There is a steady rise in ethereum layer 2 scalability solutions. Last week we had witness Polygon (Matic network) token reached a $1 milestone on major exchanges. Polygon is also a layer 2 scalability solution that was started in 2017 in India which aims to solve ethereum scalability and high gas fees problems with its innovative technology.
Metis is a similar protocol that addresses Ethereum (ETH) scalability problems with innovative Layer 2 solutions. The team at MetisDAO shared the details of its last “growth” funding round. The protocol has raised $4 million from seasoned blockchain-focused venture capitalists like Block Dream Fund, DFG, Master Ventures, Parsiq, Autonomy Capital, and a number of minor supporters. Earlier this year, the platform secured $1 million in angel investments.
Metis CEO and co-founder, Elena Sinelnikova said that this capital will fuel the release and promotion of Metis Rollup, the Layer 2 Ethereum (ETH) platform tailored for decentralized finances (DeFis) use cases.
Our Layer 2 Alpha testnet recently launched, with 12,632 wallets created, 6,856 DACs (Decentralized Autonomous Companies) registered, and 166,859 on-chain transactions made in three weeks.Metis CEO and co-founder, Elena Sinelnikova
What is the Ethereum scalability problem?
Any developer who has tried to build a decentralized application used by the masses, on Ethereum layer-1 blockchain, knows that in its current manifestation, it isn’t quite ready. Transactions take a long time to clear and paying for every basic function is expensive and creates a poor user experience. It all boils down to a general ‘scalability’ problem. Both poor throughput and cost have been massive barriers to any meaningful adoption.
The main reason behind Ethereum’s scalability bottleneck is that each node in the network has to process each transaction. Remember that nodes perform the job of verifying that the miners’ work is valid. They play an integral role within the network as they’re the main check on the miners if they decide to act maliciously. Similarly, each node keeps an accurate copy of the current network state, meaning they don’t need to rely on a third party to confirm the balance of every account and smart contract.
To solve the inherent scalability on the ethereum network, there are two types of solution that exists -
1. On-chain scaling refers to any increase in capacity at the core blockchain layer. The most common on-chain scaling prescription is increasing the amount of data that can fit in each block. By raising the data limit, you can fit more transactions in each 13-second block interval. Other examples of on-chain scaling are centered around signatures and manipulating the amount of data required for a valid transaction. However on-chain scaling has its own challenges and usually not recommended.
2. Off-chain scaling also called layer-2 solutions commonly refers to building additional layers that can handle transactions without using the core blockchain. Common examples of off-chain scaling include batching multiple payments into one transaction, payment channels, and sidechains. The core idea behind off-chain scaling is that the main blockchain should only be used as a trust and arbitration layer. Proponents argue that if we want transactions to persist across every node in the network, they should be limited to high-value transactions.
Both Polygon and Metis are Off-chain layer-2 scaling solutions and have proved to scale the network while reducing the gas fees and providing more usability to the development of DeFi and DApps. Polygon is a more mature startup in this space with already multiple major DeFi and DApps are onboarded on its platform. Metis, on the other hand, looks very promising.
Venture capitalists that backed MetisDAO are super excited about its prospects. Jason Tolliver, the co-founder of Autonomy Capital and an investor in the platform, stresses the importance of MetisDAO progress for the entire Web 3.0 ecosystem:
Metis aims to become the backbone of the Web 3 decentralized economy by focusing on scalability, decentralization, and user experience. Due to the company’s long-term vision, team, and strategic partners, we believe that Metis will achieve this goal, and that the company is poised to position itself as the dominant Layer 2 solution for Ethereum.
Also, the protocol is going to empower NFT marketplaces with its Layer 2 functionality. Recently, more than 2,500 users joined the “Rebuilding the Tower of Babel” digital collectibles auction on MetisDAO.
METIS token’s initial decentralized exchange offering will take place on PAID Network’s IGNITION launchpad and Gate.io on May 13, 2021.Tweet