Blast L2 backed protocol, Risk, rugs 500 ETH amid shoddy due diligence in project onboarding

Blast L2, a new player in the Layer 2 space, forayed into the market with a thud, with influencers and early adopters flocking it as it on-boarded projects like moth’s flight path leads them to light. However, in an unfortunate turn of events, one of the projects on the chain took advantage of the hype to rug millions of dollars.

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Millions lost as one Blast L2 project rugs, how it started

Blast, a new Ethereum Layer 2 (L2) emerged as a significant contender in the space, with the promise of a unique approach to decentralized finance (DeFi). Specifically, it committed to promoting financial inclusion achieved via a community-driven platform. The project started the early access phase of its airdrop in November, with participants requiring an invite code to enter.

Shortly after its market debut, controversies raised concerning its operating formula, where users deposited ETH in exchange for points. It advertised itself as the first native yield L2 where you can get 4% to 5% yield on ETH/USDC, "risk-free".  Deposited ETH would only be available for withdrawal in February 2024. Redeeming of points would only be available in May 2024.

Blast airdrop timeline

For points, participants had to deposit more ETH, invite more people via a code and earn from your referrals. This raised the pyramid hibby-jibbies as the project sounded more like an ETH black hole smart contract.

How it is going

One of the projects on the Blast L2 chain, Risk, rugged participants up to 500ETH, worth over $1.5 million at current rates. This was after garnering more than 21,000 early adopters on riskonblast.xyz.

Users blame Blast L2 for the incident, attributing it to poor due diligence before onboarding and backing the project. Influencers are also taking the blame, on their part, for backing undoxxed founders with no track record in the industry.

With reports circulating that @RiskonBlast is the first to rug on Blast L2 after disappearing following a $1.5M+ presale, Risk has since deleted its X account.

Blast did not reply immediately to FXStreet request for comment.