What do you think of the launch of @MetisL2's decentralized Sequencer mining mechanism?
Author: Haotian
Cover: MetisDAO
How do you evaluate the launch of @MetisL2's decentralized sequencer mining mechanism? If the Ethereum ecosystem has entered the DeFi "old age" of the battle for restaking points + locking ETH liquidity, Metis uses decentralized sequencer operation and @ENKIProtocol LST platform's staking mining to form a linkage, and has the opportunity to reproduce the growth process of DeFi's "embryo" on layer2? Next, let me tell you my opinion:
1) When Restaking platforms appear one after another on Ethereum, ETH native assets will become a hot commodity among platforms. Therefore, a large number of platforms use Wrapped version of ETH in exchange for users' ETH assets. Although the wrapped version of assets can also circulate in the DeFi system, users cannot Redeem their native ETH assets.
The reason is simple. Imagine if a Restaking platform stores LRT certificates of other platforms but no native ETH assets, this LST platform is like a tree without roots. Therefore, of course, we have to try every possible way to get users to "hand over" their native ETH assets.
Of course, users don’t care about this issue during the Restaking Fomo period. Depositing ETH can be exchanged for the packaged version of ETH (which can be circulated), and you can also get Eigenlayer platform points and LST staking platform points. These are all certificates for future airdrops. Why not do it?
If the assets of these Restaking platforms are combined and there are no security issues in any link, there is no big problem. Once the user settles the account, he hands over the native ETH, but in exchange for the tradable packaged ETH and the future multi-platform points airdrop opportunities, which seems to make sense. But all this requires that the Restaking combination economy around @eigenlayer will not collapse. If security issues emerge and users want to redeem their native assets and flee, they will find that it is too late.
This does not mean to Fud the Ethereum Restaking DeFi ecosystem. In fact, as more and more Staking+Restaking platforms emerge, the battle to grab ETH native assets has to be launched. Everyone is scrambling for ETH native assets. There are fewer and fewer ETHs that can be circulated in the market. The "leverage" of the DeFi financial Lego building will be stacked higher and higher. To be radical, it can also be regarded as a new DeFi Summer.
However, from another perspective, this is also a typical feature of an "aging" ecosystem. There are only so many native assets without leverage in the market, and we need to assemble a leveraged Empire State Building. Whoever can grab the native assets is qualified to build the building. As a result, everyone is doing high-leverage things. An Eigenlayer has revitalized the Ethereum DeFi ecosystem, but the risks behind it are hard to think about.
2) As a part of Ethereum layer2 ecosystem, Metis has made some unusual moves in the past few years:
1. Replace $ETH as the Gas Token of the layer2 platform. At the beginning of the chain launch, Metis was used as the Utility Token, allowing $METIS to be the native Token to build a foundation;
2. As an OP-Rollup, it chose the combined DA paradigm of off-chain centralized Storage DA + key verifiable data submitted to Ethereum from the beginning, which can greatly reduce Gas. It can also flexibly adjust DA as the expansion space of Ethereum Blob increases to provide a DA method that is more in line with market trends. This also provides basic flexibility for the implementation of its Hybrid Rollup;
3. Launch a decentralized sequencer system, and use native tokens to incentivize decentralized sequencer nodes to mine. After the official launch, you can get a 20% APY income. You need to pay money, which is the native underlying income. Just like users can get a 20% income by staking ETH in Lido, the value of the utility token will be maximized in this link. In theory, the stronger the sustainability of this native mining income, the greater the help to the subsequent combinatorial development of the DeFi ecosystem. Just imagine that Lido's current 4% income is still continuing to derive, not to mention the early Metis DeFi ecosystem that started with 20%;
4. With the bottom-level decentralized Sequencer mining incentives of the native token, many LST platforms like @ENKIProtocol @Artemisfinance will emerge. After all, this mining income is quite attractive to some funds that are unwilling to take the risk of playing Restaking points on the mainnet;
5. When a large number of LST platforms emerge, LRT platforms will follow suit, because staking METIS generates eMetis. In addition to mining points on the LST platform, eMetis can also be staked to other LRT platforms to further earn income. At the same time, some other DeFi platforms such as DEX, Derivatives, CDP, etc. will also participate in this overflowing liquidity relay. Slowly, the old DeFi Farming path that Ethereum DeFi has taken can theoretically be reproduced by Metis.
In short, when layer2s are flourishing everywhere and are in a development dilemma, Metis's original rebellious move of abandoning ETH as a Gas Token has established the foundation for the development of the DeFi ecosystem, and its choice to implement the underlying decentralized Sequencer system has laid the foundation for the operation of this DeFi economy.
At present, the fundamental reason why many Ethereum layer2 DeFis are developing relatively poorly is that the second layer has no native assets to drive value growth. It is difficult to build a healthy and sustainable ecosystem relying solely on the second layer encapsulated ETH tokens and governance tokens.
Obviously, Metis’ market value in layer2 is still a baby compared to those layer2s with a valuation of tens of billions that were born with a silver spoon. However, if everyone agrees with this paradigm of driving the growth of decentralized economies based on native utility tokens, at least compared to other layer2s, Metis is obviously the most thorough and most likely to grow in the future DeFi ecosystem growth potential.
(So, is this the real reason why Vitalik’s mother pushed Metis? To create new layer2 vitality for Ethereum.
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