Metis: Pioneering the Path to Decentralization

Article author: KevinLiu, Co-founder of Metis and CEO of ZKM

Article translation: Block unicorn

In the ever-evolving field of blockchain technology, decentralization has emerged as a guiding principle—especially for Ethereum, where it serves as a key differentiator and advantage compared to other blockchain ecosystems. Yet, the question that has persisted since Ethereum's first step remains: how do we achieve decentralization?

As outlined in this article, Vitalik proposed milestones that Ethereum rollups must reach to become fully functional and truly decentralized. By progressing through these stages, rollups will move beyond their initial developmental phase and meet the most challenging aspect of the blockchain trilemma.

Vitalik’s proposal offers a strong outline of the “how” — how rollups should become fully functional and technically decentralized. However, decentralization extends beyond just technical layers; it is a complex architecture that we need to actively build. So, how can rollups actually reach this elusive goal of decentralization?

As a co-founder of Metis and now leading a project dedicated to building infrastructure for hybrid rollup technology (ZKM), it is precisely this “how” that keeps me up at night.

Stages of Decentralization: A Strategic Blueprint

The journey toward full decentralization is divided into four stages:

Stage 0: Cold Start — Laying the Foundation for Decentralization

Stage 0, or the "cold start," initiates the blockchain project with a focus on establishing robust infrastructure. Similar to a heavy construction phase, the core team plays a central role in development and management. Although community participation is encouraged, maintaining control during this intensive phase remains a challenge.

Within the complexity of Stage 0, community involvement is critical. While the core team leads the heavy lifting, projects encourage community engagement through activities such as voting and token delegation. However, the issue lies in these activities being confined within limited parameters, offering only a superficial sense of decentralization.

To truly advance decentralization, strategic community engagement is essential. Beyond token-based voting, fostering genuine community ownership through transparent communication, education, and collaboration is equally important. Building a community genuinely invested in the project’s success lays the foundation for meaningful decentralization.

Brief Summary of Stage 0:

1. Goal: Establish foundational operations.

2. Focus: Build a solid foundation for future growth and decentralization efforts.

3. Approach: Concentrate execution efficiency through a core team while cultivating a sense of ownership among the community—even if not literal ownership yet.

Stage 1: Infrastructure Decentralization — Harnessing the Power of Utility Tokens

Utility tokens play a dual role in Stage 1: 1) Beyond serving as transactional tools, they become instruments for network security and decentralization. 2) Genuine contributors use utility tokens for staking, mining, voting, and governance, actively shaping the project’s trajectory.

Empowering Real Contributors: A Collaborative Building Model

Stage 1 marks an era where infrastructure development and operation are no longer exclusive domains of centralized authorities. Genuine contributors who actively promote network growth gain tools and incentives for key processes. This democratization aligns with decentralization principles and fosters collective ownership.

Recognizing the importance of infrastructure decentralization is crucial. As network infrastructure becomes more decentralized, it grows more resilient, adaptive, and capable of withstanding challenges inherent in the dynamic landscape of blockchain technology.

By eliminating single points of control and leveraging the power of utility tokens to empower real contributors, blockchain projects lay the groundwork for a stronger and more participatory ecosystem. This evolution is not an isolated achievement but a strategic stepping stone toward a decentralized future.

Brief Summary of Stage 1:

1. Goal: Eliminate single points of technical control.

2. Focus: Distribute control and ownership over critical components, using utility tokens to secure the network.

3. Approach: Empower genuine contributors to participate in infrastructure development and operations, fostering a more resilient and censorship-resistant network.

Stage 2: Revenue Sharing — Aligning Incentives for Sustainable Growth

Many blockchain projects and ecosystems struggle with conflicting objectives between short-term token holders and long-term stakeholders such as core teams and major contributors. Short-term holders prioritize immediate price fluctuations and quick returns, while long-term stakeholders aim to build a sustainable future.

Mindset Shift: From Airdrop Farming to Ecosystem Participation

The key to resolving these conflicts lies in shifting the mindset of community members. Moving beyond the tendency to join ecosystems solely for airdrop farming, participants must embrace more active roles in ecosystem growth. This shift means understanding that rewards are earned through active participation rather than passive speculation.

Metis: Decentralizing Sequencers via Revenue Sharing

A vivid example of this transformative approach is Metis’ decision to decentralize its Sequencer. Metis adopted a revenue-sharing model with all node operators, creating a system where token holders can stake their assets to earn income and mining rewards. This approach establishes a direct relationship between community participation, staking for network security, and the overall value of the Metis network.

Ecosystem Growth and Stakeholder Benefits

The beauty of this model lies in its self-reinforcing nature. More active nodes and increased community participation lead to higher levels of staking, enhancing network security. As the Metis ecosystem expands, attracting more dApps and builders, the overall network value grows. Consequently, both short-term and long-term stakeholders benefit from the ecosystem’s prosperity.

Aligned Interests: The Foundation for Sustainability

Stage 2 focuses on aligning the interests of all parties within the ecosystem. By incentivizing active participation and contribution rather than passive speculation, blockchain projects can cultivate a community genuinely committed to the network’s long-term success. Shifting from a collective vision of short-term gains to sustainable growth ensures stakeholder interests are aligned, laying the foundation for sustainability.

Revenue sharing is not merely a mechanism for distributing rewards; it is a transformative force reshaping community dynamics and aligning interests. As demonstrated by Metis, this approach sets the stage for a decentralized ecosystem where every participant is not just a beneficiary but an active contributor to shared success.

Brief Summary of Stage 2:

1. Goal: Align the interests of short-term token holders and long-term builders.

2. Focus: Introduce revenue-sharing mechanisms to incentivize active community participation.

3. Approach: Shift community mindset from short-term gains to active participation in ecosystem growth—for example, Metis’ model where revenue sharing encourages collaboration and contribution.

Stage 3: Full Governance — Tackling Complexity with Two-Tiered Governance

The ultimate goal of the entire journey is to establish a comprehensive governance structure that harmonizes the interests of the broader community, small token holders, and key stakeholders. While token-weighted voting risks dominance by large holders, a more nuanced approach is required. The solution lies in drawing inspiration from modern political structures to create a two-tiered governance system that ensures inclusivity and balances the influence of various stakeholders.

Addressing the Whale Problem

The challenge at this stage is twofold: empowering small token holders to influence ecosystem decisions while preventing undue influence from large token holders. A traditional single-layer governance model based purely on token quantity may inadvertently favor whales, drowning out the voices of smaller contributors and community members.

Metis’ Two-Tiered Governance Model: Commons and Eco Nodes

Metis’ two-tiered governance model consists of Commons and Eco Nodes. The Commons functions similarly to a decentralized autonomous organization (DAO), where each community member can create, join, and form interest groups.

The Commons operates much like a parliament in most Western political systems. Within the Commons, small token holders pool their voting power, collectively staking it on governance platforms to amplify their influence. This collective strength gives smaller token holders a more substantial voice in decision-making, counterbalancing the dominance of large whales.

Commons as First-Layer Governance: A Democratic Forum

Within the Commons, members can submit proposals, engage in debates, and collectively decide on matters affecting the ecosystem. This vibrant and inclusive space ensures even small token holders can actively participate and contribute to project governance. Proposals approved by the Commons then proceed to the second layer of governance.

Eco Nodes as Second Layer: Guardians of Long-Term Interests

Eco Nodes constitute the upper tier of governance—they consist of core builders, contributors, and stakeholders deeply committed to the ecosystem’s long-term success and growth. Eco Nodes operate similarly to a senate in most Western political systems. Unlike the Commons, Eco Nodes carry a dual responsibility: validating proposals and taking decisive action. Their voting power is not determined solely by token quantity; instead, it is finely tuned based on reputation power. Reputation power is earned through past contributions, creating a more meritocratic system.

Balancing and Ensuring Accountability

The two-tiered governance model maintains a delicate balance by allowing small token holders to collectively influence decisions while enabling Eco Nodes to act as gatekeepers, reviewing the soundness and long-term viability of proposals. The system is designed to be flexible—Commons can evolve into Eco Nodes upon meeting specific criteria, while Eco Nodes may face penalties for malicious behavior. This balanced approach ensures accountability and promotes a dynamic, responsive governance structure.

By leveraging collective influence in the Commons and integrating the wisdom and experience of Eco Nodes, Metis aims to ensure fair and transparent representation for all stakeholders. This innovative governance structure reflects a commitment to true decentralization and community empowerment.

Brief Summary of Stage 3:

1. Goal: Establish appropriate structures for different types of stakeholders.

2. Focus: Create a two-tiered governance model that balances the influence of various stakeholders, including small token holders and key contributors.

3. Approach: Establish a Commons layer for community engagement and proposal approval, and an Eco Nodes layer for validation and decision-making, ensuring a fair and accountable governance structure.

Conclusion

The time has come to shift from broad discussions about general milestones to concrete, distinctive steps on the path to decentralization. Being the first optimistic rollup to decentralize its sequencer and share revenue is one such step. Another is implementing a two-tiered governance structure that aligns the interests of a blockchain project’s core team with those of the token holder community.

By following these steps, we can harmoniously pursue the seemingly conflicting goals of decentralization and growth. I look forward to seeing fresh ideas emerge from other blockchain projects on their own journeys.