Blast, a layer 2 scaling network for Ethereum, is struggling to recover amid a mass exodus following its June airdrop. At the beginning of August, the network lost over $300 million in liquidity, with its total value locked (TVL) declining from $1.1 billion to $785 million by August 5, its lowest level in six months.
The network has recovered over $100 million in TVL within two weeks, but it still struggles to attract liquidity. The TVL figure is down over 60% since its record high of $2.3 billion set at the beginning of June. In April, we reported that the network’s TVL had surged to over $1.7 billion shortly after its launch.
Data from growthepie shows that the number of daily users on Blast dropped to 27,800 on August 18, which was the lowest level since the end of February, when the scaling solution launched.
In mid-June, over 180,000 wallets per day were using Blast-based decentralized applications (dapps).
Blast’s user activity pales compared to Base or Arbitrum, whose daily active wallets surpassed 740,000 and 360,000, respectively.
The dramatic decline of Blast’s key metrics demonstrates that decentralized finance (DeFi) projects and public decentralized networks should pay more attention to securing organic growth and focus on their communities and use cases. It turns out that the rapid growth of the ecosystem was driven by the highly anticipated airdrop. However, once the giveaway started in June, reactions were mixed, with many users being disappointed with the token-claiming process and its allocation.
Not only airdrop participants were not happy with the network’s approach, some projects building on Blast were also frustrated. For example, Pacmoon, once the largest meme coin on the layer 2, is migrating to Solana. Pacmoon’s Lamboland said on X:
“We think that tokens, community, and culture are what make a blockchain successful. However, Blast never focused on that. In fact, they created a system where native tokens on Blast are actively disincentivized and they provided zero social support.”
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