Ethereum Layer 2 scaling solution Metis aims to become Ethereum’s first decentralized Layer 2 infrastructure, empowering its community to take over key centralized components of the network.
Currently, Layer 2 networks introduce elements of centralization, such as relying on single sequencers controlled by the projects’ teams. A sequencer is a component of Layer 2 networks that orders and batches multiple off-chain transactions before submitting them to the Ethereum blockchain. This creates a single point of failure and potential censorship risks that could have a significant impact on users of the networks.
To achieve full decentralization over time, Layer 2s must address these centralization risks, Metis co-founder Elena Sinelnikova told The Block in a recent interview. “One way to do this is by introducing multiple sequencers and relinquishing control to the broader community,” Sinelnikova said. “However, it’s imperative that this transition is carried out in a safe, secure and well-planned manner.”
Metis has an ambitious target of implementing such decentralization by the end of the year. By empowering the community to take control over a pool of decentralized sequencers, Metis aims to demonstrate it’s possible to maintain the benefits of Layer 2 scalability while reducing centralization risks, Sinelnikova said. Additionally, it involves posting full transaction data to Ethereum, transitioning the Metis Layer 2 back to a classic Optimistic Rollup.
The broader question of whether blockchains can scale over time without introducing further centralization is more complex, Sinelnikova added, with solutions to balance between scalability and decentralization continuing to be explored.
Growth in Layer 2 adoption
Adoption of Layer 2 solutions has grown considerably this year, with combined daily transaction averages on networks like Arbitrum, Base and OP Mainnet more than double those on the Ethereum main chain.
Throughput and fees are part of the driver behind this trend, with Layer 2s processing more than five times the amount of transactions per second on average, according to L2BEAT, at a significantly lower cost compared to the base layer.
Transactions per second scaling factor. Image: L2BEAT.
However, Sinelnikova puts the surge down to successful airdrops following the launch of new networks like the Coinbase-incubated Base, Artbitrum, OP Mainnet, Mantle, Linea and zkSync — highlighting the rapid growth of the technology over the last 18-24 months.
“The dominant trend driving transaction volume on Layer 2 networks is related to airdrops,” Sinelnikova said. “This activity has proven to be profitable, especially since many of these Layer 2 blockchain projects have raised substantial funding and plan to distribute a significant portion of their token supplies to network participants. Some individual airdrops have been worth five or six figures in U.S. dollars.”
“Given the emergence of multiple new blockchain networks like Base, Mantle, Linea, zkSync and others, there is a significant amount of airdrop activity,” Sinelnikova continued. “The concept of airdrops, coupled with their demonstrated profitability, has led to the perception that active participation on Layer 2 networks is one of the most profitable and low-risk activities for cryptocurrency users.”
Abstracting away complexity
While the growth in Layer 2 adoption is impressive, bridging there in the first place remains largely complex and expensive for the average user, with withdrawals directly into Layer 2s from centralized exchanges currently limited — something which Sinelnikova says needs to be addressed for Layer 2s to deliver on their widespread adoption potential.
“Optimistic Rollups still require users to wait for up to seven days for withdrawals, which can be inconvenient and hinder adoption,” Sinelnikova said. “Meanwhile, ZK Rollups face stability problems, and it may take a few more years to resolve these issues due to their complexity and the need for EVM (Ethereum Virtual Machine) compatibility maintenance.”
The security of existing bridges is also a significant challenge, Sinelnikova added, risking users’ assets during transfers and responsible for some of the highest-profile DeFi exploits to date.
However, the Metis co-founder was encouraged by Hybrid Rollup technology and non-bridge connectivity solutions currently under development.
Beyond Metis’ decentralization plans, its roadmap includes integration with Ethereum Improvement Proposal 4844 to lower gas costs and make transactions more cost-effective for users. The Layer 2 project is also developing a Hybrid Rollup solution in collaboration with ZKM Econode to address the seven-day withdrawal delay while combining the benefits of Optimistic Rollups with the security of…
Read More: Metis aims to become Ethereum’s first fully decentralized Layer 2 in 2023