Letter 49: Blur, Blast, Bingo
Incredible Opportunities & Incredible Ponzinomics
If you’re just waking up and seeing everyone and their mother shilling you blast.io referral codes and wondering WTF Blast is, this is the newsletter for you.
Many people will be aware that Blur season 2 ended yesterday, and there was a lot of speculation around what would happen to the NFT market when it did and what, if anything, was planned for s3 and beyond.
Well, let’s just say that I don’t think anyone saw this coming (save for the insiders).
Let’s dive into everything that happened and how you can take advantage of what might be one of the most lucrative opportunities over the next 6 months. Actually before we dive in, some macro/meta thoughts:
This is all pretty convoluted, confusing, chaotic, complex, and crazy.
It may be tempting to dismiss this out of hand. It may be tempting to ignore it. It may be tempting to not want to engage. There are many reasons for those to be valid, but if making money is something that interests you, I implore you to consider paying attention to what’s going on here.
The more friction involved with doing something, the greater the opportunities tend to be. This is a truism throughout all of crypto (and the world). There’s friction involved in understanding and engaging with the various point farming mechanisms below, but I think there’s significant upside for those who choose to engage.
Disclaimer up front: I am an investor in Blur and therefore have a (literal) vested interest in the success of their token. I am not an investor in Blast and was not even aware of its existence until today. Consider this lens when reading my thoughts ahead.
Blur Season 2
Season 2 of Blur ran for about 9 months from February 14th until Nov 20th. It was extremely divisive in the space with some people loving it and others absolutely hating it, and thinking that it was everything that is wrong with NFTs. I’m not here to judge or cast stones, more to report facts.
The idea behind season 2 was that by performing certain actions on Blur, you would receive points, which would determine how many tokens you would get in their airdrop.
There were many factors that went into play: bidding activity, listing activity, buying activity (i think?), lending activity, and how “loyal” you were (if you only listed on blur you got a much higher allocation than if you also listed elsewhere).
Many people tried to farm this airdrop with a whole range of mixed results.
On one extreme end you have people like MachiBigBrother who received around $2,000,000 worth of BLUR in the airdrop, but lost around $14m in the process of farming. He is not happy.
To be fair, he made some pretty insane/poor decisions by buying large quantities of projects at inflated prices and then mass dumping them at much lower prices.
I doubt there’s much love lost for Machi.
On the other end of the spectrum, you have intelligent traders/farmers like Cirrus who managed to make money while farming and received a 6 figure airdrop (approx $150k).
And everything in between. The largest airdrop appears to be from Hanwe who received approx $7.2m worth of tokens:
In total, around 300,000,000 BLUR tokens were distributed in the airdrop which at current prices amounts to around $100-$120m. Hell of a stimmy.
Speaking of prices, the BLUR token understandably took a sharp nosedive immediately after the airdrop as people began to claim and sell their tokens. What is a little surprising though is that the trajectory then reversed and BLUR has been on an uptrend since then.
The reason for that is because of season 3, and Blast.
We can’t talk about season 3 without talking first about Blast, so let’s get to that.
WTF is Blast?
In their own words, Blast is:
The only Ethereum L2 with native yield for ETH and stablecoins.
and:
Blast is an EVM-compatible, optimistic rollup that raises the baseline yield for users and developers without changing the experience cryptonatives expect.
Uh, what? Okay let me try and break it down in more understandable terms.
I’ll presume you know what a Layer 2 (L2) is. If you don’t, read this:
Blast is a new L2 that is being built, and they are differentiating themselves by the other L2s by building it with what they’re calling native yield.
What this means is that if you have your ETH or stablecoins in your wallet on Blast, they will automatically be earning yield (4% for ETH and 5% for stables).
That’s… pretty awesome?
The situation at the moment is that anyone can stake ETH, or stake their stable coins, but doing so will require an action (and gas fee) to stake, and then another to unstake. It’s impractical to have all of your funds staked. Blast is claiming to be building in such a way that all funds on the chain automatically earn yield.
This extends beyond the funds in your wallet too — it includes funds that are deposited into any dapp/protocol. Pacman, the founder of Blur, and now Blast, said that part of his inspiration for building Blast was that he was looking at the $100m TVL locked in the Blur pool that is not earning yield:
Another huge part of the inspiration was seeing all the gas fees being wasted on ETH. Now of course that’s no new revelation, and gas fees being wasted on NFTs (and everything else) is a major reason why many of the existing great L2s exist in the first place.
Here are some great thoughts that get a bit more technical by Foobar (admittedly an investor in Blast, but also an excellent dev/builder in the space):
Okay so Blast is a new L2 that’s being built, with the idea being to move a lot of NFT trading there, give native yield to the funds on the chain, and to ideally develop many other dapps and use cases. Seems cool. How does this factor into Blur and Season 3?
Let the ponzi games begin!
While Blur s1 and s2 resulted in people being airdropped the $BLUR token, s3 is all about [REDACTED] (presumably… $BLAST?). There are a few ways of earning this presumed token, and we’ll look at those now.
Important note: all of the below are ways to farm for [REDACTED($BLAST)] or Blast “airdrop points” — there is no mention of any more $BLUR tokens being airdropped for the time being.
Blur Season 3
Unlikely Season 2, there’s an official end date for s3, which is nice to see. Season 3 will end in May 2024 after running for 6 months. The rewards are [REDACATED], but as mentioned above, seem quite likely to be some sort of $BLAST-related tokens.
50% will be distributed to people based on their Blur Points, and 50% will be distributed based on their Holder Points, which we’ll look at first because they’re more simple (believe it or not - TLDR after the images).
Holder Points
TLDR: “stake” your $BLUR and earn points. The longer you stake, the more you earn. The earlier you begin to stake, the more you earn.
There are high incentives to stake today, earning 4x points per $BLUR (per hour). This number scales down to 1x point per $BLUR from Nov 26th onwards.
You receive a multiplier to your points depending on how long you stake, increasing by 0.5x per month. If you stake now and hold to the end, you should get a 3x increase.
You can withdraw at any time and keep all your holder points, but your multiplier will drop.
This was a pretty clever tokenomics mechanic to dissuade people from instantly dumping their $BLUR airdrop. It’s worth noting that when you claim your airdrop, it’s automatically staked and earning points. This goes a long way to explaining why the $BLUR token has held up in price.
Blur Points
The other half of s3 rewards will go to people using the Blur protocol, similar to how s2 went, with a few notable changes.
The 3 ways to get points are Bidding, Listing, and Lending.
Bidding
Bidding seems largely the same as s2. You get points when you place bids on collections. The higher your bid, the more points you earn. The longer your bid is active, the more points you earn. The more volume the collection you bid on has in the last 24hr, the more points you earn.
TLDR: bid on popular collections and have your bid be the highest or close to it to start earning some bidding points.
Listing
Listing points are not visible until the end of the season, but the gist of it is that if you list organically, you’ll earn points. More active collections, more ‘blue chip’ collections, will earn you more points.
Lending
Lending points are earned by making loan offers. The higher the Max Borrow amount, the more points. The lower the APY, the more points.
Importantly, lending points are emitted at half the rate of bidding and listing points.
Loyalty
This is important. Loyalty is basically what it sounds like: how loyal you are to Blur. If you list NFTs on other platforms, your loyalty goes down. They included a sneaky jab at the Flooring Protocol as well by saying:
Providing liquidity in AMMs for NFTs or fractionalized NFTs will also affect your loyalty.
Based on anecdotal evidence, it seems that people who had a lot of points but bad loyalty got a far lower allocation in the airdrop than those who had a lower amount of points but much higher loyalty. If you want to farm for [REDACTED($BLAST)], i’d be very mindful of loyalty.
This is a great post by Sam / NFTStats highlighting the changes between s3 and s2:
Speaking of farming for [REDACTED($BLAST)], and boy do I not love having to type that double brackety long shebang of a token ticker, but it seems the most accurate — speaking of farming, there are other ways to farm for the token that we should talk about.
All of the above has been Blur Season 3 rewards, but you can also farm for the Blast protocol in a couple of other ways.
BLAST.IO
Enter the ponzi to end all ponzis, although hopefully/probably not really.
Blast.io is where you can learn about the upcoming L2, Blast, as well as get a start on earning points that’ll contribute to your allocation of [REDACTED($BLAST)]. Actually, they don’t say REDACTED on the Blast website. They said Airdrop Points.
So in theory, what you get for Blur s3 rewards is not necessarily going to be the same as what you get for bridging / earning points via Blast.io. My initial reaction was that they would be one and the same, but we have different language being used on the two sites so they might be different.
We know for sure that activity on the Blast.io site will lead to an airdrop - they literally say “airdrop points can be redeemed in May” on the site - we do not know what [REDACTED] is.
Again, I suspect it is still an allocation of $BLAST (or whatever the token will be), but can’t be sure about it. Might be a multi-token ecosystem and the Blur s2 rewards gets one of the tokens and the Blast airdrop points gets the other — we simply don’t know.
Anyway, back to the points. You need an invite code to sign up, and, here’s the kicker, every time someone signs up via an invite code, they will generate points for the person whose link they signed up via. By the way if you’re enjoying this totally and 100% free newsletter and want to support me and be part of the zen squad, here’s my invite code/link wink wink nudge nudge: https://blast.io/JG04F
Let’s put the whole Luck and Spins thing to the side for a moment, and appreciate this glorious meme by BoldLeonidas:
Okay so how do you earn points? A few ways.
By bridging ETH or Stable Coins, you will earn points. You will also earn yield (4% for ETH, 5% for Stables). Importantly, when you bridge, you cannot withdraw your funds until February when mainnet launches and withdrawals are enabled (and this is assuming they stick to their timeline). Do NOT bridge funds you might need to access any time soon.
By spinning the wheel! Because what’s crypto these days without some additional fucking gambling. You get 1 spin to begin with, and another 1 for tweeting something, and then you get 1 spin per week for every ETH (or USDC equivalent) you have bridged.
As mentioned above, if you refer people and they bridge or spin and earn points, you get a % of their points (and also a % of the points that the people they refer get.
Lastly, you can increase your Luck for your wheel spins. Every time your ‘squad’ bridges a certain amount (I believe in increments of 5-10 ETH), you get the opportunity to flip some cards to increase your luck! More gambling!
Everyone in the squad gets these flips, so it makes sense to join a squad with a lot of people that are bridging a lot of ETH! Hint hint, my code once again is: https://blast.io/JG04F.
Basically, you flip a card to increase the chance your next spin is a “super spin”, which would give you 2-10x the points of a normal spin. It’s worth mentioning that your luck doesn’t “run out”, it’s permanent for your account until you get a better/higher luck card.
They suuuuure know how to dopamine hack engagement farm our minds space with these prolonged, regular, gacha game mechanics.
Andy said it best:
To try to sum it all up though, this is how you earn airdrop points:
Bridging ETH + Stables
Spins (you get 1 spin per week for ETH bridged)
Sharing your invite codes & having those people earn points
As your squad bridges more ETH, you unlock squad rewards - so far these seem to be more invite codes, and the ability to flip the “luck” cards to increase your Spin outcomes.
Last thing on this — it’s worth noting that all of these points only account for half the Blast Community Airdrop allocation. The other half goes to developers building on Blast.
Definitely worth considering tinkering around on Blast if you’re a dev intrigued by the idea of native yields.
Alright, that’s basically all the points-earning-ponzi-stuff.
I’ll share some thoughts now on how I am thinking about all of this, both in terms of a personal strategy going into the Blast airdrop/launch, and what all of this might mean for the market in the short, medium, and long term.
Blur / Blast Farming?
I did virtually no farming of Blur points in season 2. I literally have already earned more bidding points in season 3 than I did in s2. Take that for what it’s worth.
It’s clear that a lot of people made a lot of money from the first Blur airdrop. It’s now also clear that a lot of people made a lot of money from the second Blur airdrop, even though a lot of people said that a lot of people would not be able to make a lot of money because a lot lot lot of people would be farming and the rewards would be diluted.
That was a lot, I know.
Cliffnotes is: it seems clear not to fade Blur (and now Blast).
There are strategies you can employ where you can deploy relatively low capital, and with relatively low risk, farm quite a lot of points. The MachiBigBrother’s of the world get all the attention for losing lots of money and dismantling project floors, but the reality is that farming points is a much more humble endeavor for the vast majority of people.
This is their discord/alpha group for anyone curious in joining.
You can spend a tonne of time, use sophisticated tools, and grind like mad and make life changing money (see above).
Or you can do it more low-key and simpe: find projects you like, and genuinely want to buy, and put in some bids. If one hits, great, you get the NFT at a discount to floor price! (and earned some points along the way) — If not, great, you are still earning some points.
You can scale this up tremendously and get into lending and listing and everything else, and I intend to explore all options over the next few months.
I am very bullish on Blast. Why? Because the idea makes a tremendous amount of sense, is being built and is backed by a proven and strong team, with a list of investors who now have heavily aligned incentives to make it succeed. And they’ve already managed to hit $60m TVL on the un-launched chain in less than 24 hours.
Yes of course there are risks here — smart contract risk, bridge exploit risks, multisig risks. This is not risk free. But it’s an incredibly strong asymmetrical bet, imo.
You also don’t have to like Blur, or Blast, to reap the rewards. I used to try and believe that most people in this space were here for other reasons. That harsh reality that I have had hammered into my burned out and depressed head over the last few months is that really, truly, when most people are being honest, they just want to make some fucking money. So why fight it.
There are a million other reasons to be in crypto and in NFTs and I love many of them, and I love the people that genuinely don’t care about money; the rare and noble minority that they are (not ironically, most of them have already made it).
I believe you can do good and do well at the same time. You can make money and be a positive force in the space, in the world. You can get wealthy and help others along the way. I don’t think there’s anything wrong with that.
I’m gonna be trying to figure out the best strategies for farming points, among many other things, over the next few months. It’s bull market time (either now, or soon; it’s coming), and this is a tremendous opportunity that should not be taken lightly.
GCR is the goat.
I’m getting a lot more active. I’m gonna be writing a lot more here. I’m gonna be sharing everything I can with my community in ZenAcademy. I’m gonna be trying to embrace my inner degen, the one that was a professional gambler for 15 years, the one that is a gamer at heart, that is competitive, strategic, loves solving problems, and wants to win. It’s not for everyone. Most people are better of DCAing into a few ‘safe’ assets and forgetting about it. But for the crazy and chaotic and insane few of us out there, this is the time to put our heads down and hustle.
What about the NFT market?
There was infinite speculation on what would happen to the NFT market around the airdrop. For a while I thought it would cause the market to pump, and there was still a decent chance of that happening — but my mind changed pretty quickly on this front when I saw what was happening with Blast & Blur s3.
I like to think in terms of probabilities, and imagine various scenarios.
One possible scenario that would have led to NFT floors going up is:
$BLUR stimmy → people sell for ETH → buy NFTs
Another, which would not, is:
$BLUR stimmy → people sell and put into other coins / keep in stables
We now however have at least two other viable paths for people to take:
$BLUR stimmy → people stake and hold for s3 points
$BLUR stimmy → people sell for ETH/stables and bridge to Blast for airdrop points
That’s a lot of money that the market conceivably thought/expected would flow into NFTs, that is now not going to be doing that.
Let alone the idea that people might take additional funds that they had allocated for potentially buying NFTs, and instead are choosing to bridge it over to Blast.
In less than 24 hours, the TVL on Blast is over $60m. That’s insane. Especially when you consider it’s for an L2 that hasn’t even launched its testnet yet, and the “bridge” is just a multisig with 5 signers. There’s a lot of trust-me-bro going on, but that’s the risky game we play sometimes.
The other point that was being considered was “what will the big farmers do?” - the ones with 100s of NFTs from many collections. If blur stopped all incentives, there was a strong chance that they would have dumped them - but given the continued incentives of s3, we haven’t seen that happen yet.
Anyway, the impact on the market is a pretty bloody day (made even more bloody by the Binance/CZ news). Hard to know if it’s going to keep bleeding from here or we see a bottom and turnaround, but my plan for many weeks has been to sell out of a lot of collections I have low conviction on and rotate into higher-conviction plays, and that’s very much still the plan. Sucks that prices are down, but we must stay the course.
The question I am asking myself several times a day now is: if I had a magic wand and could liquidate my entire portfolio, would I buy back all the NFTs I have, at the prices that I could currently sell them for? The harsh reality is that the answer for almost all of my NFTs is “no”. So, I should sell. I just need to stop being emotional, stubborn, and lazy about it all.
What else?
Ah you’d think that this might be the end, but surely you know me too well for that by now, dear reader. We’re getting close though.
I’d be extremely remiss if I didn’t take some time to highlight some of the excellent work being done by other L2s already in existence.
Blast in their “developer docs” has this somewhat Machiavellian table:
I’m a big fan of both Optimism and Arbitrum. I think they’re massive net positives for our space. In fact, from what I hear, Blast is using the Optimisim tech-stack (which they have every right to do under its MIT license) for their chain [I am not 100% sure on this, but have heard a few things affirming it — if someone knows different let me know and I will update this with a correction].
The last line is particularly pernicious - OP and ARB both give out a tremendous amount of incentives to builders, creators, devs, users, etc. Base too for that matter.
Anyway, Blast is a business, they want more users and TVL, and they are exceptionally talented at knowing how to play the game to make that happen. That’s what makes me want to not-bet-against-them and not-middle-curve this whole airdrop/points situation.
One L2 missing from all of this is Frame, and L2 actually specifically designed with NFTs in mind. I have tremendous respect for cygaar as well fwiw.
Unfortunately.. while they may not be interested in ponzis, the crypto space has proven time and time and time and time and time again that.. they are. We are. We go where the money is, where the attention is. This is not to say that Frame can’t succeed — it very much can and I hope it does — and there are many instances of non-ponzi non-hype protocols performing fantastically.
But it’s going to be tough for any L2 to compete with the mindshare of Blast over the next few months, in this writers humble opinion.
Lido
Okay we’re almost at the end, I swear! But I can’t write this without writing about Lido. For those unaware, Lido is a protocol that allows people to stake their ETH in return for yield. The reason I mention it here and now is there there’s somewhat of an existential threat going on whereby the amount of ETH being staked with Lido is becoming so significant that the very decentralization-level of Ethereum is coming into question / under attack.
When one protocol holds enough of the supply of all ETH, it is not longer a sufficiently decentralized network.
How this relates to Blast is that, as of now, all ETH being bridged across is being staked with Lido.
It’s not ideal, it’s not helping the situation, but we can take some solace in the fact that it sounds like it’s not a permanent idea either:
“Initially Lido”
“In the future, the Blast community will have the power to supplement, or even fully replace, Lido and MakerDAO with Blast-native solutions or other third party protocols.”
So.. there’s that. Hopefully it happens sooner rather than later, and hopefully the Lido-threat-to-Ethereum gets resolved sooner rather than later as well.
Ahh… I think… That’s a wrap. Thank you for reading! Thank you even more if you didn’t chatGPT summary the whole thing, but no hard feelings if you did. I get it.
If you wanna support, please consider using my Blast access link: https://blast.io/JG04F
I’ll try and do something cool to reward the squad if and when the rewards come in.
If you want to join me as I go heads down trying to make money in this upcoming bull market, the best place to be is in my Discord server, ZenAcademy. You can join for pretty cheap, pick up a Denizen NFT on the secondary market and hop on in.
Aside from impeccable vibes, good humans, and multiple weekly calls — you also get access to Alpha such as my deep dive reports on projects and tokens. Just these last few weeks I called BOTTO at $0.20-$0.25 (now $0.40) and TAO at $125 (now $241).
They’re not always gonna be winners, but I like to share my thoughts, my research, and then hopefully allow you to go and DYOR (do your own research) and make decisions that are right for you.
p.s oh yeah i’m back on Substack, there’s no place like home.
Disclaimer: The content covered in this newsletter is not to be considered as investment advice. I’m not a financial adviser. These are only my own opinions and ideas. You should always consult with a professional/licensed financial adviser before trading or investing in any cryptocurrency related product.
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