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Ethereum (ETH) Layer 2 scaling solution Blast’s ecosystem witnessed its first rug pull event. An anonymous account RiskOnBlast, claiming to be a platform for gambling and exchange, raised 420 ETH (equivalent to $1.3 million) from investors in a recent seed round and abruptly disappeared afterwards. Additionally, it participated in Blast’s Big Bang competition, where winning could potentially lead to further funding for the platform.

On Sunday, all social media accounts associated with the project were scrapped. The funds seemingly stolen were sourced from more than 750 wallets. Notably, about $500,000 was transferred to the swapping service ChangeNow, $360,000 to the cryptocurrency exchange MEXC, and $187,000 to another cryptocurrency exchange, Bybit, as reported by Onchain researcher Somaxbt.

Blast had previously shared information about the project on its official X account, expressing optimism about its undeniable potential. While Blast itself doesn’t dictate the actions of projects on its blockchain, the social endorsement could be interpreted by investors as an indication of legitimacy.

One investor reported a loss exceeding $12,500, prompting market observers to criticize the absence of due diligence and the risky capital investments in projects that seemingly emerge overnight. Such euphoria around the project characterized a sign of the bull market for some investors, where valuations can often become exuberant, and funds are freely invested without a thorough assessment.

According to PeckShield monitoring, most of the stolen funds from Rug’s Blast ecological game Risk have been transferred to the exchanges ChangeNow, Bybit, MEXC and SideShift, and a small part of the stolen funds have been cross-chained to Arbitrum and Cosmos.

#PeckShieldAlert Coindesk has reported that @Riskonblast has rugged 420 $ETH (~$1.3m). Most of the stolen funds have already been transferred to #ChangeNow, #Bybit, #MEXC, and #SideShift. A small part of the stolen funds has been bridged to #Arbitrum & #Cosmos. #Blast_L2… pic.twitter.com/LEbRPLhiyk

— PeckShieldAlert (@PeckShieldAlert) February 26, 2024

Blast Charts Course for Growth

Blast is an Ethereum Layer 2 scaling solution that offers native yield opportunities for both ETH and stablecoins, which is generated through ETH staking and Real World Asset (RWA) protocols. Originating from the creators of the non-fungible token (NFT) marketplace BLUR, Blast garnered backing from Paradigm and Standard Crypto, raising a $20 million investment shortly after its introduction last year. The official Blast mainnet launch is anticipated for February 2024, with points redemption slated for May 2024.

Recently, Blast has selected 47 projects as winners in its developer competition, chosen from a pool of 3,000 applications. These winning teams are set to receive undisclosed funding in the upcoming months aimed at supporting the development of an ecosystem on the emerging blockchain.

Amid the swift expansion and progress of the Blast ecosystem, recent challenges emphasize the importance of vigilance as the project continues to innovate and advance.

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