to have a chance to achieve excess profits. Whales have many KOLs with influence who can form stronger teams and recruit more people, thus occupying more points. Because influence is also subject to the Matthew effect.

All I can say is that this is a game of the Matthew effect, where the rich get richer and the poor cannot cross social classes.

As for why I’m not participating? I don’t like having liquidity locked up for too long, and I’m not sure if the market will experience a sudden crash in APY.

The most important thing is, I am a gambling dog and I love Alpha returns.

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