How Does Blast Work?

Auto-rebasing ETH that automatically accrues ~4% beacon chain staking yield for all EOAs

ETH balances automatically increase via rebasing on yield distribution events. Unique among L2s. Fundamentally changes EVM balance semantics and breaks assumptions in many standard contracts.

USDB auto-rebasing stablecoin backed by MakerDAO T-Bill yield

Stablecoins on Blast automatically accrue yield from RWA protocols (MakerDAO DSR). Changes stablecoin semantics from static to dynamic balance model.

Optimistic rollup without functional fraud proof system

Standard optimistic rollup architecture but proof system is not fully functional. State validation relies entirely on centralized proposer honesty. Significant trust assumption.

3-of-5 multisig with anonymous signers controlling protocol upgrades and deposits

All deposited assets controlled by 3/5 multisig. No public information on signer identities. 4 of 5 signer wallets funded from the same source address, suggesting possible single-entity control.

ETH yield sourced from Lido staking deployed by the bridge contract

Bridge contract deposits user ETH into Lido for staking yield, then distributes yield back via rebasing. Adds Lido dependency and smart contract risk to L2 bridge.

Points-based incentive system for TVL attraction and user acquisition

Points system incentivized early deposits. Created mercenary capital dynamics with TVL flowing in for airdrop and potentially flowing out post-distribution.

BLAST token for governance and gas rebates to dApp developers

Novel gas revenue sharing where dApps earn gas fees from their users' transactions. Changes developer incentive model but creates dependency on BLAST token value.

Anonymous multisig controlling all bridged assets with 4/5 signers funded from same wallet means 3 compromised keys (potentially held by one entity) could drain all user deposits.

Without working fraud proofs, a malicious proposer can finalize invalid state transitions. Users have no on-chain recourse to challenge incorrect state, risking total loss of bridged funds.

Rebasing ETH breaks standard EVM assumptions where balances are static between transactions. Contracts not designed for rebasing can lose yield or miscalculate user balances.

Dependency on Lido for yield generation means a Lido exploit or slashing event would reduce or eliminate the native yield proposition, undermining Blast's core value proposition.

Protocols integrating USDB must handle rebasing logic correctly. Accounting errors in vaults, lending, or DEXs using USDB could create extractable discrepancies.