The news is official: Ethereum layer 2 Metis has launched a $5 million crypto incentive program for development on DeFi.
The program is called Metis Journey, and it is designed to enhance new and existing DeFi applications on the Metis network, starting with the blue-chip Aave v3 protocol.
Summary
The Aave Protocol
The program begins with the strategic allocation of tokens specifically to Aave v3. Specifically, 100,000 METIS tokens will be allocated to incentivize liquidity pools for all assets available to Aave users on Metis, namely ETH, METIS, USDC, USDT, and DAI.Â
The goal is to attract a larger user base to the Metis platform, thanks precisely to Aave’s involvement.
Aave is currently the third largest DeFi protocol in the world for TVL, with nearly $4.7 billion, enabling it to trail the second largest, Maker, at 4.9.Â
Its token, AAVE, capitalizes less than $900 million, so only a fraction of the protocol’s total TVL.
AAVE’s market value has risen 16% over the past seven days, but it has not performed particularly well during 2023. Nevertheless, it remains one of the most attractive DeFi tokens.
In addition to Metis, Aave also uses other Ethereum second layers, such as Polygon, Avalanche, and Optimism.Â
Ethereum: other crypto and DeFi projects in the Metis ecosystem
The Metis initiative also involves other DeFi projects
For example involved are Hummus, a combination of single-sided staking pools from Platypus Finance and bespoke pools enabled by Balancer, or Stargate, a cross-chain bridge that facilitates seamless asset transfers to and from the Metis network.
Synapse, a platform offering cross-chain communication and yield farming capabilities, and Unimaia, or an alternative to Uniswap equipped with concentrated liquidity, are also involved.
Metis Journey also extends incentives to regular users who contribute liquidity, engage in trading, and actively participate in the Metis ecosystem.
The initiative kicks off a series of strategic moves to catalyze exponential growth within the Metis ecosystem and community.
The MetisDAO token
The Metis project also has its own MetisDAO token, which, not surprisingly, is now registering +7% in the crypto markets.
Actually the bulk of the recent growth started a couple of days ago, so much so that the accumulated gain since Monday has been almost 20%.
However compared to 30 days ago it is still down 8%, and the current price of $12 is still 25% lower than it was at the beginning of the year.
The token was launched in 2021 at the height of the bull run, reaching an all-time high in January 2022 at over $320. Since then it has plummeted to the $10 touched a few days ago, and is now -96% from the highs.
In such a situation it is more than normal that the project has decided to do something to lift the tokens’ fortunes, and the Metis Journey initiative may have that purpose as well. It is no coincidence that Aave, which is one of the fittest and most widely used DeFi protocols in the world, was chosen as the first beneficiary.
Crypto: the state of DeFi on Ethereum’s L2, Metis
The bear-market of 2022 did real damage in DeFi, such as the implosion of the Terra/Luna ecosystem in May last year.
In addition, 2023, unlike the crypto markets, did not see a solid recovery
The highest ever TVL for the entire DeFi ecosystem was about $175 billion as of November 2021, while 2022 closed at $38 billion.
In other words, the loss was 78%, which is in line, for example, with the losses cumulated over essentially the same period by the price of Bitcoin or Ethereum.Â
Currently, DeFi’s total TVL is only $39 billion, which is about the same as at the beginning of the year, despite the fact that Bitcoin’s price is at +62% and Ethereum’s at +36% instead.
So 2023 is not a year of revival, but a year of stagnation, which is still better than last year’s bloodbath.
