On Wednesday, Jan. 31, blockchain researcher 0xKaden called out the controversial crypto project Blast essentially for stealing code and trying to pass it off as its own. In particular, Blast, a much-anticipated, but also highly criticized project that raised over $1 billion last year using what some have called manipulative marketing techniques, is accused of stealing work already published by Optimism, one of the largest Ethereum L2s.

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“Blast is really out here putting a BSL license on optimisms MIT code,” Kaden posted. “Does this mean ppl can't fork optimism anymore because it's licensed to blast??”

Kaden was referring to the permissive software license developed by Massachusetts Institute of Technology that gives authors a copyright credit, but allows others to freely access and remix code — typically with attribution — and the Business Source License, which is not open-source.

Soon after, another pseudonymous blockchain sleuth, Pop Punk, posted screenshots comparing sections of Blast and Optimism’s code, which indeed were identical, apart from a few incidental tweaks, including a typo. “Hey Blast, It's not very cash money of you to fork Optimism's code, add a typo, remove a function, and then change the license,” Punk said on Twitter/X.

This is not the first time Blast has apparently crossed lines. It had a pedigree to brag about, including founder Tieshun “Pacman” Roquerre, the developer behind the extremely successful decentralized NFT exchange Blur, respected venture capital backers Paradigm and an innovative idea to offer users “native yield.” But Blast burst onto the scene in a storm of controversy.

When announced, the project had not shipped anything beyond a “one way” bridge that allowed people to deposit but not withdraw funds — they’d have to wait until February 2024, at the earliest. Further, users were sending funds to a five-key multi-signature wallet, where all the signers seemed to be connected to a single entity. It raised over $1.1 billion before hiring engineers.

Perhaps worse than this lax approach towards security was the way Blast actively solicited deposits and hyped the project, incentivizing the rush of deposits by promising an airdrop in May determined by a “points” system. It was a move that even Dan Robinson, a general partner at Blast’s largest principal investor, Paradigm, said “cheapens the work of a serious team” and “sets a bad precedent for other projects.”

The Blast business model itself is not necessarily out-of-line — the plan is to offer annual yields around 4%-5% earned by staking deposited ETH on Lido and tapping MakerDAO’s DAI Savings Rate. Points systems are also an increasingly common way for projects to determine how to distribute tokens, which some say are harder to game and lead to fairer results. It’s hard also to fault Blast’s efforts to incentivize growth by offering a referral system and other gamified ways of earning points — it’s just natural marketing.

Further, Pacman said the team would incentivize outside development by sending 100% of gas fees to developers building on the network. He also floated an idea involving NFT perpetuals, given Blast’s close association with Blur. It’s clear enough Pacman has a strategic mind, to such an extent that I wonder if he sometimes stirs controversy to garner attention — perhaps like plagiarizing work that’s allowed to be copied.

The question is how far a project should go in bending crypto’s cultural norms, and perhaps even the law (MIT licenses do come with certain restrictions), in an effort to make a name and build a user base? Blast is launching at an opportune time, an era of massive layer 2 growth. But the field is crowded full of established rival networks including Arbitrum, Base, Optimism and Polygon, among many others.

At launch, if it launches, Blast will be differentiated by being the first to offer yield to users on ETH and stablecoins, an attractive feature that some think could become the next big trend in crypto — tapping into Ethereum’s equivalent of a “risk-free rate of return.” Its multi-sig situation is also not far out from the norm, considering that all L2s today are controlled by similar set-ups, some also with pseudonymous signers.

However, it’s clear the project is playing fast and loose, signaling it is looking to win what it sees as a zero-sum game to capture capital, attention, users and dev talent.

“The ONLY people i know that are excited about Blast are airdrop farmers. Developers see it for what it is. A chain for farmers,” Pop Punk, the psuedonymous dev, told CoinDesk in a direct message.

Copying code is the norm in crypto, because open-source communities see sharing information as positive-sum. The fact that Blast’s team is slapping a copyright on code at all, let alone code it appears it copied, is certainly a way to signal priorities. Because the MIT license is permissionless, Blast was free to use, remix and distribute Optimism’s code so long as its version was also made open-source — and it’s telling that it chose a business license.

Plagiarism battles have happened in the past in crypto, including between rival zk-proof-based projects Matter Labs and Polygon, which claimed the former failed to appropriately attribute the latter when using its open-source code. Similarly, Uniswap, when announcing its upcoming V4 release, stirred controversy when announcing it publish under a slightly-restrictive license, in order to benefit from its intellectual property for longer.

“I think that open source is generally done well in Web3, and it's pretty inevitable,” Punk said. “Many projects are forks with added logic and complexity. It allows for fast iteration and building. But licenses should be respected, contrary to what Blast has done here. It's… a cultural violation, and they're stepping into the legal violations.”

These are problems without clear-cut answers, especially in a space where nominally even competitors are collaborators by nature of the design of open blockchains. The case for copyright protections is that people who contribute something meaningful to the world ought to benefit from it.

The question is what exactly Blast is contributing and does it deserve protection from the law?

Opinion The Node Newsletters Layer 2s Optimism Ethereum Yield Airdrops

Daniel Kuhn

Daniel Kuhn was a deputy managing editor for Consensus Magazine, where he helped produce monthly editorial packages and the opinion section. He also wrote a daily news rundown and a twice-weekly column for The Node newsletter. He first appeared in print in Financial Planning, a trade publication magazine. Before journalism, he studied philosophy as an undergrad, English literature in graduate school and business and economic reporting at an NYU professional program. You can connect with him on Twitter and Telegram @danielgkuhn or find him on Urbit as ~dorrys-lonreb.