Expect the unexpected.

Blur surprised many with the announcement of a new L2 called Blast. While they are separate entities, Pacman (Blur founder) leads both organisations. The fate of BLUR and BLAST are intertwined like star-crossed lovers.

Overall, I think this is positive for BLUR in the short-mid term, with potential for asymmetric upside if the bullish scenario plays out

BLUR = all the fundamentals as per our previous report + future new product revenue + L2 upside (reasonably popular L2s valued between $100M – $1.5B today)

Some of my personal notes:

BLAST

• L2 (OP) with real world yield: via Lido + Maker + Gas fees back to devs 

• $20M raised.

• Purpose: Blur, perps + other new products 

• Testnet in Jan, Airdrop in May

• 50% of community rewards to early access, 50% to devs. 

• Devs go where incentives are. And if there are good incentives (airdrop, gas fees) to build there, they will go

• How to participate:

  • Points earned for bridging ETH and earning yield

  • Invite your squad, earn 16% of the points and 8% of their next level invitee points (almost like a pyramid scheme)

  • Luck, Spins as gamification mechanisms

• Could attract a good number of farmers:

  • Earn staking yield that you would earn on Lido anyway + call option on a new L2 (probably worth something)

  • Spinning + Luck feature + MLM scheme keeps game interesting for a while

  • Downside is ETH locked till Feb and smart contract/bridge risk

• 8000 ETH ($16M) locked on Blast bridge in <24 hours (https://etherscan.io/address/0x5f6ae08b8aeb7078cf2f96afb089d7c9f51da47d)

BLUR

• Another $40M raised

• Perps product in development. New products will be built on Blast

• S3 program:

  • 50% of S3 incentives for BLUR holders. Stake BLUR to earn points. Higher multipliers the longer you stake. ~5x multiplier if you hold the whole way. Multipliers drop if you withdraw

  • 50% for liquidity providers on Blur & Blend

• Bullish unlock so far, price is up 15% after S2 tokens were distributed today

• 225M BLUR is currently staked (~20% of circulating)

• Circulating market cap remains the same. rewards came from the community treasury

Bullish scenario for BLUR

• Bull market in mid 2024: NFTs revive, crypto markets are vibrant

• NFT volumes up. NFT perps product launch. Blur fee switch on, generating significant revenue

• Blast L2 catches wind and attract dev interest with incentives

Bearish scenario for BLUR

• L2 gets no adoption (low end of L2 valuation)

• Blur team split focus, loses market share on NFT volumes and fumbles L2.