Interpreting Metis' Decentralization Sequencer Mining Mechanism: The Beginning of the L2 Native Decentralized Finance Ecosystem?

Original author: Haotian

If Ethereum ecology has entered the Decentralized Finance “old age” of the volume restaking points + lock ETH Liquidity war, Metis uses Decentralization Sequencer to form a linkage with the stake Mining of the @ENKIProtocol LST platform, and has the opportunity to reproduce the growth process of the Decentralized Finance “embryonic stage” on layer 2? Now, here are my thoughts:

1. When restaking platforms on Ethereum appear one after another, ETH native assets will become a source of contention between platforms. Therefore, a large number of platforms exchange the wrapped version of ETH for users’ ETH assets, although the wrapped version of assets can also circulate and operate in the Decentralized Finance system, but users cannot redeem their native ETH assets.

The reason is also simple, imagine if a restaking platform is stored with some LRT credentials of other platforms, and there is no ETH native asset, this LST platform is like a rootless tree. Therefore, of course, we have to try our best to find a way to “hand over” the original ETH assets with “one fish for long”.

Of course, users don’t care about this problem during the Restaking Fomo period, depositing ETH can be exchanged for a wrapped version of ETH (which can be circulated), and they can also get Eigenlayer platform points, LST stake platform points, these are all certificates that can obtain future Airdrop, so why not.

If the assets of these restaking platforms are stacked and combined, and there are no security issues in any of them, there is not much of a problem. As soon as the user settled the account, he handed over the native ETH, but in exchange for the circulating wrapped ETH and the opportunity to airdrop points on longest platforms in the future, it seems to make sense. But all this requires the premise that the restaking portfolio economy around the @eigenlayer will not fail the dam, and if the security problem arises when users want to redeem their native assets and flee, it will be found that it is too late.

Decentralized Finance Ethereum In fact, with the emergence of more and more long Staking+Restaking platforms, the battle to grab ETH native assets has to be started, all of which are grabbing ETH native assets, and there are fewer and fewer ETH circulating in the market, Decentralized Finance the “leverage” of the financial Lego building will be stacked higher and higher, and radically speaking, it can be regarded as a kind of Decentralized Finance new Summer.

However, from another point of view, this is also a typical feature of an ecological “dying old age”. The unleveraged native assets in the market are so long, but to combine a leveraged Empire State Building. As a result, everyone is doing highly leveraged things, and an Eigenlayer revitalizes the Ethereum Decentralized Finance ecosystem, but it’s hard to think about the risks behind this.

2. As a member of the Ethereum layer 2 ecosystem, Metis has made some unusual moves in the past few years:

1. Replace $ETH as the gas token of the layer 2 platform, and use Metis as the utility token of Utiliy at the beginning of the chain, so that $METIS is used as the native Token to build the bottom;

2. As a OP-Rollup, the combined DA paradigm of off-chain Decentralization Storage DA+ key for verifiable data submission to the Ethereum was selected at the beginning, which can greatly drop the gas, and can also flexibly adjust the DA with the enhancement of the Ethereum Blob Expansion short to provide a DA method that is more in line with the market trend, which also provides basic flexibility for the implementation of its Hybrid Rollup;

3. Launch the Decentralization Sequencer system, use native Token to incentivize Decentralization Sequencer Nodes for Mining, and you can have 20% APY income after the official launch. Just like users can get 20% of the income in the Lido stake ETH, the value of the Utility Token will be maximized in this link. Theoretically, the stronger the sustainability of this native mining income, the greater the help for the combined development of the subsequent Decentralized Finance ecosystem. Just imagine, Lido’s current 4% income is still being derived, not to mention the early Metis Decentralized Finance ecosystem that starts with 20%;

4. With the Sequencer Mining incentive at the bottom Decentralization of the native token, LST platforms like @ENKIProtocol @Artemisfinance will long emerge, after all, this Mining income is still quite attractive to some funds who are not willing to risk playing restaking points in the Mainnet;

5. When a large number of LST platforms emerge, LRT platforms will follow, because stake METIS generate eMetis, eMetis can not only mine the points of the LST platform, but also stake to other LRT platforms to further earn income. At the same time, some other Decentralized Finance platforms such as DEX, Derivatives, and CDP will also participate in this continuous overflow of Liquidity relay, and slowly, Ethereum Decentralized Finance the old path of Decentralized Finance farming, Metis can theoretically reproduce it;

In short, when the blossoming of layer 2 everywhere was in a development dilemma, Metis’s original rebellious move of abandoning ETH for Gas Token instead established the foundation for the development of the Decentralized Finance ecosystem, and its choice to implement the underlying Decentralization Sequencer system laid the foundation for the operation of this Decentralized Finance economy.

At present, many Ethereum layer 2 Decentralized Finance development is more fundamental, the core reason is that the second layer does not have the original asset-driven value rise at all, and it is difficult to build a healthy and sustainable rise ecology purely by relying on layer 2 encapsulation ETH Token and governance tokens.

Obviously, Metis’s market capitalization in layer 2 is still a small baby compared to those tens of billions of valuation layers 2 born with golden spoons. However, if everyone agrees with this paradigm based on the native Utility Token to drive the rise of the Decentralization economy, at least compared to other layer 2s, Metis is obviously the most thorough and most likely to grow in terms of rise possibilities for the Decentralized Finance ecosystem in the future.