For Ethereum to scale, it needs support from Layer-2 platforms. Among them, Metis is one of the hottest at the moment.
In this article, I will dive deep into the ecosystem of Metis, and provide information on:
- What is Metis?
- What does its ecosystem look like?
- Which stage is the Metis ecosystem at?
- Assessment and Prediction on the Metis ecosystem.
Let’s get right into it!
What is Metis?
Metis is an Ethereum Layer-2 using the Optimistic Rollup technology. Metis attempts to scale Ethereum by improving its infrastructure (transaction cost, transaction speed, storage) while still remaining decentralized and secure.
Moreover, Metis also provides numerous unique features that no other Layer-2s are doing at the moment, namely:
- NFT File Storage: IPFS (InterPlanetary File System) is a public network used for storing and accessing files, websites, applications, and data on-chain. Users can mint NFT on Metis for lower fees and faster speed, and bridge back to Ethereum within a few hours.
- DAC (Decentralized Autonomous Company): DAC is believed to be the evolution of DAO (Decentralized Autonomous Organization) by covering the full functionality of a complete business, beyond simply governance and voting. Metis aims to transfer Web 2.0 to Web 3.0 in the best way possible.
- Polis Middleware: Polis is a platform to manage smart contracts, offering management, maintenance, and interaction. For end-users, Polis will look just like a web wallet.
- Builder Mining: 50% of the $METIS tokens are reserved for project builders and DAC members.
- Genesi DAC: Metis grows its Web 3.0 economy ecosystem by incentivizing Metis projects with $100 M.
Metis Token (METIS) Key Metrics
- Name: Metis.
- Ticker: METIS.
- Token standard: ERC-20.
- Token type: Utility, governance.
- Max supply: 10,000,000 METIS.
- Circulating Supply: 3,005,277 METIS.
- Contract address: 0x9e32b13ce7f2e80a01932b42553652e053d6ed8e.
- Market Cap: $440,567,426.
- FDV (Fully Diluted Valuation): $1,465,979,110.
Metis Blockchain statistics
- Total Transactions: 1,715,773.
- Number of Wallet Addresses: 63,360.
- On-chain Metis holders: 35,971.
Metis History & Roadmap
Metis is a rather new blockchain platform, so it has a pretty short timeline:
- Alpha Testnet (April 2021): Metis was released in Alpha Testnet. It also deployed a demo app called “Prologue” to showcase the speed and low cost of its roll-up design.
- Beta Testnet (June 2021): Users and developers could deploy smart contracts on Metis' MVM (an EVM-compatible virtual machine).
- Middleware Release (June 2021): Middleware and Gamma testnet release offered new APIs/templates to help developers build dApps on Metis.
- Mainnet Launch (September 2021): Metis was officially released. A smart contract library and a smart contract marketplace were created so that developers can deploy new contracts easily.
Metis Ecosystem Overview
Even though Metis has only got into the game for a few months, it has had a pretty vivid ecosystem. You can see that in the picture above. Now I’ll go into each and every DeFi sector within the Metis ecosystem, along with my own valuation and assessments.
The existing DEXs on Metis are:
- Netswap: The biggest AMM DEX on Metis at the moment, currently having $107M in TVL. The average trading volume (per 24h) lies between $4 - 6M, a smaller number compared to that a month ago. This shows that Netswap has been getting less attractive over time.
- Tethys Finance: The 2nd biggest AMM on Metis. Even though Netswap used to dominate this niche, Tethys Finance is slowly catching up with $67M in TVL at the moment. Tethys is gathering more trading volume than Netswap, indicating that it may surpass the current top AMM on Metis in the near future.
- Standard: An insignificant DEX with only $700K in TVL.
- Hermes Protocol: A fork of Solidly. It could skyrocket quickly for a while but couldn’t maintain the hype. As a result, the attraction of the project is gradually decreasing.
⇒ Overview: AMM DEX is the most important sector of every DeFi ecosystem, as it is the backbone of liquidity. That is why AMMs on Metis are incentivizing users with rewards and high yields to attract more liquidity into the ecosystem.
However, the yields and farming pairs are not attractive enough. Although Metis was able to draw a small amount of cash flow into the ecosystem, the period didn’t last long, and people are losing interest after the rewards came down.
AMM DEX is still a competitive niche here, and there is plenty of room for improvement. No clear winner has been defined.
Agora is currently the one and only lending market on Metis, with $74M in TVL. There are only 9 assets being supported by the project, up to date.
⇒ Overview: Lending is the second most important sector of a DeFi ecosystem, as it does not only provide more liquidity to the platform but also allow users to leverage their capital.
However, as you can see, this niche has not been yet developed on Mentis. Since the amount of liquidity within the ecosystem is still fragile, there exists no capital for users to leverage on.
This situation is clearly shown via the market statistics on Agora: Although $129M has been supplied, only $54.9M has been borrowed. It indicates that most users only want to lend assets to earn yields, rather than to borrow and leverage their capital.
The supply of Stablecoins on Metis is:
- USDC (Wrapped): $168.1M
- USDT (Wrapped): $77.5M
- DAI: $7.7M
The amount of Stablecoins here is still insignificantly small. Moreover, primary Stablecoins like USDT and USDC are only being wrapped (bridged) from other platforms and are not directly supported by their issuer.
This means Metis is not being noticed by big players in crypto, and most participants within the platforms are retail investors from other ecosystems coming to seek high yields. With this amount of Stablecoins, Metis cannot grow more strongly.
The Infrastructure landscape on Metis can be seen as:
- Oracle: Metis is supported by Oracle projects like Chainlink, Band Protocol, DIA,...
- Bridge: Some bridges connected to Metis are Multichain, Celer, BoringDAO, Relay Chain,... By being supported by numerous bridges, Metis can receive the cash flow more easily.
- Explorer: You can check statistics like transactions, wallet addresses, tokens,... on Metis using its explorer, which can be accessed here.
- Wallet: Users can participate in the network using wallets such as Metamask, Trustee. Metis needs to integrate with more wallets to improve users’ experience.
⇒ Overview: Metis is now supported by a variety of infrastructure protocols. Nevertheless, compared to other platforms, Metis is yet to be widely supported by big names in the space. Although users are now able to get involved in Metis, the experience may not be the best and most comfortable.
Yield Aggregators are projects that apply multiple strategies (often be compounding) to increase farming yields.
The leading protocol in this field is currently Starstream with $145M in TVL, besides Beefy Finance ($17M) and Pickle ($200K).
Starstream could attract that much TVL due to its 3 stable pairs, with pretty decent yields. Retail investors who want to ape in Metis without having to bear too much risk can provide liquidity and farm in these pools.
Some other DeFi stacks on Metis are:
- OHM forks: Zeus Project, AndromeDAO, BinaryDAO,
- Memecoins: Metis Shiba Inu, MDoge, Caribbean Inu, Meti Inu, Metis Shiba,...
- NFT collectibles: Metis Fam NFT, StarLedger, GreekPunk,...
Overall assessment and predictions on Metis ecosystem
Metis is clearly still at its early development stages when trying to attract more users and liquidity into the ecosystem via incentives. This can be done simply through AMM DEXs and Lending markets, which explains why they are currently the two most developed sectors on Metis.
Some essential infrastructure pieces have been integrated into Metis. However, to improve users’ experience, more partnerships need to be carried out. As an Ethereum Layer-2, this can be done pretty easily, which is expected to happen in the near future.
For the time being, Metis needs more attractive reasons for users and cash flow to come in. Current incentives are not enough, as they are not significantly high and worth users’ migration from other ecosystems. These reasons can be:
- Experience: Cheap, fast, user-friendly.
- Rewarding: High yields.
- Innovative: New DeFi innovations, money games.
After Metis improves 1 among those 3, they can build a deeper liquidity layer and start developing higher DeFi stacks afterwards (Yield Optimizers, DEX Aggregators, GameFi, Derivatives,...).
To conclude, here are some main points:
- Metis is an Ethereum Layer-2 using the Optimistic Rollup technology that attempts to scale Ethereum.
- Metis also provides numerous unique features like DAC Framework, Polis Middleware,... to build towards the Web 3.0 vision.
- However, its DeFi ecosystem is still at early stages and needs more development. Liquidity is of the foremost importance to Metis at the moment.
You’ve been through an article about the Metis ecosystem. I hope it has helped you in gaining more valuable insights into this blockchain ecosystem and understanding its potential.