Hercules jumped to the second-largest protocol by TVL and saw the largest increase in TVL among leading Metis protocols, reaching $9 million (+32% QoQ). Hercules launched in March 2024 and was backed by the Metis Ecosystem Development Fund.
TVL (METIS) increased 54% QoQ to 1.5 million METIS. The increase indicates a positive net capital flow into the Metis network.
The community approved the Metis Liquid Staking Blitz, an initiative focused on accelerating the growth of LST and LST-focused products. Artemis Finance and Enki are live on Metis mainnet with TVLs of $8.4 million and $4.9 million, respectively.
As part of the Decentralized Sequencer’s Phase 2 rollout, Sequencer Mining went live. This upgrade distributes transaction ordering and block production among node operators, enhancing decentralization and aligning user and network interests.
Primer
Metis (METIS) is an Ethereum Layer-2 Rollup that offers simple and fast smart contract deployment within the network. Metis offers many products to blockchain developers including the Metis NFT Bridge, Oracles, Nodes, Data Indexers, and a SubGraph. The platform supports a wide range of decentralized applications and enterprise-level use cases, facilitating a friendly experience for developers and end-users.
The native token of the Metis ecosystem is METIS, which serves multiple purposes within the network. It is used for paying transaction fees, staking, and participating in governance processes.
A distinctive feature of Metis is its decentralized sequencer. This system employs dual sequencers operated by the Metis Foundation and select partners, ensuring increased transparency and reducing risks related to censorship and MEV. This architecture enables Metis to offer a robust solution for developers looking to build scalable decentralized applications while maintaining close alignment with Ethereum's secure infrastructure.
Key Metrics
Analysis
Following a six-month period where METIS’s circulating market cap increased 10X, it retraced along with the rest of the market in Q2 2024. METIS ended Q2 2024 with a circulating market cap of $272.8 million (-50.9% QoQ) while the fully diluted market cap fell to $479.8 million (-53.4% QoQ). METIS's market cap ranking fell from 159 to 191 among the entire crypto market. Within the Ethereum L2s, Metis ranked as the seventh largest by market cap.
The circulating supply of METIS expanded to 5.7 million, representing a 5.4% QoQ increase (21.6% annualized). Metis has a maximum total supply of 10 million METIS; therefore, 57% of the supply is now in circulation.
Metis reported revenue of 5,400 METIS, a decrease of 72.9% QoQ. The revenue in USD also fell sharply to $370,000, marking an 81.2% decrease QoQ. This decline was driven by decreased transactions and a reduction in the average transaction fee due to lower network activity. Notably, Metis saw a massive spike in revenue on January 18th and 19th with $325,000 and $737,000 respectively.
Metis network activity slowed with average daily active addresses of 4,700, a decrease of 22.9% QoQ; the average daily new addresses were 1,000, a decrease of 52.2% QoQ; and the average daily returning addresses were 3,700, a decrease of 7.0% QoQ. Despite the overall slowdown, returning addresses fell the least, indicating that core users remained active on the network.
In December 2023, the Metis Ecosystem Development Fund was established with 4.6 million METIS ($450 million) to support the development and expansion of the Metis ecosystem. In January 2024, the Metis Foundation committed 250,000 METIS for ecosystem grants, all of which are committed solely for 2024, and launched the MetisEDF Grant Tracker for grant transparency.
The Metis network had a bunch of key announcements and proposals in the second quarter focused on growing the ecosystem:
Metis integrates with Coin98 Super Wallet, which offers a non-custodial, multi-chain wallet for NFTs, built-in DEXs, a cross-chain bridge, and a DApp browser.
imToken Wallet has integrated Metis, enhancing user experiences and expanding Metis's reach, particularly in Asia.
Maestro Bots has integrated with Metis, enhancing trading with its advanced functionalities like anti-rug and scam detection, anti-MEV protection, fast trading speeds, and copy trading.
Onboard OMO Swap as a Community Verified Project of the Metis ecosystem. OMO is a cross-chain aggregation protocol with no liquidity constraints and zero slippage.
Onboard Owl Protocol as a Community Verified Project of the Metis ecosystem. Owl Protocol is a Web3 dev suite that allows users to build complete apps or integrations with just a REST API.
Integrate 0xGasless, an ERC-437 compliant account abstraction SDK, into the Metis ecosystem.
The Total Value Locked (TVL) in USD on Metis was $70.7 million, a decrease of 28.3% QoQ, while the TVL in METIS was 1.5 million METIS, an increase of 54.0% QoQ. The increase in TVL METIS indicates a positive net capital flow into the network.
Aave maintained its position as the largest protocol with a TVL of $38 million (-33%) and accounting for 54% of Metis’s TVL. Hercules jumped to the second-largest protocol by TVL and saw the largest increase in TVL among leading Metis protocols with a TVL of $9 million (+32% QoQ). Hercules launched on March 18, 2024, and was backed by the Metis Ecosystem Development Fund. Shoebill is a new LST lending protocol that launched on April 25th and amassed $3 million TVL, jumping to the fifth-largest protocol by TVL. Other leading protocols include Maia Dao with $6 million (-32% QoQ), Netswap with $5 million (-39% QoQ), Tethys Finance with $2 million (-50% QoQ), and WAGMI with $2 million (-52% QoQ). The rest of the protocols in the Metis ecosystem have a combined TVL of $6 million (-43% QoQ).
In Q2, the community approved the Metis Liquid Staking Blitz (LSB), an initiative focused on accelerating the growth of LST and LST-focused products on Metis by leveraging the Ecosystem Development Fund.
Round One concluded in March 2024, and the two LST protocols with the highest number of votes, ENKI and Artemis Finance, were paired with the Metis Foundation sequencer nodes. Both are now live on Metis, with Artemis TVL at $8.4 million and Enki TVL at $4.9 million, bringing the total liquid staked TVL to $13.3 million.
Multiple new protocols are going through governance as part of the Metis Liquid Staking Blitz:
StaFi - a liquid staking protocol for several proof-of-stake blockchains.
Stake.link - a liquid staking protocol for LINK token holders and DeFi protocols relying on Chainlink’s infrastructure.
Velix - a liquid staking derivative (LSD) platform designed to simplify and enhance the staking experience of users within the Metis ecosystem.
Accumulated Finance - an omnichain liquid staking protocol integrated with Curve ecosystem.
Metis's stablecoin market cap has been consistent over the past year, with the overall stablecoin market cap at $32.9 million, a decrease of 17.4% QoQ. USDC holds a market cap of $16.0 million (-25% QoQ), and USDT holds a market cap of $15.6 million (-4% QoQ). Metis ranks 29th among chains by stablecoin market cap.
Decentralized Sequencer
The Metis Decentralized Sequencer, operated by the Metis Foundation and select partners, was launched on March 14, 2024. It ensures increased transparency and reduces risks related to censorship and MEV. The development process involved extensive community testing with over 300,000 contributors handling 11 million transactions.
Metis initiated Phase 2 of the Decentralized Sequencer upgrade on April 8, 2024. This phase introduces multiple transactions per block, a robust transaction pool designed to improve network liveness, and censorship resistance.
On April 23, 2024, Sequencer Mining went live. This upgrade distributes transaction ordering and block production among diverse node operators, enhancing decentralization and aligning user and network interests.
Closing Summary
After six months of strong growth, Metis, along with the broader market, cooled in Q2 2024. Network activity slowed with active addresses and transactions declining. Despite this, TVL (METIS) increased, indicating a positive net capital flow into the network.
The Metis Ecosystem Development Fund, established with 4.6 million METIS ($450 million), is being used to support the development and expansion of the Metis ecosystem. The fund was used to launch the Liquid Staking Blitz, with Artemis and Enkin now live on the network. Multiple other protocols are also going through governance to join the Liquid Staking Blitz.
The Decentralized Sequencer, a major milestone for Metis, was launched on March 14, 2024, and underwent significant enhancements in Phase 2, including the introduction of Sequencer Mining.
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