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What is Metis?
Metis is an L2 scaling solution on Ethereum that's best described as an EVM-equivalent, sharded Optimistic Validium featuring a Dynamic Bond Threshold staking design. Metis began as a “regular” Optimistic rollup (OR) but later transitioned to the validium model in April 2022, in which it no longer posts calldata to the Ethereum L1 but rather to a different DA layer. Recall, posting calldata is essential so that independent validators on the L1 can verify the validity of the data (state root) coming from the L2.
The METIS token is used to pay transaction fees on the rollup, stake to become a sequencer, and for fraud challenge incentives.
Pros
- Parallel sequencers
- No-code integration via a middleware layer powered by smart contract templates
- DAC (Decentralized autonomous company) infrastructure enables both blockchain and Web2.0 companies to build decentralized businesses on-chain while enjoying the decentralization and security of Ethereum
- Withdrawal period could (theoretically) take minutes (rather than days)
- Plans to inherit Optimism’s EVM Equivalence
Resources
Fees paid to L1
Metis Technology
Metis’ transition to an optimistic validium has made it one of the cheapest L2 options currently live but at the expense of security. The availability of data is necessary for generating fraud proofs and effectively resolving disputes in an OR. If a dispute is filed and data for the contested state transition is missing, the fraud proof cannot substantiate fraud. Therefore, if the Metis' off-chain data availability (DA) supplier fails to provide the data, funds can be stolen from an optimistic validium.
What is a Validium?
Validium’s mechanism is nearly identical to a ZK-rollup, with the only difference being data availability in a ZK-rollup is on-chain, while Validium keeps it off-chain. This means ZK-rollups post data on the L1 blockchain itself while Validiums post proofs on-chain, but the data remain on a separate network.
This benefit enables Validium to achieve considerably higher throughput than traditional rollups. By sending data off-chain rather than on-chain, it further reduces the cost of each transaction and increases the transactions per second (TPS). Validiums are the cheapest on a per transaction basis in this spectrum.
Accessing the latest state in a Validium requires that off-chain data be available. This is fine except in cases where the data provider misbehaves or goes offline. As a result, there's no DA guarantee and security is lower. Current Validium designs, like Metis, use a Data Availability Committee (DAC) rather than a single provider due to these security concerns.
By keeping data off-chain, Validiums also offer privacy benefits as users’ transaction and balance information is stored with the Validium operator instead of publicly on the blockchain. However, because transaction data isn’t published on-chain, users are forced to trust an operator to make the data available when needed. This key difference makes Validiums more akin to a highly performant, custodial PoA system where Validium operators could freeze, but not steal, users' funds.
Metis’ Off-chain Data Availability Layer
Like all rollups, Metis still features a sequencer that will receive the most recent transactions, batch them together (“roll them up”), and construct the necessary transaction data to facilitate fraud detection. The sequencer will then build a Merkle tree root from the transaction data compilation. However, then, the sequencer will then generate an identifier or “identity tag” on the Merkle tree root, which will be used to send the data to an off-chain decentralized storage environment called Memolabs. As part of the rollup, once the data is accessible in Memolabs, the Merkle tree node is uploaded to the Ethereum mainnet. Thus, the rollup of transaction data for the batch is complete.
DACs and The Metis Virtual Machine (MVM)
The trade-off for storing data off-chain is that it requires trust in the third party which could prevent users from accessing their balances. Starkware aims to solve this with a Data Availability Committee (DAC), which in this case would include a committee of eight independent members that have their own copy of the transactions made.
In the case of this DAC, it can be thought of as Validium functioning with multiple nodes. Nodes, or members of DACs, are trusted parties that keep copies of data off-chain and port them back into the public in case any operators act maliciously. The nodes, however, made an on-chain attestation that the data of the L2 is available by posting signatures on-chain.
The committee members are also required to maintain this data by making it available at all times. If an operator prevents a user from accessing their funds, a committee member can override them to confirm their request if it’s valid. This has some security implications—a permissioned committee requires the end user to trust this fixed group of actors to store transaction data. If a threshold of committee members were to act maliciously, they could freeze (in the case of a ZK-rollup), or steal (in the case of an OR) all of the funds on the chain and kill the liveness of the chain.
The Metis Virtual Machine (MVM) contains various decentralized autonomous companies (DACs) with their own separate, application-specific computational and storage layers. A DAC can be compared to a DAO, or decentralized autonomous organization, in which no single entity or person is in charge of the decision-making process.
However, DAOs only deal within the realm of voting and governance, so they’re limited in that they lack the crucial corporate capabilities to support businesses. On the other hand, DACs function like DAOs, but with the additional ability to scale horizontally with integrated features such as HR, payroll, CRM, marketing campaigns, corporate management systems, and more.
These DACs in the MVM allow for richer interactions and a higher level of being able to onboard fully functional companies onto the blockchain, which offers infrastructure support comparable to that of Web 2.0 companies, while still remaining decentralized. Nodes of DACs act as trusted parties that keep copies of data off-chain, but if rollup operators act maliciously, they can port it back on-chain. These nodes make an on-chain attestation that the data of the L2 is available by posting signatures on-chain.
The costs to operate DACs are low, and their committees are typically made up of 7-10 members. The costs remain especially low since no transaction data is actively posted on-chain outside of DA attestations, so regardless of the transaction volume, cost remains low and fixed.
However, there are some security tradeoffs for DACs. This is because a small, permissionless committee that may not be credibly neutral still requires end users to trust the group of actors to store transaction data. If a threshold of committee members act maliciously, they could freeze (in the case of a ZK-rollup) or steal (in the case of an OR) all funds on the chain and kill the chain’s liveness, posing a large risk.
Source: Metis
Additionally, a network of sequencers is randomly selected from the DACs to rollup and submit transactions back to the L1. These parallel sequencers enable higher scalability compared to the single-party approach by other ORs.
Metis Features and Advantages
The MVM used to be EMV-compatible but has since been re-engineered to be EVM-equivalent after its Andromeda update in November 2021.
Through its Polis middleware layer, Metis enables dApps to easily migrate their product from L1 to L2. The combination of low fees and a low learning curve for software development can foster an atmosphere conducive to experimentation and creativity, which are essential for establishing a new application ecosystem.
The Metis team announced in H2 2022 the introduction of Chainlink's price feeds, allowing for several major DeFi protocols to be built on it. The team has also implemented a native storage solution, resulting in cheaper transaction fees and making Metis the cheapest L2 to use.
