If the Lending platform of the POW public chain is the foundation of the ecosystem, then the LSD protocol of the POS public chain must hold the lifeline of the ecological development.
Recently, while the @MetisL2 decentralized sequencer process is still in full swing, it has also begun to spare no effort to support the development of LSD protocols such as @ENKIProtocol. The fundamental logic is here. There is no doubt that LSD will be the foundation for the Metis ecosystem to rise from the ground. Next, let me talk about my opinion:
1) The LSD (Liquid Staking Derivatives) protocol aims to allow ecosystem users to pledge native platform tokens to POS mining nodes, thereby promoting the security and stable operation of the public chain platform. This is equivalent to the LSD protocol raising tokens from users to support the normal operation of nodes, and also allows users to participate in the POS mining reward process.
The basic threshold for building a decentralized sequencer node in Metis is 20,000 $METIS, which is a huge cost for node operators. If the LSD protocol first raises METIS assets and then allocates the corresponding pledged token quota to the sequencer miner, it can not only lower the threshold for nodes to participate in decentralized sequencer mining, but also provide native staking income to users who pledge METIS.
In the long run, a positive incentive flywheel for Sequencer Miner and LSD Staking will be formed: users pledge METIS to LSD - lower the threshold for decentralized sequencers - more sequencers participate in mining - token pledge rate increases, chain security consensus becomes stronger - drives token asset prices up - users want to pledge more to participate in LSD. To some extent, the development of the LSD protocol is to further consolidate the decentralized sequencer mining system.
Of course, LSD's participation in Sequencer Miner will have corresponding quota restrictions to ensure the balance of comprehensive capabilities such as node technology, operations, and markets, and avoid excessive concentration of resources, which violates the fundamental essence of a decentralized Sequencer.
In essence, this is similar to the logic of the POW public chain developing a lending platform. Miners can lend their mining income assets to the lending platform to obtain stablecoins to pay for the electricity bills required for mining, realizing a derivative financial gameplay that allows normal mining to cover costs without selling assets.
2) Metis is a layer2 platform with METIS as its native token, and Enki Protocol is positioned as the first LSD protocol on the Metis platform. The native layer2 token + native Layer2 LSD aims to bring a real source of liquidity staking income to the layer2 platform? Why do you say that?
In the TVL impact war launched by @Blast_L2, Blast promised to give users not only points in exchange for tokens, but the biggest highlight is that Blast can stake the users' pledged ETH to layer1's LSD protocol to obtain income to empower the layer2 ecosystem.
In this scenario, layer2 absorbs the native tokens from layer1 across the chain, and then the platform operator of layer2 takes them to layer1 for pledge management to obtain returns. This inevitably makes people confused. What is the meaning of the existence of layer2?
If the LSD protocol on layer2 can directly take over the possibility of obtaining stable returns from native assets on layer2, layer2 platforms like Metis will not only have the ability to generate revenue, but also, as layer2 platforms can interoperate with each other, more liquidity from layer2 platforms will flow in. Wouldn't it be more logical for Enki to launch a TVL points reward mechanism similar to Blast?
If Blast returns the user's staked ETH to the main network to participate in Lido's staking, it is a unified asset management behavior of "institutions", and users cannot choose the final destination of the assets. When the feasibility of layer2 LSD protocol staking is implemented, there will be a large number of "retail investors" from various layer2 platforms to cross layer2 to do liquidity overflow management, and its future imagination space cannot be underestimated.
3) In order to stimulate the development of LSD protocols in the Metis ecosystem, Metis launched Metis Liquid Staking Blitz (LSB) to accelerate the growth plans of many LSD protocols. In addition to Enki Protocol, this will continue to attract the rapid rise of LSD protocols including Artemis, and there will be more and more LSD on Metis. Following the development paradigm of Ethereum, after LSD, the Restaking mechanism is bound to appear at some point in time, further driving the refined management and implementation of layer2 liquidity.
On Ethereum, the emergence of staking protocols such as LIDO, RockX, and SSV has raised the staking rate of ETH on layer1 to 38%. On Metis, how much room for imagination will LSD protocols such as Enki Protocol bring to Metis?
Of course, the goal of Staking + Restaking is to lock in greater liquidity. The advantages of Metis are:
1. The two-way demand positive flywheel of Sequencer Miner + LSD protocol will form the mature fundamentals of Staking on Metis, just like the fundamentals of Eigenlayer are actually delivering the security consensus capabilities of the Ethereum mainnet to the emerging layer2 chain. The value of Staking must eventually be implemented to be stable enough;
2. Metis has built a decentralized economy dedicated to METIS native tokens, which is different from other traditional layer2 models that use tokens as governance tokens, and is continuously exerting its self-sustaining ability in the process of building an ecosystem. If the layer2 token only stays in the stage of attracting new users and governance, its purely incentive Tokenomics will hardly effectively empower token holders.
that's all
At this point, everyone should have realized that Metisâs move to be the first to develop layer2 native LSD Staking and future ReStaking platforms actually has hidden ambitions.
While many layer2s are opening up and sharing "modular" technology components and expanding their territory with Rollup As A Service, Metis has built a set of ecological liquidity sharing components of Rollup Ecosystem As A Service, attempting to deliver a decentralized economy of native token + native LSD as a "modular" commodity.
Note: Keep a close eye on the development of Metis' LSD protocol ecosystem, which is the cornerstone for the subsequent growth of the Metis ecosystem and the key to determining whether#METISwill usher in a second wave of value growth.