Yesterday, Metis announced the launch of the Liquid Staking Blitz (LSB).
The Metis Liquid Staking Blitz focuses on catalyzing the growth of LSD and LSD-focused products on Metis, leveraging the Metis EDF.
Summary
What is Metis Liquid Staking Blitz (LSB)?
LSB, which stands for Liquid Staking Blitz by Metis, is an initiative aimed at accelerating the growth of LSD and LSD-focused products on the Metis network.
Metis is in turn a layer-2 of Ethereum.
LSD (Liquid Staking Derivatives) are derivatives on liquid staking, and liquid staking is in turn staking done through decentralized intermediaries that release tokens to those who stake ETH.
Liquid staking is for example Lido’s, by far the largest pool in the world for ETH staking.
Liquid staking has long had a significant impact in the DeFi sector, unlocking liquidity of staked assets and promoting rapid growth and broader participation in the DeFi ecosystem.
In addition, after the Shapella update that unlocked ETH for staking on validator nodes, many stakers have chosen to move their ETH to Liquid Staking Derivative protocols. Currently, LSDs represent 38% of all ETH staked.
However, there were no LSDs for the native token of a layer-2. Metis’ LSB is the first case of LSD on a layer-2.
Therefore, Metis’ LSB is used to accelerate the adoption and growth of LSD within the Metis ecosystem and on layer-2, and it will integrate Sequencer Mining and Ecosystem Grants to promote the development of LSD-focused products.
For the first 12 months, all Metis sequencing nodes will be subject to a 20% mining reward rate (i.e. the rate at which smart contracts reward for block production).
METIS: the native token of the Metis layer-2
Metis also has its own token, called METIS, with which rewards will be issued.
On the market, it only has a market capitalization of just over 400 million dollars, although it is still more than COMP from Compound, or the new LUNA from Terra 2.0, or HT from Huobi.
Since the news of the LSB launch spread, the price of the METIS token has risen from $72 to $86, although the current price is not much higher than the beginning of the year ($74) and is well below the $117 of January 17th.
METIS was launched on the crypto markets in mid-2021, during the midst of a speculative bubble.
The initial market value was less than $10, and in January 2022 it reached its peak above $320.
Since then, it seemed to have started a long descent, culminating in October 2023 below $12.
And instead, with the recovery of the crypto markets at the end of 2023, the price of METIS has also recovered.
Within two months it had already risen above $90, with an incredible +650% in 80 days, and after also rising above $110 in mid-January, it then dropped just below $90.
Note that $90 is also the fee around which it had fluctuated a bit at the end of 2021, before the incredible boom of +475% in 30 days from mid-December to mid-January 2022 when it reached its all-time high.
The recovery at the end of 2023 has effectively eliminated the losses of the long bear market that started in the early months of 2022, bringing the price back to the values of the end of 2021.
Liquid Staking
Liquid staking is preferred by many over traditional staking on owned nodes, for a couple of reasons.
The first, very banal, is that direct staking on your own Ethereum validator node requires staking at least 32 ETH, which is a dollar equivalent of over $77,000.
The second is that ETH put in staking directly on a node cannot be used for other purposes until they are staked.
Instead, with liquid staking it is not only possible to stake any amount of ETH, using specific services like Lido’s, but above all it is possible to receive in exchange an equal amount of derivative tokens issued by the service provider.
For example, by putting ETH into liquid staking on Lido, you receive stETH (also known as stTokens) in return, which can then be freely used. When eventually unstaking ETH, you must return the stETH obtained in this way.
At the moment, 9.5 million stETH have been put into circulation, compared to the total of 29.5 million ETH staked across all nodes and platforms. This represents more than 30% of all ETH staked worldwide.
In addition to this, the ETH placed in staking on other liquid staking platforms should also be added, so that the overall percentage quickly reaches 38%.
Note that the market price of Lido’s stETH is almost the same as ETH, precisely because those who have stETH can return them to Lido in exchange for an equal number of ETH. Lido is a decentralized platform.
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