Original source: "Biteye" community
Original author: Lucky
Metis, which has skyrocketed five times in three months, has undoubtedly caught the public's attention on the eve of the Cancun upgrade. So what is driving the development of Metis?
This article brings you a comprehensive analysis of Metis' progress in technology, ecological development flywheel, decentralized sorter, etc., and is committed to giving readers a clearer understanding of Metis' ecology.
01Introduction to Hybrid Rollups
MetisDAO is a Layer 2 scaling solution compatible with the Ethereum Virtual Machine (EVM). Like other Layer 2 solutions, it reduces the pressure on the Ethereum blockchain by packaging L2 transactions and sending them to the L1 network.
But unlike other L2s, Metis uses the innovative Hybrid Rollups technology, combining two mainstream blockchain expansion solutions: Optimistic Rollup (OP Rollup) and Zero-Knowledge Proofs Rollup (ZKPs Rollup).
OP Rollup handles potentially dishonest transactions through its fraud proof mechanism, while ZKPs provides a more secure verification method to ensure that only valid transactions are confirmed. Therefore, Metis's Hybrid Rollup effectively reduces the risk of fraud and erroneous transactions.
Metis's Hybrid Rollup makes Metis efficient and secure when processing large amounts of transactions, and the scalability of the entire system will not be limited. Any DAPP compatible with EVM can be seamlessly connected to Metis. In this way, Metis not only provides users with an efficient and secure trading environment, but also provides a convenient access platform for DAPP developers.
In the implementation of Hybrid Rollup, Metis incubated the zkMIPS project to help the implementation of Hybrid Rollup: ZKM. ZKM implements zero-knowledge proof (ZKP) security for all virtual machines (VMs) and applications from the CPU level, and supports multiple blockchain smart contract engines, allowing developers to easily apply ZKP for development.
ZKM can verify all blockchain and non-blockchain transactions, and can also reduce Gas fees and shorten withdrawal waiting time. The introduction of ZKM is one of the technical advantages of Metis compared to other L2s.
In addition to its Hybrid Rollup technology, the most eye-catching development direction of Metis in this round is its decentralized sorter that is about to be launched.
02Decentralized Sorter
The sequencer is responsible for sorting, organizing, packaging and submitting transactions to the L1 network in L2. Currently, most L2 projects (including Optimism and Arbitrum) rely on a single sequencer to complete the above tasks, which leads to three possible risks:
1) Single point of failure. If the sorter fails due to an attack or technical failure, the entire network will be shut down;
2) Scalability issues. A single sequencer may not be able to cope with the growing transaction volume;
3) Low resistance to censorship.
In addition to the above problems, centralized sorters also make the community and on-chain users only passive participants in the network, and cannot share sorter income with the public chain.
To solve the above problems, MetisDAO plans to launch a decentralized sequencer pool to address the risks associated with centralized sequencers, increase the scalability of the network, and build a unique Layer2 that is sustainable and community-centric.
Advantages of Metis's decentralized sorter:
1) In a decentralized sorter pool, multiple sorters work together. Any sorter that enters through staking has the right to see the content of the transaction pool and has the right to process transactions, making it impossible for a single sorter to maliciously manipulate. This not only increases the speed of transaction processing, but also increases the fault tolerance of the network (even if a sorter has a problem, the network can still operate normally);
2) Users can become new sorter nodes by staking the native token METIS, while allowing network participants to supervise the sorter nodes, improving the transparency and credibility of the entire system;
3) From the perspective of sustainable community development, node staking also helps reduce the supply of METIS in circulation, which may have a positive impact on the long-term value of the token;
4) The launch of the sorter pool also means that liquid staking/re-staking will be introduced into the Metis ecosystem. Liquidity staking has become one of the most important components in the Defi field since last year, occupying the largest piece of TVL cake in Defi. The introduction of liquidity staking into the Metis ecosystem can bring more possibilities and $Metis use cases to its ecosystem.
As shown in the figure above, Metis's Sequencer transaction process:
1. Start: The user starts trading;
2. Sequencer node: The transaction is forwarded to the network’s sequencer node;
3. Block generation: Sequencer receives transactions and creates blocks when the transactions are valid;
4. Finalization: Multi-party computation (MPC) nodes merge these blocks and forward them to the Ethereum main chain.
In order to encourage community participation, Metis also provides staking rewards for sorter nodes, which means that in addition to Gas income (currently the main income from sorting), these nodes can also receive additional METIS rewards.
This design will encourage more members to participate in the staking of sorter nodes, ensuring that power is not overly concentrated while also strengthening the concept of decentralization.
Before the decentralized sorter is officially launched, Metis will conduct three phases of community testing. Currently, the Metis sorter pool has conducted two rounds of community testing. The first round started from 1.3 and lasted for 27 days. Nearly 200,000 users participated in the first round of testing, generating 4 million on-chain transactions.
The second round of testing involved more than 300,000 users, and the network executed more than 11 million on-chain transactions. For those who missed the first two rounds of testing, you can pay more attention to the release time of the third round of community testing and participate in the third round of testing in time.
03Ecological Incentive Flywheel
On December 18 last year, Metis officially launched the MetisEDF (Metis Ecosystem Fund (EDF)) development plan, aiming to allocate 4.6 million METIS to further promote the development and innovation of the Metis system.
Based on the current Metis price of $106, the ecological fund is nearly US$500 million, making it the largest ecological incentive fund among all L1/L2 in the past two years.
The fund is allocated as follows:
Sequencer mining: 65.4% (3 million $METIS, this part of the funds is used to incentivize the mining income of sequencer nodes and promote community participation)
Ecosystem funding: 34.6% ($1.6 million METIS, this part of the funds is used to provide project parties with development, protocol deployment, liquidity provision, user incentives, and other measures that are conducive to the development of the ecosystem)
On February 8, Metis officially announced the launch of the Liquid Stake Blitz program, which aims to accelerate the growth of the LSD protocol and LSD-focused products on the Metis network by utilizing the MetisEDF ecosystem development fund with a total of up to 4.6 million METIS.
According to the Liquid Stake Blitz plan, from February 8 to the end of February, the LSD protocol of the Metis ecosystem will be able to initiate proposals within the Metis community governance system and enter the formal voting stage in March.
After the voting is over, a limited number of winning protocols will win the right to be paired with a decentralized sorter node (i.e., a whitelist seat), thereby obtaining stable node participation qualifications and receiving 20% of the MRR (Mining Reward Rate) mining incentives in the first year.
We need to note that the development of the LSD protocol in the Metis ecosystem is very helpful in lowering the staking threshold on the network.
Unlike the LSD protocol on Ethereum that lowers the threshold for POS node staking, the staking protocols in the Metis ecosystem, such as ENKI, lower the threshold for sorter node staking.
This gives ordinary users more opportunities to earn money:
1) At least 20% guaranteed mining income provided by the ecological fund;
2) Airdrop rewards of corresponding LSD future tokens;
3) Increase the demand for METIS so that the METIS ecosystem can achieve a flywheel effect of positive development.
Take Enki as an example. The protocol launched a Genesis Airdrop Program called Fantasy in early February, which will airdrop 1 million ENKI (10% of the supply) to community users as rewards;
In addition, Enki also announced that the team will not retain any tokens, and the remaining ENKI tokens, accounting for 90% of the total supply, will be released in various forms over time, which means that Enki users can continue to obtain ENKI income by re-staking eMETIS as seMETIS, or through various protocol interaction activities such as METIS/eMETIS LP pairing.
Friends who want to participate can use our Biteye exclusive invitation:
https://www.web3davincis.com/journeys/projects/enki?ref=0spK8VoR
For large capital entities, they can pledge 20k-100k Metis tokens to become a sorter node.
For individual users, they can pledge Metis on different LSD platforms to obtain corresponding node income. At the same time, the pledged certificates can also be circulated and used in the ecosystem.
The pioneer of decentralized sorters, the emergence of revenue sharing models, and the development of LSD all make $METIS fundamentally different from other L2 tokens.
For other L2 native tokens, they only have governance functions and cannot share revenue for holders.
Therefore, we can see that when Metis is enabled to generate income, more people are willing to come in and participate as nodes, leading to more tokens being pledged, further promoting the shortage of Metis token supply and driving further price growth.
The price increase attracts more participants, making the ecosystem more prosperous. The prosperity of the ecosystem strengthens the incentives for sorter nodes, and more people participate in staking. The entire development process gradually forms a positive flywheel.
04Current status of ecological development and key projects
The current TVL of Metis is $82.82M. From the above-mentioned changes in Metis TVL since 2023, we can see that since Metis launched the design of the decentralized sorter in 2024, the TVL on the chain has grown significantly, proving that the community and The market is optimistic about this direction.
The key projects of the Metis ecosystem are as follows:
1. ENKI: The first LSD project in the Metis ecosystem, which aims to simplify and democratize participation in the Metis sequencer node ecosystem. It enables ordinary investors to earn rewards by staking Metis Sequencer nodes. It is currently in the testnet and has not yet been officially launched;
2. Hera Finance: An AI-driven DEX aggregator that helps users find the best trading prices.
4. Ethena: A recently popular stablecoin protocol on Ethereum, it aims to provide the crypto world with censorship-resistant, scalable native cryptocurrency solutions through USDe. On February 28, it announced that it will cooperate with the Metis ecosystem.
5. Aave: Currently the protocol with the largest TVL on Metis and also the largest lending protocol on the entire chain.
6. Hermes Protocol: A DEX that allows users to trade without slippage.
7. Net Swap: The first DEX in the Metis ecosystem, allowing users to conduct fast and low-cost token transactions on the Metis network.
8. Tethys Finance: The first perpetual trading protocol in the Metis ecosystem, allowing users to trade major tokens and METIS with up to 50x leverage
9. Stargate: An asset cross-chain bridge developed by LayerZero Labs, a cross-chain interoperability protocol standard. Through Stargate, users and Dapps can transfer assets across multiple chains.
10. Artemis Finance: A liquidity pledge protocol designed specifically for the Metis decentralized sorter pool, and one of the two LSDs that Metis has officially announced its cooperation with. Users can pledge their $METIS tokens on Artemis and receive liquid tokens $artMETIS, automatically accumulating income and using $artMETIS for Metis on-chain interactions.
11. WAGMI: A comprehensive Defi solution, whose liquidity pool can automatically rebalance and dynamically allocate funds to maximize user returns when trading. It received a 2 million grant from the Metis Ecological Fund and announced a partnership with DWF.
Metis ecological incentives have just started, which also means there are alpha opportunities and it is worth keeping an eye on.
05 Conclusion
As the first Ethereum Rollup to adopt a decentralized sorter, Metis provides users and DAPP developers with an efficient, secure trading environment and a convenient access platform with its unique Hybrid Rollups technology and the upcoming decentralized sorter.
With the continuous growth of the Metis ecosystem, the advancement of multiple key projects and the official launch of the subsequent decentralized sorter, under the positive incentives of its ecological fund, we have reason to believe that the Metis ecosystem is expected to occupy a place in the L2 competition and bring more value and opportunities to users and developers.
