Metis: Leading the way to decentralization

Article by Kevin Liu, Co-Founder of Metis and CEO of ZKM

Article compilation: Block unicorn

In the ever-evolving field of Blockchain technology, the concept of Decentralization has become a guiding principle, especially for Ethereum, where Decentralization is a key differentiator and advantage over other Blockchain ecosystems. However, the question remains today from Ethereum’s first steps: how do we achieve decentralization?

As mentioned in this post, Vitalik presents the milestones that Ethereum rollups need to reach to achieve full functionality and true decentralization. By going through these stages, Rollup will say goodbye to the initial stages of development and address the most challenging side of the Blockchain trilemma.

Vitalik’s proposal outlines the “how” well: Rollups should become fully functional and technically Decentralization. However, Decentralization is not just on a technical level, it is a complex architecture and we need to build it. So, “how” can a rollup reach this elusive goal of decentralization?

As a co-founder of Metis and subsequently leading a project (ZKM) dedicated to building infrastructure to enable hybrid rollup technology, it was this “how” that kept me up at night.

Decentralization Phase: Strategic Blueprint

The journey to full decentralization is divided into four stages:

Stage 0: Cold Start – Laying the foundation for Decentralization Stage 0, the “Cold Start”, launches the Blockchain project and focuses on building a strong infrastructure. Similar to the heavy construction phase, the core team plays a central role in development and management. Although the participation of the entire community is encouraged, it remains a challenge to take control during this onerous phase of construction.

In the complexity of Phase 0, community engagement is crucial. While the core team leads the heavy lifting, the project encourages community participation through activities such as voting and Token delegation. The problem, however, is that these activities are only within a limited range of parameters, providing a semblance of decentralization.

To truly drive decentralization, strategic community engagement is essential. In addition to Token-based voting, it is equally important to foster true community ownership through transparent communication, education, and collaboration. Building a community that is truly committed to the success of the project lays the foundation for meaningful decentralization.

Phase 0 Brief Summary:

1. Goal: Lay the foundation for the business.

2. Focus on: Building a solid foundation for future growth and decentralization efforts.

3. Approach: By building a team, focus on efficiency and execution while giving the community a sense of ownership of the project, even if it’s not literal ownership.

Phase 1: Infrastructure Decentralization – Unleashing the Power of Utility Tokens

Utility Tokens play a dual role in Phase 1. 1) In addition to being trading tools, they also become tools for network security and decentralization. 2) Real contributors use utility Tokens for staking, mining, voting, and governance, actively shaping the trajectory of the project.

Empowering Real Contributors: Ways to Build Together

Phase 1 heralded an era in which the construction and operation of infrastructure was no longer the exclusive domain of a central authority. True contributors, actively contributing to network growth, gaining access to tools and incentives for critical processes. This democratization is consistent with the principle of decentralization and fosters collective ownership.

Recognizing the importance of infrastructure decentralization is crucial. As the network infrastructure becomes more Decentralization, it becomes more resilient, adaptable, and able to withstand the challenges that may arise in the dynamic field of Blockchain technology.

By eliminating a single point of control, harnessing the power of utility tokens, and empowering true contributors, Blockchain projects lay the foundation for a stronger and participatory ecosystem. This evolution is not an isolated achievement, but a strategic stepping stone to a decentralization future.

Phase 1 Brief Summary:

1. Goal: Eliminate a single point of control in technology.

2. Focus on: Decentralized control and ownership of key components, leveraging utility Tokens to secure the network.

3. Approach: Empower real contributors to participate in infrastructure construction and operations, and foster a more resilient and censorship-resistant network.

Phase 2: Revenue Sharing - Aligning Benefits for Sustainable Growth

Many Blockchain projects and ecosystems face difficulties when dealing with different goals between short-term Token holders and long-term stakeholders, such as core teams and major contributors. Short-term Token holders prioritize immediate price Fluctuations in search of quick returns, while long-term stakeholders want to build a sustainable future.

Shifting Mindset: From AirdropMining to Ecosystem Engagement

The key to resolving these conflicts lies in changing the mindset of community members. Moving beyond the tendency to join the ecosystem just for the sake of AirdropMining, participants must embrace a more active role and participate in the growth of the ecosystem. This shift means understanding that rewards are earned through active participation rather than passive speculation.

**Metis: Decentralization of Sequencers (Block Sequencers) via Revenue Sharing **

A vivid example of this transformative approach is Metis’ decision to Decentralization its Sequencer. Metis has adopted a revenue sharing model with all node operators, creating a system that allows Token holders to stake their assets to earn income and mining rewards. This approach establishes a direct relationship between community engagement, staking to ensure cybersecurity, and the overall value of the Metis network.

Ecosystem Growth and Stakeholder Benefits

The beauty of this model lies in its self-reinforcing nature. More active Nodes and increased community participation lead to higher levels of staking, enhancing the security of the network. As the Metis ecosystem expands to attract more dApps and builders, the overall value of the network grows. As a result, stakeholders, both in the short and long term, benefit from the prosperity of the ecosystem.

Coordinated interest: a prerequisite for sustainable development

Phase 2 focuses on aligning the interests of all parties involved in the ecosystem. By incentivizing active participation and contribution, rather than passive speculation, Blockchain projects can foster a community that is truly committed to the long-term success of the network. The shift from a collective vision of short-term gains to sustainable growth ensures that the interests of all stakeholders are aligned, laying the foundation for sustainable development.

Revenue sharing is not just a mechanism for distributing rewards; As Metis demonstrates, this approach sets the stage for a Decentralization ecosystem where each participant is not just a beneficiary, but an active contributor to the project’s mutual success.

Brief summary of Phase 2:

1. Goal: Coordinate the interests of short-term Token holders and long-term builders.

2. Focus on: Introduce a revenue-sharing mechanism to incentivize active community participation.

3. Approach: Shift the community mindset from short-term gains to active participation in ecosystem growth, such as Metis’ model, where revenue sharing encourages collaboration and contribution.

Phase 3: Total Governance - Tackling Complexity with Two Layers of Governance

The ultimate goal of the journey is to establish a comprehensive governance structure that coordinates the interests of the broader community, small Token holders, and key stakeholders. While voting power based on the number of tokens may be at risk of being dominated by large holders, a more nuanced approach is needed. The solution lies in drawing inspiration from modern political structures to create a two-tier governance system that ensures inclusiveness and balances the influence of various stakeholders.

Solving the Large Investors Problem

The challenge at this stage is twofold: giving small Token holders the ability to influence ecosystem decisions while preventing undue influence from large Token holders. A traditional single-tier governance structure based solely on the number of tokens may inadvertently favor whales (large investors), obscuring the voices of smaller contributors and community members.

Metis’ two-tier governance model: Commons and Eco Nodes

Metis’ two-tier governance model includes Commons and Eco Nodes. Commons is similar to a DAO in that each community member can create, join, and form interest groups.

The Commons works similarly to parliaments in most Western political structures. In Commons, small Token holders pool their voting power and collectively stake it to the governance platform, thereby enhancing their influence. This collective power gives smaller Token holders a more substantial say in the decision-making process, balancing the impact of giant Whales.

Commons as a Tier 1 Governance: A Forum for Democracy

In Commons, members can submit proposals, participate in debates, and collectively decide on matters that affect ecosystems. This vibrant and inclusive space ensures that even small Token holders can actively participate and contribute to the governance of the project. The proposal approved by the Commons then goes to the second tier of governance.

Eco Nodes as a Second Layer: Guardian of Long-Term Benefits

Eco Nodes form the upper echelons of governance, made up of core builders, contributors, and stakeholders Depth committed to the long-term success and growth of the ecosystem. Eco Nodes operates similarly to the Senate in most Western political structures. Unlike the Commons, Eco Nodes has a dual responsibility - to validate proposals and take decisive action. Their voting power is not just determined by the number of tokens; instead, it is finely tuned according to prestige power. Prestige power is earned through past contributions, creating a more elitist system.

Balancing & Ensuring Accountability

The two-tier governance model maintains a delicate balance by enabling small Token holders to collectively influence decision-making, while having Eco Nodes act as a gatekeeper to review the rationality and long-term viability of proposals. The system is designed to be flexible, allowing the Commons to evolve into Eco Nodes when specific criteria are met, and Eco Nodes may be penalized in the event of malicious behavior. This trade-off approach ensures accountability and promotes a vibrant and responsive governance structure.

By leveraging collective influence in the Commons, and incorporating the wisdom and experience of Eco Nodes, Metis aims to ensure fair and transparent representation of all stakeholders. This innovative governance structure demonstrates a commitment to true decentralization and community empowerment.

Brief summary of Phase 3:

1. Goal: Establish the right structure for different types of stakeholders.

2. Focus on: Create a two-tier governance model that balances the impact of various stakeholders, including small Token holders and key contributors.

3. Methodology: Establish a Commons layer for community engagement and proposal approval, and an Eco Nodes layer for validation and decision-making, ensuring a fair and accountable governance structure.

Summarize

The time has come to move from the general expansion discussion of milestones to specific and unique steps on the road to Decentralization. Optimistic Rollup, which became the first to Decentralization its Sequencer and share the revenue, is one of them. The other is a two-tier governance structure that aligns the interests of the Blockchain project’s core team with the interests of the Token holder community.

By following these steps, we can harmoniously lead the seemingly conflicting goals of decentralization and growth. I can’t wait to see other Blockchain projects come up with fresh ideas on their own journeys.

Source: Blockunicorn Original