Is decentralized sorter just the beginning of Rollup Layer2’s potential?

Original author: Haotian

Many people think that @MetisDAOs decentralized sorter is just a technical narrative produced by Rollups involution. After reading this magnificent article by its Co-Founder @kevinliub, I found that it is far from that simple.

It turns out that decentralized Sequencer is just the beginning of Rollup Layer 2’s potential. Our longed-for layer 2 native DeFi, ecological explosion and other visions must be based on this. Why? Next, let me talk about my understanding.

1) Decentralized Sequencer is the core narrative of almost all layer 2 rollups at the beginning, but some mainstream comprehensive rollups, such as Optimism, zkSync, etc., have stagnated in the decentralization process due to various considerations.

Taking OP as an example, it has captured the vast majority of the market share, and the OP Stack strategy has also been very successful. At this time, the rash implementation of decentralized Sequencer will bring potential crises and challenges to the overall layer 2 ecology: MEV, nodes doing evil wait. Therefore, it makes sense to temporarily stall the decentralized narrative in the name of optimism. On the other hand, Metis, as a cutting-edge pursuer of layer 2, does not have the ecological baggage of Optimism. From 0 to 1, it can promote decentralization from the root and use it as the foundation for future ecological development.

2) The decentralization of Sequencer is just an appetizer. The highlight is the decentralized construction of the Tokenomics economic model. Simply put, by giving the basic Gas fee utility use case to layer 2 Token, the Token of layer 2 can be used in the decentralized incentive process of Sequencer. , plays a role in the enabling stage of ecological construction and the construction of layer 2 native DeFi building.

Although the original route of using ETH as the layer 2 gas token is more in line with the political legitimacy of layer 2, in this way, the layer 2 token becomes purely a governance token and cannot generate value in the actual economic structure and continue to empower the token itself. However, the use case of governance + voting is obviously unable to support everyone’s expectations for the value of layer 2 tokens.

Metis used $Metis as Gas Token two years ago. At that time, it seemed like a rebellious innovation, but it actually contained Long-Term planning for the layer 2 economic model. For example: People criticize layer 2 for not having native DeFi. If a new chain circulates Wrapped versions of the main chain Tokens, it will only enjoy the spillover effect of the liquidity of the main chain, but lacks the explosive power of native DeFi;

3) Don’t think that it is easy for layer 2 to create decentralized Sequencer and Gas Token. On the one hand, it will bring MEV problems to layer 2. When the Sequencer is centralized, the space for MEV is very small, but after the decentralized Base is built, MEV is bound to become a challenge. How to actively and effectively solve it is a big problem. We need to find incentives for MEV Routers based on MEV-Boost like Ethereum, and at the same time eliminate the negative impact of MEV on the layer 2 ecology.

On the other hand, when the layer 2 Token becomes the Utility use case Token, a direct challenge lies in the subsequent ecological succession. For example, DeFi on the Ethereum main network has evolved from Staking to Restaking. The prerequisite for the DeFi building to rise into the sky is Staking. It is crucial to enable the incentivized Sequencer nodes and a large number of Grant-obtained project parties to use the incentive token as the starting point for building a new native DeFi (non-mining selling), participate in the ecological construction, and jointly make the pie bigger.

If you carefully observe the Metis ecosystem, you will find that @TheHerculesDEX is doing innovative derivatives DEX, @ENKIProtocol is doing LSD, etc. They all seem to be new faces, but for a layer 2 platform with underlying tokens, these DeFi infra may release the key to the development of layer 2 native DeFi, and these alone are not enough. There will definitely be more potential. Ecological projects surface;

To sum up, it is not difficult to find that building a decentralized Sequencer and giving up rights is just the beginning. The real challenge lies in how to coordinate the interests of all parties in the ecosystem, how to guide participants to actively build rather than passively speculate through incentives, and how to build based on Native Token builds a stable and long-lasting layer 2 DeFi ecosystem.

Let layer 2 truly become an extension layer that brings new users, ecology and other new forces to the main network, rather than just a subsidiary option of Airdrop Hunter.