The Layer 2 (L2) solutions have seen significant activity recently, marked by notable capital inflows and developments. Tom Ngo, the visionary CEO of Metis, discusses how his platform and others are strategically positioning themselves to capture this wave, focusing on the importance of adaptability and user-centric development.
As the CEO of Metis, Tom Ngo brings a wealth of hands-on experience and a visionary approach to the blockchain industry. Known for his exceptional ability to lead large-scale, diverse teams, he has been instrumental in driving significant innovations and strategic projects in the blockchain sector. His leadership at Metis and in consultative roles is characterized by a deep commitment to harnessing the potential of blockchain technology for practical and transformative applications. Tom’s people-centric leadership style is focused on empowering teams to explore and realize new possibilities in blockchain, making tangible impacts in the field.
Recovering from Bear Market Challenges
The bear market has been unforgiving to many, but for Tom Ngo and Metis, it’s an opportunity for introspection and growth. While he believes there are a few things to be more cautious about during this challenging period, projects must keep building.
«No matter what market it is in, you have to strive to also continue to develop. In this space, there is no pause or stop. The music has to go on. We have to keep building. We have to refine our team. During the bear market, we’re a little bit more cautious of, of course, spending and just understanding where we’re at to make sure that our team is efficient but we still need the talent to keep building, so we see no difference as an effort our our goal and challenges are still the same. We’re here as an L2 to expand Ethereum infrastructure and make it highly adaptable for the greater audience».
The industry is now observing a significant flow of retail and institutional capital, encouraged by key players’ interest in cryptocurrency and a regulatory climate that favors blockchain developers. This shift has led to an enhanced confidence level, prompting a resurgence of investment, and attracted attention to Layer 2 solutions driven by the need for more scalable and cost-effective transactions. To recap accurately, the TVL in Ethereum L2 networks has surpassed $30 billion, marking a substantial increase from figures earlier in the year. This growth is a testament to the rising interest in Layer 2 applications and their potential to alleviate some of Ethereum’s scalability challenges.
«Now the technology and the supporting software and dApps are really highlighting what L2 is meant and designed to be. Layer 2s were designed to help scale Ethereum, manage a lot of the transaction and roll it up into Ethereum security layer. One thing year over year, we have seen the increase in TVL for all L2s triple compared to last year. And it won’t stop. This is currently where the market is showing its interest and where people are utilizing L2 with understanding of more options coming along with special use cases, as well as the user interface is a lot smoother and people have more trust in L2 and see their use case of why they were designed and why this was created».
The Evolution of Layer 2 Solutions
Tom notes that last year was pivotal for L2 solutions, marked by significant technological advancements and a shift in user engagement. The trend is clear, he says: layer 2s are increasingly becoming more specialized, each tailoring its approach to blockchain’s expansive potential.
«There’s a lot of solutions that are being built — L2 as a service, sequencer as a service. This is something we’re also exploring and looking forward to working with Eigen Layer on the dual staking side to enhance security for any network. The barrier of entry is a lot lower than a year ago with new tooling and it’s a lot easier to launch a network. I think sustainability and having a viable economic design is a key thing. And eventually, the ones that will stay and survive are the ones with the best plan, best business plan, best team to really onboard projects and really carve out their sector that they want to really focus on».
But the main challenges remain. One of the core issues with Layer 2 solutions is the potential for centralization. Many L2 blockchains rely on a single entity operating a sequencer responsible for processing transactions, which can lead to centralization concerns such as outage risks and the potential for maximal extractable value (MEV) actions.
Security is another critical area of concern. While Layer 2 solutions aim to retain the security guarantees of the underlying Ethereum network, adding another layer introduces complexity and potential vulnerabilities, especially when L2 protocols interact with the base layer or rely on off-chain data storage. These vulnerabilities could compromise transaction integrity. Moreover, some Layer 2 solutions inadvertently introduce points of centralization, making them attractive targets for attacks.
«Here at Metis, we see a point in security and decentralization. We just recently launched our first phase of our decentralized sequencing service. One of the key things with all L2s is they still rely on a single sequencer, which can be censored and the risk of censorship, also the risk of liveness as well. Having a decentralized sequencer pool helps mitigate a lot of this from a liveness standpoint and security as well. What makes us different is we also made an announcement with a partnership with Chainlink CCIP. the only cross-chain protocol at a level five security. And we see that as a very strong point due to this space in general, bridge risk is one of the top risks where we see a lot of hacks and vulnerability. Addressing that, and as well as decentralizing sequencer, we see that from the meta side as the next evolution of how L2 are built».
Metis: Standing Out in a Competitive Landscape
Metis has carved out its niche by focusing on DeFi, but now it’s exploring new territories that promise to bring more users into the fold. The project just welcomed DeFi Kingdom as one of their gaming onboarding.
«Everybody loves games, so we see gaming as an area where it will help drive users into this space. But currently DeFi is one of the stronger point. What makes Metis different is we have the METIS token, which is utilized for security, transactions and governance. Having a native token allows the industry and market participants to help secure the network as well. This opens up the liquid staking, liquid restaking environment for the network, which makes us unique in its whole with a mature ecosystem economic design as well».
Tom also notes Metis’s approach to supporting builders with hand-holding resources. It launched an Ecosystem Development Fund not long ago to help projects explore the L2 ecosystem and evolve their tech.
«We have deployed and supported a few projects — for example, DeFi Kingdom, Wagmi, Hercules exchange. Hercules, constructed using the official source code from Camelot.Exchange, features an economic design that has not only proven highly successful and sustainable but also effectively establishing itself as a fundamental piece supporting the burgeoning ecosystem of projects. We also have LeadTech, which is an innovative SocialFi app. Our EDF fund is still open to any builders or projects — the program is intended to support the ecosystem for the next 10 years, so we do it in a long term run».
However, Metis’ plans don’t just apply to developers. The team realizes that the complexity of the technology has become one of the main barriers to its adoption and tackles this through education and targeting emerging markets where blockchain can serve as a foundational financial infrastructure.
«We put a large focus on education. There’s a lot of untapped emerging markets — we see this as a target area to teach and also provide availability of the blockchain. So for our go-to-market strategy, we have different campaigns where a lot of networks are also doing the same just to create engagement. But we’re also tackling the payment side and with partners that are highly engaged in specialized areas, such as Versal Payment. They are the PayPal merchant founding team to open up emerging markets for transaction. These are the teams that we want to work with. That’s kind of the area that we see is how to really support the growing industry, drive adoption for our network».
Regulatory Landscapes and Legal Considerations
The conversation with Tom wouldn’t be complete without touching on the regulatory challenges and opportunities facing the blockchain space. The CEO remains optimistic about the evolving relationship between blockchain enterprises and regulatory bodies. With a collaborative approach, he believes the industry can navigate these waters successfully, ensuring growth and innovation continue unabated.
«I think it should be a collaborative effort. The more approval, the more acceptance from all the traditional finance and also the governing bodies just really helps solidify legitimacy of the space and of the adoption. Our market compared to the traditional market is fairly small still and once that opens up, it’ll be a gradual step from what we see now — more influx and more users. The projects should be up to date, try to be informed and make the best decision as a network on how to navigate this space. The language we use in our industry often treads a fine line, so it’s crucial to navigate these gray areas with care. We aim to maintain this delicate balance while actively advocating for the industry’s growth and development».
As the industry expands and adoption increases, it attracts talent from traditional sectors. This new wave of professionals, including those from finance and business operations, will significantly contribute to the projects and the industry as a whole. The growth and maturation of the space are creating opportunities that not only supplement but are comparable to traditional jobs, marking a shift in the professional landscape as more experts enter the blockchain.
Disclaimer
In compliance with the Trust Project guidelines, this opinion article presents the author’s perspective and may not necessarily reflect the views of BeInCrypto. BeInCrypto remains committed to transparent reporting and upholding the highest standards of journalism. Readers are advised to verify information independently and consult with a professional before making decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Source link
