What is METIS?
Metis is an Ethereum rollup designed to increase scalability and reduce fees. Metis makes use of several sequencers to pool transactions and send them all back to the Ethereum network. Decentralized Autonomous Companies are the name for these sequencers (DACs). DACs use a Proof-of-Stake (PoS) consensus protocol to transact directly by maintaining nodes and mining METIS tokens.
How is Layer 2 working and how does it solve some of Ethereum’s problems?
The cost of keeping information in smart contracts on Ethereum is high. DApps that use blockchain technology, on the other hand, typically manage part of their data on the blockchain. As a result, poor smart contract creation leads in greater expenses that are passed on to the consumers of each program. This leads to further issues, such as the scalability of existing smart contracts. Layer 2 came to help in this situation.
Layer 2 refers to a collection of solutions that allow you extend your application by managing transactions outside of the Ethereum Public blockchain (layer 1)
Confidentiality, transaction fees, scalability, and functionality are just a few of the advantages and tradeoffs to consider with each option. This, as you may have realized, is also an issue. Some of the compromises are important attributes. Initially, however, there was no clear answer that could fix all of the issues at once. Rollups were one of the solutions.
Rollups do operations on layer 2, which itself is independent of the main Ethereum network (layer 1), although they post transaction records on layer 1. This takes care of our main issue. It lowers users’ gas costs, allows for unrestricted participation, and speeds up process transactions.
Two solutions that were resolved by Layer 2:
- ZK (Zero Knowledge) Rollup
Layer 2 transactions are packaged in ZK rollups, which form a zero-knowledge argument called SNARK (succinct non-interactive argument of knowledge) that verifies authenticity. After that, the validity proof is provided on layer 1.
- Optimistic Rollup
An optimistic rollup performs transactions on layer 2 first, then combines them into a single piece on layer 1, assuming that all supernodes are reliable by definition . By default, it does not do any calculations. Because processing is the slow, expensive element of Ethereum, optimistic rollups can increase scalability by up to 100x, depending on the transaction.
The rollup contains a mechanism known as fraud proofs that ensures payments are not illegal.
What is the role of METIS tokens?
Inside the Metis layer-2 protocol, the Metis token (METIS) fulfills three main functions:
- To launch the Metis Virtual Machine (MVM) and establish a decentralized autonomous firm, a payment is required (DAC)
- When users intend to establish collaborations with others, they must stake collateral in the Meta Staking Contract, which will act as the commitment basis for the Optimistic Governance.
- Any layer-2 operations that utilize the Metis protocol will be using METIS as the gas cost.
For staking and transactions, the Metis token (METIS) acts as the internal currency. Users can use the Metis system to pay for goods and services supplied by Decentralized Autonomous Companies (DACs).
METIS tokens also aid in the reduction of spamming and the building of trust among developers and users. To begin a partnership with others on the network, such as the formation of a DAC, users must wager some METIS. If the cooperation is successful, these tokens will be returned to its original users. Failure to collaborate effectively can result in users losing their investment. Collaborators will be compensated and rewarded for their work in METIS.
To join in the Ranger DAC, users must stake a specific amount of METIS tokens. This DAC’s stakers will be handed a random transaction data from all DACs, as well as the beginning state roots. The state root will be generated and sent to the base layer by these stakers (dubbed “Rangers”). Rangers will be compensated or penalized according on the challenge mechanism, which enables users to dispute the legitimacy of a state root that has been sent to the base layer. As part of this procedure, Rangers will be able to mine METIS.
