Cost and TPS speed have been one of the most crippling infrastructural problems for blockchain mass adoption. As many waited for the ETH 2.0 Merge (still waiting), we saw the rise of many layer 1 competitors. In addition, we saw the creation of many layer 2 solutions with state channels, plasma, and rollups being the three distinct types. Now with the ETH 2.0 Merge right around the corner, many would have you believe that cash flows and interest move back to ETH post Merge. Therefore, making many of these layer 1 competitors and layer 2 solutions obsolete. However, I strongly disagree with this view. Although I do believe the ETH merge is a strong catalyst in the reignition of ETH dominance, I don't think that it makes everything else obsolete.
On the contrary, I believe it makes layer 2 solutions far more important for mass adoption. My reasoning for this conclusion comes from my belief that mass adoption will not come from a one size fits all network but will come from networks specialized in certain sectors of the industry.
Human psychology is innately afraid of change and unfamiliarity, as humans we need a good reason to get out of our comfort zone. This is exactly the challenge blockchain mass adoption currently faces, we haven’t given people a good enough reason to make that leap of faith.
We need more specialization and less tribalism among networks. This is where Metis DAO comes in with its vision of accelerating the transition of people to blockchain for open, fair, and decentralized business on Web 3.0. Metis is focused on specializing its network to become the hub for blockchain business and in the process revolutionizing the way we do business.
What is Metis DAO and The METIS Token?
Metis is a hard fork of Optimism and utilizes the Optimistic Rollup framework. At the base level, Metis is an EVM-compatible Layer 2 scaling solution built on top of Ethereum that allows for cheaper (cheapest relative to other L2s at 0.02 cents per tx) and faster transactions. In addition, given that Metis is built on top of Ethereum, it inherits the security and decentralization of Ethereum. On a broader spectrum, Metis is its own complete blockchain ecosystem that gives users the unique ability to create decentralized autonomous companies (DACs).
It's not only fast, secure, and cheap but it's also very interpolable with no code middleware like Polis allowing for easy web 2.0 portability. In addition, to these differentiating factors, it also plans to differentiate itself by providing native data storage (IPFS integration), faster withdrawals to Ethereum (Arbitrum & Optimism take 7 days), and improving usability for developers and users alike.
Down the rabbit hole, we go…
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Metis Virtual Machine
Before I get into the functionality of Metis, I'll briefly give a quick summary of how rollups work. Rollups move computation and state storage off-chain but keep some data per transaction on-chain. What this does is it takes the load off of the main chain (Ethereum) and then does the computation natively to later submit the state changes or transactions back to the main chain. This is very oversimplified as there are many ways in which this data/state change is updated and then again validated.
With optimistic rollups, validation and state changes are approved through fraud proofs. Fraud proofs work by having the rollup contract keep track of the entire history of the state roots (including people's balances, contract code, etc…) and the hash of each batch (a collection of transactions). Hashing is a topic for another time but essentially hashing allows for the compression of large amounts of data into smaller more manageable pieces. When a batch and its hash are submitted, the roll-up contract checks the hashes batch to the existing hash which is stored by the roll-up contract. If the existing hash and new hash batches are different then the contract reverifies the batch and reverts all batches after it. This is done because if the existing hash batch and new hash batch are different it is proof that fraud has been committed. Optimistic rollups are given their name because of the bare minimum of information and no proof needed to publish transactions thus optimistically assuming that the people will submit transactions without committing fraud. Consequently, meaning proof is only provided in the event of checking if fraud has occurred.
Now hopefully you learned something and I didn't lose you. Back to Metis…
As mentioned above, Metis is a fork of optimism and as such it uses Optimism’s Optimism Virtual Machine (OVM). However, Metis uses a variation of this and calls it the Metis Virtual Machine. The MVM mirrors the OVM in its function and code execution. Where it differs, is in its sequencing ability. The way optimistic rollups generally work is that they batch and order transactions through a sequencer before submitting final state changes to Ethereum. The problem with this design is the issue of bottlenecking efficiency because of the need to push transactions through a single centralized sequencer. The MVM solves this problem by having multiple sequencers that are pooled onto on-chain entities A.K.A DACs to process transactions. This ability to have multiple sequencers makes Metis more scalable, efficient and decentralized than a lot of other layer 2 solutions on the market.
Each time a Metis block is minted a random sequencer is chosen to process any state changes that are made on the Ethereum network. In order to be a validator on the network and process these transactions, a validator must have Metis staked. In addition, to process certain transactions validators must have a greater amount of Metis staked than the total sum of balances that they are processing. You can't have 1,000$ of Metis staked and try to validate a transaction of 10,000$. This ensures that if a validator were to incorrectly validate a transaction he would be punished and have his staked Metis seized which comes at a greater cost than erroneously validating the transaction.
On top of this, users can also participate as “Rangers'' who act as auditors to ensure that no fraud has taken place and are rewarded for correctly identifying fraudulent sequencer activity. Rangers get their reward from the same sequencer which they fraud proofed. Here is a visual of all the working pieces:
At this point, it should be clear why Metis is leagues above other, layer 2 solutions currently on the market, it is more scalable, efficient, and decentralized. In addition, Metis is also tech agnostic, meaning that Metis has the ability to switch over to a better solution if one were to come along. As quoted directly from the team “We are not married to any one tech”. If that better solution ends up being zero-knowledge rollups, Metis is ZK rollup enabled and ready to transition.
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Back to the article…
Future of Blockchain Business: DACs
Now that we know Metis is one of the best, if not the best layer 2 solutions currently functioning, let us return to the idea of specialization. What really differentiates Metis from other layer 2 solutions aside from the technology, is the ability to create DACs (Decentralized Autonomous Companies).
DACs are key to Metis’ future dominance of on-chain business/blockchain business. DACs are an evolution of the DAO (Decentralized Autonomous Organizations). DAOs have allowed people to work in a collaborative manner anonymously, transparently, and without a need for a centralized authority figure.
However, DAOs face many limitations and problems and aren't quite the most effective solution for conducting blockchain business. Whether that's too many conflicting interests by community members, legal battles, inefficiency in proposals, etc… The main issue with DAOs is the paradox of the inability/limitations to conducting real-world business given the anonymity and lack of authority figures. DACs allow for a centralized/privatized company giving the user the ability to gain the best of both the real world and the blockchain world.
The DACs serve as the in-between and act as a marriage between the web 2 and 3 worlds. Fun fact, the idea of the DAC was first proposed in 2014 by Vitalik but no one ever took the initiative until Metis did it. DACs are designed to function as fully operational companies with business-related tasks like payrolls, marketing, messaging, insurance, and all the other functionalities of a real-world company.
Each DAC also has the ability to assign special permissions or role delegation to different people, allowing everyone to have a different impact on business decisions. In addition, every DAC runs its own MVM with its own personal built-in storage layer Interplanetary File Service (IPFS). With this IPFS integration and storing data this way, it allows data to be encrypted within the Metis protocol. This allows users to store confidential information. In addition, the IPFS Resolver enables Metis applications to access and link directly to stored data.
Another key feature of Metis is Polis - no code middleware that allows for easy code portability from Web 2 to Web 3 making transitioning easier for developers.
The Metis team intends for Polis to help bridge the gap from Web2 to Web3 by giving developers templates for deploying and managing new applications. The combination of low fees and a low development learning curve is what is going to make Metis the hub for blockchain business.
The only issue I currently see with Metis is the issue of the different virtual machine that is used as opposed to the standard VM. This may be a barrier to entry given that developers must learn a different set of tools/coding languages in order to work with the Metis ecosystem.
I will be covering DACs & Polis in more detail in a subsequent article as I feel they deserve their own piece given that this is their specialization. And also because this was the team's response when asked what their goal/vision was.
“We’re in the blockchain business. We’re not trying to be the best L2. What we're trying to do is breed collaboration focused on the building of DACs.” - Metis Team
The Metis team is led by co-founder and CEO Elena Sinelnikova. Elena previously co-founded Cryptochicks, a non-profit organization educating women on blockchain technology and other emerging technologies. Elena has years of blockchain experience and is a well-respected blockchain educator in the community. Additionally, co-founder Kevin Liu has years of crypto experience having worked for multiple years as a business developer and investment manager. Lastly, co-founder Yuan Su has 10+ years of software engineering previously working at IBM.
If you thought the team was good already, just wait till I tell you that they even have Vitalik Buterin’s (co-founder of Ethereum) mom (Natalia Ameline) on the team. Natalia is a very distinguished woman in her own right. Most notably, she also helped co-found Cryptochicks and holds a Master’s degree in Computer Science and Business Administration as well as a CPA/CMA accounting designation. Natalia has been in the space since 2014 and is great friends with Elena.
Ecosystem Fund: Genesi DAC
Metis has allocated 100 Million dollars to the Genesi DAC led by Natalia Ameline. These funds are used to support the ecosystem by investing in projects and developers to build on the platform. This fund will be making a transition to be fully on the blockchain in the future. Together, Metis and Genesi DAC help launch and scale onboarded projects with high potential in building Web3. I’m very excited to see what comes out of this fund and also very curious to see what Natalia decides to fund.
For more information on the Genesi DAC & how to apply click here.
Tokenomics & Vesting Schedule
The METIS token’s Initial Dex Offering (IDO) was on PAID Network and had its Initial Exchange Offering (IEO) with Gate.io both occurred on May 12, 2021. 30,000 tokens were offered at a price of 5$ each, raising a total of 150,000$. Here is a graphic breaking all token allocation percentages:
Here is another graphic breaking down the emission schedule:
And this last one breaks down the vesting schedule:
There isn't much need for me to break anything down here since these graphics are pretty straightforward. However, I will say these tokenomics are very strong and I would like to highlight a few points.
First is that the team has only taken a 7% allocation which is super low and is always something I like to see. To me, this means the team really banks on their ability to market their product well and continue to develop their project. Secondly, early investors control 15.5% of the supply, however; most of these tokens have already been distributed. This means there aren't going to be any more serious unlocks.
Seed investors are all that is left but they have only 1% of the total supply with half already distributed to them. This is extremely bullish given that you don't have to worry about getting dumped on by VCs. Lastly, all remaining emissions are going to be more or less organic for the coming months and years so token inflation shouldn't be much of an issue.
Important to note that token inflation isn't necessarily a bad thing if you can properly grow and bootstrap the ecosystem. This token inflation will serve as an economic incentive along with the other developer accessibility incentives to create a sticky ecosystem.
- Transaction Fees - transactions on the network are paid with Metis
- Liquidity Mining Incentives - Rangers and Sequencer pools are awarded Metis for contributing to fraud-proofing systems efficiency.
- Staking for DAC- DAC contributors must stake their Metis to become sequencers, launch a new MVM layer and collaborate.
Metis DAO 2nd Half Year Roadmap
The vision of MetisDAO Foundation remains the same and they are determined to build a robust infrastructure to backbone and power the Web3 economy. Metis’ roadmap for the 2nd half of the year is absolutely insane. There is so much that they plan to do. In order to keep this piece as short as possible, I will be highlighting some of the key points. The Metis team plans to continue to innovate and improve their layer 2 solution. In addition, the Metis team plans to experiment with different governance models to find the best way to make the Metis ecosystem fully decentralized. They will be implementing the use of Commons and Eco Nodes. Commons gives members of the community the ability to make a DAC by staking their Metis and contributing to the ecosystem in a variety of ways such as making proposals. Common proposals may be supported by the community meaning that small investors may have the ability to fight against the wishes of whales if they garner enough support.
Eco nodes are the evolution of commons and entail another very exciting idea. The idea of a Reputation Power System (RPS) allows users to demonstrate each member’s credibility, trustworthiness, level of engagement across multiple chains/ecosystems, and their social contribution to specific areas. Essentially, this RPS gives users a virtual credit score. I'm super fascinated by this idea and will be covering it in depth in subsequent articles. Voting power in the Metis system will be decided by the RP of the DAC in question. If commons continue to contribute meaningfully and faithfully to the ecosystem their voting power is increased and they become Eco nodes. In addition, the Metis team will continue to improve Polis by adding more no-code templates and making it more developer friendly.
Lastly, DACs will see a makeover adding more functionality, use cases, and overall better user experience. Overall, the team plans to continue shipping and building. Come bear or bull market, Metis is here to stay.
Look out for follow-up articles in which I will be going in-depth detailing specific areas of the Metis ecosystem such as DAC’s , Reputation Power, layer 2 solutions comparisons, and more.
Finally, this went live a few hours ago and the impact this will have on the Metis ecosystem as a whole cannot be understated. Expect to see the big dogs roll up (no pun intended) on the Metis eco very soon now Chainlink has integrated price feeds.
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