Research Report: Estimating Blast Expected Valuation and Airdrop from the Perspective of Blur

Author: Shang尙, Host of Wu's Podcast, former BitMEX analyst

This article reflects the author's personal views and does not represent the opinions or positions of Wu's Podcast.

This article attempts to think about the unique aspects of BLAST's operational strategy and the analysis and airdrop prediction of $BLUR from the perspective of secondary participants, and whether it is worth actively participating.

To conclude, Blast is a top-tier ecosystem that is definitely worth paying attention to and participating in:

• Strong disruptive gene: From BLUR's points system to BLAST's cross-chain locking and developer airdrop, the fact that many peers have copied its strategies is the greatest proof of its success.
• Big cake: It has a strong KOL network and over $1 billion in capital.
• Strong capability: The BLAST team has a successful track record. They are highly effective, have a great grasp of market demands, and enjoy top-tier VC support.

At the same time, BLUR is a cost-effective tool that can achieve two goals with one stone:

• BLUR is the absolute leader of NFT platforms on Ethereum.
• OpenSea had a primary market valuation of $13.3 billion during the 2022 bull market, while BLUR's FDV is only around $2 billion now.
• The implicit airdrop value of BLUR accounts for over 30% (sensitive to staking time).
• BLUR currently has no selling pressure from miners in the short term.

The Troublemaker That Murkies the Waters

In the last cycle, due to the high status of VCs and the limited number of public chains, everyone tacitly understood the logic of harvesting retail investors. In the game between retail investors, project parties, and ecosystems, retail investors suffered greatly. User incentives often only existed in DeFi mining supported by ecosystems, and it was common to see people go all in just because of the arrival of blue-chip projects and the release of "ecosystem funds." Now? There are already over 140 EVM chains supported by Rabby, not including Cosmos, BTCL2, and the newer narratives of restaked rollups that are easier to issue tokens. Here, I sincerely wish investors and infrastructure project parties good luck.

For Reference, there are a total of 196 countries in the world.

Thus, this cycle has led to an oversupply on the supply side, which means a significant increase in "customer acquisition" costs, and the summer for retail investors has arrived. At this market juncture, retail users who have survived FTX and LUNA are very clear about why they came to the crypto world --- not to overthrow Wall Street, nor to promote decentralized construction; they are here to make money. It is evident that in highly homogeneous infrastructure, compared to scalability and low gas fees, the ability to better design incentives and operate ecosystems to create wealth effects and sustainability to enlarge the cake is more important.

In new public chains, Berachain may do the best in sustainability and game theory, but BLAST has many commendable aspects in its approach:

1. BLAST's investment lineup is impressive, with Paradigm providing support and endorsement in technological innovation and security, along with a strong KOL lineup including egirl Capital and loomdart.

2. The cross-chain locking has "lured" a large amount of TVL that cannot be mined or sold. This means that users mining BLAST will be "forced" to continue seeking new project interactions after BLAST goes live.

3. The team has consistently made innovative attempts in distributing tokens, creating significant impacts in the industry. BLUR created the points system that is now essential for project parties. Blast reignited market play and enthusiasm with its cross-chain locking airdrop. In addition to the usual cross-chain locking that generates TVL and sustained interaction from day one, and developer airdrops, Blast's unique token distribution will only be released three months after the mainnet launch, rather than the traditional method of launching tokens first. This could very well be a smart move.

4. Focus on building an application ecosystem. I greatly appreciate Blast's focus and vision, discovering and incubating early-stage projects that have not yet issued tokens through transparent developer airdrops and hackathons. Coupled with over $1 billion in liquidity, a strong KOL network, and support from VC institutions, projects launched on Blast are likely to produce one or two breakout points similar to Friend Tech.

Expected Valuation and Airdrop Calculation for BLAST

Based on existing public information, we know there are four ways to obtain the Blast airdrop: developing projects on Blast for rewards, scoring on BLUR, staking BLUR, and locking assets on the Blast cross-chain bridge.

Referring to BLUR's TGE, the initial circulation of Blast is likely to be 12% as well; among them, the scoring rewards on BLUR will be consistent with the staking rewards of BLUR, and developer airdrops will receive half of the rewards, followed by cross-chain staking. Below are what I believe to be the likely airdrop proportions and distributions:

I conservatively estimate BLAST's valuation to be around $5 billion. If we refer to the current mainstream and BLUR's TGE ratios, BLAST's initial circulation will be around 15%, with an implicit market cap of around $600 million, placing Blast's market cap ranking between 50th and 100th in the entire market. A reckless blind guess would suggest that Blast's valuation is most similar to RON, which is also an application-to-public-chain ecosystem with some background similarities, while the upper limit might be half of Arb's, as Blast lacks the technology and L3 premium.

Currently, the pre-market trading platform Aevo values Blast at $3 billion, with price fluctuations mainly between $3 billion and $10 billion.

The current price support for Blast is based on the following:

● Blast's TVL is already ranked 6th across the network and 2nd among L2s.

● Blast has acquired 120,000 users and may become the L2 with the highest daily active users.

● The probability of operational innovation and application explosion on Blast is high.

TVL

Blast's TVL currently stands at $1.3 billion, second only to Solana, and 50% more than Polygon and Avalanche. This ranks 6th among current smart contract platforms; although defining market cap based on TVL may not be very meaningful, this level of TVL will provide some support for the market cap.

Currently, Blast's locked amount ranks sixth in terms of user count.

Blast's user count also ranks at the top of the market, conservatively estimating that the daily active user count after Blast goes live will exceed 120,000. This is because there are already 120,000 wallets involved in cross-chain locking, and the two months following Blast's launch will continue to lock assets, thus actively interacting to gain additional rewards. Each wallet needs Twitter verification, and there are no special rewards for multiple wallets scoring, so we can estimate the wallet count as a relatively safe estimate of daily active users after Blast goes live.

If the above assumptions hold, considering the current market environment, Blast's daily active users will be more than Optimism, more than Avalanche, and slightly less than Arbitrum. This further proves that Blast's valuation will not be too low.

Blast's daily active users are conservatively estimated to be between Celo and Uniswap.

Will Projects on BLAST Generate User Stickiness?

Alongside the cross-chain points of Blast, the launch of the testnet and related ecosystem projects, as well as the expectations for airdrop incentives, are also heating up. Here are some interesting and trending new projects and breakout points currently observed:

● NFT Projects Launching Tokens on Blast

Since a large portion of the beneficiaries of Blast are veteran players from the NFT community, the support and relevance of NFTs on Blast should be very high. I remain optimistic about the interaction between NFT projects/communities and Blast.

ByWassies is an OG NFT project on Ethereum, with a floor price of 0.9 ETH, and is well-known among the degen community on Ethereum, focusing on crypto-native culture. It has been confirmed that it will launch tokens on Blast and will airdrop to Blast/Friendtech users.

● The Best Place for Gamblefi

The gamified tone emphasized by Blast, the large KOL matrix, and the design of native yield make Blast the best breeding ground for Gamblefi-type projects.

Among them, Fantasy.top is a project that has already received widespread discussion and praise during its testnet phase. It cleverly combines Sorare and Friend.tech, allowing players to buy KOL cards to leverage KOL influence for profit, similar to fantasy sports gameplay. This project addresses many pain points for players and adds an innovative way to speculate.

Additionally, Blur's native yield can support risk-free gambling/new launches. In the last cycle, Luna also attempted to use UST's 20% yield for a launchpad, which had decent results.

● High Volatility Opportunities

Due to Blast's participation and KOL lineup, along with sufficient TVL, there will definitely be many high-heat new launch opportunities on Blast, such as Thurster, which emphasizes fair launches and has announced several cooperative token projects with a strong backing lineup, including Loomdart, CBB, DCFgod, Not3Lau, etc.

Risks of Blast (Cannot Be Ignored):

● The risk of Blast's cross-chain bridge is multi-signature wallets.

● The risk of rug pulls on Blast may be higher, as projects receiving airdrops may be more short-sighted and could run away after the airdrop.

● If Blast cannot expand its cake through innovative applications, the token price will inevitably decline like BLUR due to excessive selling pressure and lack of new players entering the market.

Implicit Airdrop Value in BLUR

It is difficult to accurately calculate BLUR's staking rewards, as the rewards for airdrop staking depend largely on the staking duration; the longer the time, the higher the multiplier for points. The staking duration of other stakers also needs to be considered. Therefore, the following is a simple estimate without considering multipliers, merely to determine the price support for BLUR under the expected airdrop for BLAST.

0.3 will be a strong support for BLUR's price, as the hidden value in Blast can basically cover the cost of Blur. At the same time, we see that the current price of 0.6 is also relatively reasonable; if NFT activity continues to decline, 0.6-0.7 will also be a significant resistance for BLUR.