Crypto venture capital firm Paradigm has voiced considerable criticism about Blast’s protocol marketing strategy, stating that it crossed the line in terms of messaging and execution.
The seed investor criticized the protocol’s decision to launch a bridge before enabling withdrawals, effectively locking user funds for months.
Paradigm Not Happy With Blast
Paradigm has come down heavily on Blast’s protocol marketing strategy after stating that it had noted the wave of criticism that has come the network’s way. Dan Robinson, the head of research at Paradigm, has publicly disagreed with Blast’s decision to launch a bridge before launching its Layer-2 network and not allowing withdrawals for three months. According to Paradigm, the startup crossed the line in both messaging and execution. The criticism from Paradigm is notable since the firm is one of Blast’s seed investors.
“There are a lot of components of Blast that I’m excited about and would be interested in engaging with people on. That said, we at Paradigm think the announcement this week crossed lines in both messaging and execution. 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.”
Robinson also stated that Paradigm has been in touch with Blast about its concerns but also noted that there are several disagreements between Paradigm and Blast. However, despite the public criticism, Robinson acknowledged that Blast’s team consists of “world-class builders” who have the ability to build great products. However, Blast’s governance structure and Paradigm’s role in Blast’s decision-making process are unclear.
“We invest in strong, independent founders who we don’t always agree with. But we understand that people may look to us to set an example on best practices in crypto. We don’t endorse these kinds of tactics and take our responsibility in the ecosystem seriously.”
Polygon Critical Of Blast As Well
Paradigm isn’t the only company that has been critical of Blast and its recent launch. Jarrod Watts, developer relations engineer at Polygon, has stated that Blast’s centralization poses a significant security risk. Watts also noted that Blast is only a 3/5 multisig. This means if a threat actor gains access to three out of the five keys, they can easily steal all the crypto deposited in the network’s contracts.
Watts also claimed that Blast is not a Layer-2 but just accepts funds from users and stakes the funds into protocols such as Lido without using any testnet or bridge. He also criticized the fact that users cannot withdraw funds. For any withdrawals to be enabled by Blast in the future, users must trust that the developers will add the withdrawal functionality.
Blast TVL Still Increasing
Despite the mounting criticism and controversy generated by Blast since its launch, the protocol has amassed a staggering $555 million in total value locked (TVL) in a matter of days. The protocol has claimed it is the only Ethereum Layer-2 with native yield for ETH and stablecoins. However, the protocol has ignited a debate about whether the decentralized finance (DeFi) ecosystem needs any more Layer-2 networks. According to data from DeFiLlama, there are currently 232 blockchains, with many offering similar functionalities and sharing the same users. Furthermore, Coinbase and Kraken have also launched their own Layer-2 networks.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
