Why is the LSD protocol the foundation for the ecological development of Metis layer2?

 Author: Hao Tian; Source: Chain View

If we talk about the Lending platform of the POW public chain If it is the foundation of the ecosystem, then the LSD protocol of the POS public chain must control the lifeblood of ecological development.

Recently, while the @MetisL2 decentralized Sequencer process is still in full swing, it has begun to spare no effort to support the development of LSD protocols such as @ENKIProtocol. This is the fundamental logic. There is no doubt that LSD will be the foundation for the Metis Ecosystem to build 10,000-meter-high buildings. Next, let me talk about my views:

1) LSD (Liquid Staking Derivatives) protocol, which aims to allow ecological users to pledge native platform tokens to POS mining nodes , thereby promoting the safe and stable operation of the public chain platform. It 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.

To build a decentralized Sequencer node on Metis, the basic threshold is 20,000 $METIS, which is very costly for node operators. If LSD The protocol first raises METIS assets and then gives the corresponding pledged token quota to Sequencer Miner. It can not only lower the threshold for nodes to participate in decentralized Sequencer mining, but also provide native staking benefits to users who pledge METIS.

If things go on like this, a positive incentive flywheel for Sequencer Miner and LSD Staking will be formed: users pledge METIS to LSD - lowering the threshold for decentralized Sequencer - more Sequencer participates in mining - the Token pledge rate increases, and the chain security consensus becomes stronger - driving the price of Token assets to rise - users want to pledge more to participate in LSD. To some extent, the LSD protocol was developed 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 node technology, operations, market and other comprehensive capabilities, and to avoid excessive concentration of resources and violation of Understand the fundamentals of decentralized Sequencer.

Essentially, this is similar to the logic of the POW public chain developing the Lending platform. Miners can lend their mining income assets to the lending platform to obtain stable coins to pay for mining. The required electricity fee realizes the derivative financial method of mining Cover cost normally without selling assets.

2) Metis is a layer2 platform that uses METIS as the native Token. Enki Protocol is positioned as the first LSD protocol on the Metis platform, 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 previous TVL impact war launched by @Blast_L2 , Blast promised users that in addition to points exchanged for Tokens, the biggest attraction is that Blast can pledge users ETH is pledged to layer1's LSD protocol to obtain income to empower the layer2 ecosystem.

In this scenario, layer2 absorbs the native token from layer1 across the chain, and then the platform operation and maintenance party of layer2 uses it to layer1 for pledge financial management to obtain income. This makes people inevitably confused. What is the meaning of layer2?

If the LSD protocol on layer2 can directly undertake the possibility of obtaining stable returns from native assets on layer2, layer2 platforms like Metis will not only have hematopoietic capabilities, And with the interoperability between layer2, more liquidity of layer2 platform will flow in. Wouldn't it be more logical for Enki to launch a TVL points reward mechanism similar to Blast?

If Blast takes users' pledged ETH and returns it to the main network to participate in Lido's pledge, it is a unified asset management behavior of "institutions", and users cannot choose the final destination of their assets. Stay attribution, when the feasibility of staking the layer2 LSD protocol is completed, there will be a large number of "retail investors" from various layer2 platforms to cross layer2 to do overflow financial management of liquidity, and its future imagination space cannot be underestimated.

3) In order to stimulate the development of Metis ecological LSD protocol, Metis launched Metis Liquid Staking Blitz (LSB) to accelerate the growth plans of many LSD protocols, except Enki Protocol In addition, 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 promoting the refined management and implementation of layer 2's liquidity.

On Ethereum, the emergence of Staking protocols such as LIDO, RockX, and SSV has raised the ETH pledge rate on layer 1 to 38%. On Metis, Enki How much imagination will LSD protocols such as 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 forward flywheel of the Sequencer Miner + LSD protocol will form the mature fundamentals of Staking on Metis. Just like the fundamentals of Eigenlayer is actually to deliver the security consensus capabilities of the Ethereum main network to the emerging layer2 chain, Staking The value must be implemented in the end to be stable;

2. Metis has built a decentralized economy specifically for METIS native Token. This difference Unlike other traditional layer 2 models that use Token as the governance token, they are continuing to exert their self-generating capabilities in the process of building an ecosystem. If the token of layer 2 only stays in the new and governance stage, its pure incentive Tokenomics will be difficult to effectively empower the Token Holder.

The above

At this point, everyone should have realized that Metis is the first to make layer2 native LSD Staking and the future ReStaking platform actually have hidden ambitions.

While many layer2s are openly sharing "modular" technology components and expanding their territory with Rollup As A Service, Metis has built a set of Rollup The ecological liquidity sharing component of Ecosystem As A Service attempts to deliver a decentralized economy of native token + native LSD as a "modular" commodity.

The key to wave value growth.