Metis: An Honest Review🔎

We are diving deep, so that we can give you the full picture of what’s happening with this chain. Here is what we’re covering:

So why are we diving into the Metis Protocol?

Because there is a lot of noise and excitement around this protocol, as well as an influx of builders joining, including our very own Quantic. 

There are already 560,446 wallet addresses on Metis, $625ml in value locked and a total of over 12ml transactions. You can see from those numbers why this protocol is significant. 

Now you might be wondering What is Metis?

It’s Layer 2 scaling protocol for Ethereum applications and DApp developers. It focuses on providing faster and cheaper transactions, resulting in faster development of the Web 3.0 ecosystem and solutions. Cheap, fast, sounds amazing so fa right?

Let’s keep digging. 

What else are they trying to achieve?

Metis offers several products for developers, DAOs, and people, including a wide range of Ethereum blockchain solutions from NFT bridge and the testnet to the Graph and Metis Node all in one platform. Impressive. But that is not all. 

They also have The Metis Virtual Machine (MVM) which  looks, feels, and behaves like Ethereum however it is it is cheaper, faster, and easier to use than Ethereum. 

Another key feature Metis has implemented is Layer 1 and Layer 2 messaging, to easily and securely make connections between L1 and L2. 

Finally, another aim Metis is focused on is the enhancement, the scalability and functionality of DAOs. Let’s take a look under the hood to see if Metis is all it claims to be.

Tech, Use Case and Competitors

Ok, so now we get to the core of why Metis matters, the actual tech use case. This can be split in four key areas:

• Decentralized Autonomous Organizations (DAOs): Metis is focused on enhancing the scalability and functionality of DAOs. It provides a governance and collaboration implementation framework for Distributed Autonomous Companies (DACs), a subclass of DAOs.

• Scalability: Metis addresses the challenges of elevated transaction costs and network congestion on Ethereum by offering faster, cost-effective transactions² . It aggregates multiple transactions into one for efficient processing on Ethereum.

• Data Storage: Unlike conventional Layer 1 solutions where most data is stored on-chain, Metis stores the bulk of its transaction data off-chain, significantly reducing storage costs.

• Developer Support: The Metis protocol enables DApp developers and Web 3.0 enthusiasts to develop on the Ethereum Layer 2 using cutting-edge blockchain tech. 

From a tech perspective, that is impressive. Now let’s explore who they are competing with in the space.

Operating as a layer 2 scaling solution on Ethereum Metis is naturally going to compete with 2 key Layer 2 solutions:

• Arbitrum - Arbitrum is a Layer 2 scaling solution that also uses Optimistic Rollup technology. It currently has a higher Total Value Locked (TVL) compared to Metis.

• Optimism - Optimism is another Layer 2 solution that uses Optimistic Rollup technology like Metis. Metis mirrors the Optimism Virtual Machine (OVM) that it calls the Metis Virtual Machine (MVM).

It’s fair to say that the Layer 2 scaling solutions space is rapidly evolving with many protocols working on innovative solutions. It’s important to note that while these protocols may be competitors, they are all working towards the common goal of improving the scalability and efficiency of the Ethereum network. 

News/Fud:

This is one of our favourite metrics to dig into. If there’s any recent FUD or drama, bet that we will hunt that stuff down.

The results for Metis were overwhelmingly positive with no majorly slanderous or damaging articles, posts or discussions.

The FUD that we did find were the following:

• Some community members were critical of the $100 million developers fund, raising concerns about transparency and the potential for misuse.

• Token faucets are not providing enough liquidity to users and the minimum withdrawal amounts are too high.

We haven’t been able to find any info or data to substantiate these claims, but they are important to consider with ALL projects, not just Metis.

Market Cap/Supply

Ok now let’s look at some important numbers, market cap and supply. 

The market cap of the Metis Protocol is approximately $442,272,749. This is a significant market cap and really shows that Metis is highly valued by the market. 

The circulating supply of the Metis Protocol is approximately 5,265,547 METIS. 

The total supply is 10,000,000 METIS.

What does this actually tell us?

By market cap, Metis is ranked 117 in the list of top tokens. This means that there’s a lot of room to grow.

We can see that about half of the total supply of METIS tokens is currently in circulation. This indicates that the remaining tokens are held by the project team or are reserved for future distribution.

With a large chunk of the supply still not in circulation, this may lead to price dilution over time to offset the MarketCap gap so it’s important to check out what the plan is for unlocks and who’s holding these remaining tokens.

It’s good to note at this stage that these numbers can change as more tokens are minted or burned. Now let’s dive into the tokenomics and check out what’s actually happening with this supply.

Tokenomics / unlocks:

In a nutshell, this looks decent. All of the tokens are unlocked except for 27.7% which are allocated to transaction mining.

This means that these tokens are going straight back to the community, as token rewards for specific types of transactions in the Metis Ecosystem. Which is awesome.

There is a decently sized allocation to insiders, early supporters and the founding team, but two things to note about this:

1. These tokens have been unlocked for a while already, which minimizes any future FUD when it comes to team unlocks.

2. Allocations like this are normal and necessary. Compared to many other projects, this allocation amount is not unreasonable.

The Team

The team is stacked with crypto veterans and Web3 builders. They’ve been through multiple market cycles and have a lot of credibility on their side.

Of note, one of their members, Natalia S., is actually Vitalik Buterin’s mom. If you’ve been living under a rock, Vitalik is the creator of Ethereum and incredible advocate for blockchain tech. Just from a notoriety standpoint alone, this gives a lot of credibility and fuel to the Metis ecosystem.

When it comes to Developers actually doing work on this chain, this incredible graph (complements of Santiment) shows that the team has been hard at work and highly active. All good signs once again.

TVL/Defi metrics

Let’s start by looking at the Total Value Locked (TVL). This metric tells us if people are really using this protocol. It’s the sum of all the liquidity locked into this list of protocols that are on the Metis Chain (there are 36, with the top 3 being AAVE V3, Maia Dao and Netswap).

Metis’s TVL is $67.75 million, which, compared to many of the top chains, is relatively small (graph 1.1), BUT the fact that it is trending up with price is a bullish sign.

We can also see that the amount of stablecoins on the Metis chain is also rising comparatively with the price and TVL (graph 1.2).

This is also a good sign because this shows us that the rise in TVL is not just because the token price is increasing. There are real users of this chain who are investing their liquidity.

Lastly, the inflows (yellow lines on graph 1.2) are net positive, and shows us that liquidity has been moving on chain more than off chain. Another good sign.

Security

Now let’s explore one of the most important aspects of the any protocol, security. 

Metis prides itself in being a secure and robust network. Our research shows some key areas where this narrative is reinforced. 

• Layer 2 Security - Metis uses a Layer 2 solution based on Optimistic Rollups technology, which aggregates multiple transactions into a single one for efficient processing on Ethereum. This not only expedites transactions but also reduces costs by leveraging Ethereum’s robust security and decentralization features. 

• The Metis Bridge - The Metis Bridge is a Natively Verified bridge, which means that it is secured by the native Smart L2 protocol. This means that there are no multisigs or external validators present that could compromise the security of the bridge.

• Decentralized Actors- The entire structure of Metis Smart L2 is designed around several process loops which are designated to mitigate the potential damage and filter the possible malfunctions of decentralized actors and/or other outer ill-wishers

The contracts on the Metis protocol have passed through several audits, providing safe and secure connections from Layer 1 to Layer 2. Here are some of the highlights from those audits from leading blockchain security firms:

• Hacken Audit – Executive summary concluded that the customers smart contracts are well secured. However, because of the audit, security engineers found 1 high and 3 low severity issues. The high severity issue was a “possible rewards lost or receive more”. All issues were fixed by the team. 

• SlowMist Audit – This comprehensive audit gave an overall result of PASS. However, the team found one low risk vulnerability where weak passwords can be used in the keystore, which can be easily cracked. Upon feedback all problems found have been fixed and the risks have been eliminated by Metis.

• Armors Lab Audit – This audit found no vulnerabilities at all, and all key areas passed after comprehensive testing, showing the robustness of the protocol. 

Community/socials

Their X account has a massive following. Verified by X and their repost to reply ratio suggests no botting. Comments are mostly positive and bullish.

Discord and Telegram servers are very active, with frequent updates and announcements by the team. Good to moderate engagement by mods and core builders. Vibes are both positive for the most part as well.

TA/Onchain Analysis

Metis has blown up since it’s launch, and it’s currently range bound between $70 and $100. With Volume declining as price trades sideways, I expect to see a larger spike before breaking out, either up or down.

I’m keeping my eye on the $92.30 level for continuation upwards because this is the level Metis needs to break to make a higher high. The last swing high and low have been lower than the previous, so a change of character needs to precede a push.

Looking on chain, we can see that the total number of Metis holders is rising steadily, and the exchange inflow is dropping, suggesting that holders are indeed holding, instead of taking profits. Both good signs for future growth.

Plans and Roadmap

The Metis Protocol has outlined several key ambitious plans for its future development. Here is a breakdown on their key plans and some elements of their roadmap. 

• Ecosystem Development Fund: The MetisDAO Foundation, which maintains Metis, has created the Metis Ecosystem Development Fund (Metis EDF). This fund will allocate 4.6 million METIS tokens to bootstrap development, liquidity, activity, and adoption in the Metis ecosystem.

• Decentralized Sequencer: Metis plans to become the first optimistic rollup to decentralize its sequencer, a key component of a Layer-2 network that bundles up transactions from users and passes them along to the main Ethereum blockchain.

• Community-Driven Fund: The Metis Ecosystem Development Fund (EDF) will progressively evolve into a community-driven fund. It will be managed by the MetisDAO Foundation and Metis token holders, who will decide on grant allocation and project deployment on the Metis network.

• New Ventures: Metis is attracting new ventures to its platform. For example, Daniele Sesta has deployed his newest venture, WAGMI, on the Metis network. 

Although Metis had a clear roadmap for 2023, there is no other clear roadmap for 2024 apart from the elements mentioned above. This could change in the near future by the team. 

Bonus Alpha:

Metis is diving into the Meme Coin world!

There are some heavy hitters working quietly in the shadows, and even though there is a lot of controversy about this topic, we heard directly from the team that this is being handled in a responsible and professional way.

Despite the FUD surrounding meme coins, one thing is certain: they offer massive opportunities to profit for responsible traders. So stay tuned for future announcements and ALWAYS do your DD!

🔊Spaces Alpha

Every Friday at 2 pm EST / 7 pm UTC. 

This week we are diving into everything Doginals.

They have been all over the timeline, and TOC/Victor will be diving into what exactly is going on.

Get ready for the full story and some real alpha.

Check out the link below and set your reminders ✅

Finally, we'll be giving away exclusive thank-you gifts to our early supporters, so be sure to invite your friends to subscribe to Growth Bytes. Link below 👇️ 

http://web3bytes.beehiiv.com/subscribe