Paradigm, one of Blast’s seed investors, criticized the protocol’s decision to launch a bridge before its L-2 and withdraw capability.
Crypto venture capital firm Paradigm criticized Blast’s protocol marketing strategy, claiming the startup “crossed lines in both messaging and execution.” The VC firm is a seed investor in Blast.
The head of research at Paradigm, Dan Robinson, shared a statement on X (formerly Twitter) expressing disagreement about Blast’s decision to launch a bridge before its layer-2 network and to not allow withdrawals for three months. “We think it sets a bad precedent for other projects,” Robinson wrote, adding that “much of the marketing cheapens the work of a serious team.”
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…
— Dan Robinson (@danrobinson) November 26, 2023
Paradigm has been in touch with Blast about its concerns, Robinson noted, emphasizing that “there are still many points of disagreement” between the companies.
Despite the criticism, the head of research also acknowledged that Blast’s team is formed by “world-class builders,” with demonstrated “ability to build great products.” Blast’s governance structure is unclear, as is Paradigm’s role in the startup’s decision-making process. According to Robinson:
“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.”
Paradigm isn’t the first company to address Blast’s recent launch. Jarrod Watts, developer relations engineer at Polygon Labs, said the network’s centralization poses a significant security risk.
In addition, Watts noted that Blast “is just a 3/5 multisig”, meaning that if an attacker gains access to three out of five team members’ keys, they can steal all cryptocurrency deposited into Blast’s contracts.
Watts also claimed that Blast “is not a layer 2,” but simply “accepts funds from users” and “stakes users’ funds into protocols like LIDO” without using any bridges or testnet. Additionally, he criticized the lack of withdrawal functionality. To withdraw in the future, users must trust that developers will add withdrawal functionality in the future.
In spite of the controversy surrounding its launch, Blast has amassed over $555 million in total value locked (TVL) since its launch a few days ago. The protocol claims to be “the only Ethereum L2 with native yield for ETH and stablecoins.” An airdrop is scheduled for January.