Metis launches second phase of its decentralized sequencer upgrade

Ethereum scaling solution Metis has launched the second phase of its decentralized sequencer.

Metis launched the first phase to a small group of users last month in a step beyond the current centralized single-sequencer model used by Layer 2 rollups, enabling multiple parties to run sequencers and participate in the consensus process designed to enhance Metis’ security and decentralization while sharing its revenue.

The second phase went live today, enabling multiple transactions within a single block, transaction pools (mempools), and introducing Sequencer Mining to the Metis ecosystem, according to a statement shared with The Block.

Sequencer mining enables sequencer nodes to earn METIS tokens for ordering and batching transactions on the Layer 2 and submitting them to the Ethereum base chain. The globally distributed nodes are designed to avoid a central point of failure and ensure fairness in block sequencing, the team said.

Liquid staking providers on Metis operate similarly to Lido Finance on Ethereum, managing sequencer nodes that allow users to stake tokens and receive liquid staking tokens in return. Metis’ governance community selected Artemis Finance and Enki Protocol as its initial liquid staking protocols.

Artemis Finance is designed exclusively for Metis’ decentralized sequencer, enabling users to stake METIS tokens to receive artMETIS liquid staking tokens from today. Enki is Metis-native, offering a “pre-staking” solution leveraging a dual-token system that includes seMETIS liquid staking tokens and ENKI governance tokens, with its mainnet launching soon.

Metis also announced a 220,000 METIS ($15 million) grants program for 2024, designed to support the growth of liquid staking token products on Metis.

Decentralizing Layer 2 networks

While rollups are a promising scaling solution for Ethereum, helping to increase transaction throughput and reduce fees — especially following Ethereum’s recent Dencun upgrade — they introduce elements of centralization, such as relying on sequencers and provers controlled by the projects’ teams who also retain any revenue the sequencer generates.

A sequencer is a component that orders and batches multiple off-chain transactions before submitting them to the Ethereum blockchain. A prover is a mechanism that generates cryptographic proofs to validate transactions without processing them on the main chain. These currently create single points of failure and potential censorship risks that could have a significant impact on users.