Partnered With:

Metis Research Report: The First Decentralized Sorter for Layer2.

日月小楚

Read this article in 16 Minutes

The first decentralized sequencer for Layer2, Metis, has taken the most important step forward.

Original Title: "Research Report: Metis"

Original Author: Ri Yue Xiao Chu

1 Basic Information

1 In layer2, the role of the sorter is to organize and compress hundreds or thousands of transactions into one and then submit it to layer1 for confirmation. It can be said that it achieves high performance and low transaction fees for layer2. However, if important things are centralized, there is a risk of malfeasance or single point of failure. It can be said that the decentralization of the layer2 sorter is imperative. Metis takes a step ahead and conducts decentralized Pos sorter testing on the Holesky testnet on the 27th, and will start community testing on January 2nd.

2 Metis is a layer2 developed for Optimistic Rollup, which went live on the mainnet in 21 and was the earliest second-layer network to go live Rollup. It was upgraded in 24 to a Hybrid Rollup that combines the Optimistic Rollup architecture with zero-knowledge proof zk.

3 Metis has a circulating market value of only 83 million, with a FDV of 180 million US dollars. The quotas of institutions and teams have all been unlocked. According to on-chain wallet tracking, institutional chips have already been sold, so it can be considered that there are no longer any institutions. In contrast, op and arb still have a large amount of institutional and team chips to be unlocked, which is equivalent to a huge increase in issuance every month. In terms of token functionality, in addition to governance functions like op and arb, Metis is also used for network gas fees and node staking (each node needs to exceed 20,000), which brings real demand to Metis.

Official website: https://www.metis.io/

Twitter: https://twitter.com/MetisDAO

Time: November 30th, 2023.

Author: Riyue Xiaochu (Twitter: https://twitter.com/riyuexiaochu )

2 Project Introduction

Metis is an Ethereum layer 2 scaling solution developed based on Optimistic Rollup, aiming to solve the "trilemma" of blockchain, which refers to the trade-off between scalability, security, and decentralization.

1. Decentralization

2. Security

3. Scalability

The demand for Ethereum has increased significantly, leading to a surge in transaction prices while transaction speeds lag behind. As a Smart L2 solution for Ethereum, Metis not only increases transaction speed (rapid confirmation) but also increases throughput (processing a large number of transactions per second).

The most important thing is that Metis is creating solutions that are easy to access, affordable, and adaptable - so that anyone can use blockchain technology to build, operate, and grow any application, business, or community.

Hybrid Rollup

On March 2, 2023, MetisDAO announced that they are building the "first-ever hybrid Rollup" by combining the Optimistic Rollup architecture with zero-knowledge proof (zk) technology.According to the ChainCatcher report, on July 13th, the MetisDAO Foundation announced the official release of its incubated new project ZKM. ZKM will launch on the testnet before the end of the year, upgrading the existing Optimistic Rollup to Hybrid Rollup, enabling timely withdrawals (the original withdrawal period for OP was 7 days) and ensuring security.

It is reported that ZKM uses the MIPS instruction set to implement zero-knowledge proof (ZKP) security for all virtual machines (VMs) and applications at the CPU level, and supports multiple blockchain smart contract engines. The plug-and-play feature allows developers to apply ZKP without changing the code library, reducing adoption costs. With the decentralized security infrastructure of Ethereum, ZKM can verify all blockchain and non-blockchain transactions. The goal of this project is to go beyond L2 and expand to L1, cloud computing, and the Internet of Things (IoT) fields, making Ethereum the settlement layer for the global blockchain and non-blockchain world.

3 Decentralized Sorter

For each layer2, the user's transaction data needs to be transmitted to the main ETH network. In principle, the user's transaction data can be directly transmitted to layer1. However, if this is done, the transactions on layer2 will be as expensive and slow as those on ETH. This obviously goes against the original intention of layer2. Therefore, the solution is a sorter, which compresses hundreds or thousands of transactions on layer2 into one transaction and hands it over to the main network for packaging. This can greatly reduce transaction fees and confirmation times on Layer2.

The significance of Layer2 is to increase the throughput of ETH and reduce transaction fees. It can be said that it is the sorter that enables Layer2 to achieve this goal, and its importance is self-evident. The current situation is that the sorters of Layer2 are centralized, mostly operated by project parties, such as the OP Foundation and Arbitrum Foundation. Therefore, a very worrying issue now is the high centralization of sorters. Regardless of whether they will act maliciously, from a practical perspective, if a centralized sorter fails or is attacked, it can easily pose a threat to the entire Layer2.

Although major layer2 solutions have plans for decentralized sorters in their Roadmaps, the reality is that there have been no results yet. This may be due to lower priority or vested interests (bringing huge gas revenue to project parties every year). Therefore, every L2 scaling solution needs a decentralized sorter to improve security and reduce risks. Metis will soon become the first L2 to achieve this goal.

Metis' decentralized Pos sorter is now running on the Holesky testnet, which can be divided into three rounds, including simulating the behavior of real nodes, increasing the number of nodes, and staking tests, etc. It will start on January 3, 24 and open for community testing. Users can interact with new ecosystem dApps on the Holesky testnet and receive rewards for one month.

Each sorting node requires a pledge of 20,000 Metis, and of course, the mining rewards will be quite generous. 50% of the total Metis will be used for node rewards. For users who do not have enough funds to become nodes, Metis will soon launch a liquid staking Dapp Enki, allowing these community users to participate in node staking and receive corresponding benefits.

4 Project Status

According to L2beat data, Metis currently has a TVL of $81.45 million, ranking 12th in layer2. The highest TVL reached $165 million so far this year.

Among all layer2 solutions, Metis has the lowest transaction fees. For ETH transfers less than 0.01 USD, Metis only requires 0.04 USD, which is much lower than the 0.12 USD required by Arbitrum, 0.08 USD required by Optimism, and 0.24 USD required by StarkNet. For token transactions, Metis only requires 0.04 USD, second only to the Boba network, and much lower than Arbitrum and Optimism.

However, in the near future, Metis' transaction fees will increase to be similar to Optimsim's. This is because the current low transaction fees are due to Metis integrating a decentralized storage MemoLabs. Metis only submits transaction commitments to the Ethereum main chain in merkletree format and provides complete transaction data in MemoLabs, from which validators can download and submit fraud proofs when necessary. However, the community has voted to change the DA layer to use the ETH mainnet, which will achieve the highest security standards for Rollup and meet the needs of the decentralized Pos sorter.

Project Ecology

Maia

https://linktr.ee/maiadao

Hummus Exchange

Netswap

·IDO 0.3% TGE100%

Utility of Metis Token.

1. Gas tokens require the use of Metis tokens as Gas for each transaction, similar to how transactions on Ethereum require payment in ETH for Gas fees.

2. Builder mining rewards. Metis has long-term support for the development of the ecosystem. All builders in the Metis ecosystem will receive Builder mining rewards based on the transaction volume they bring to the network. The more transactions, the higher the rewards, resulting in a win-win situation for both the ecosystem and the builders.

4. Sequencer Mining Rewards: Sequencer nodes help protect the network, facilitate transactions, and mine Metis tokens as rewards.

6 On-chain Data Analysis 1130

https://etherscan.io/token/0x9E32b13ce7f2E80A01932B42553652E053D6ed8e#balances

https://andromeda-explorer.metis.io/token/0xDeadDeAddeAddEAddeadDEaDDEAdDeaDDeAD0000/token-holders

Position Address 2: It is speculated to be the investors and team, who initially generated 3 million Metis, which have now been fully unlocked, with 845,000 remaining in the wallet.

Ranking address 3: KuCoin Exchange, with 100,000 tokens.

Ranking Address 5: Uniswap, with 64,000 tokens.

Ranking Address 6: DWF Wallet

Position addresses 8, 10~12, 14~16: Coinbase's cluster wallet.

Tracking of Position Address 2

Metis Network

From the number of Metis Network, there was a rapid growth before June 22nd, with two stair-step increases, which were likely due to unlocked chips. In May 2022, it reached a peak of 2.88 million, and in the last 18 months, there was a small decline followed by a rebound, with the lowest point being 2.61 million. Recently, it has rebounded to 2.81 million. Therefore, the token in the Metis mainnet is relatively stable.