Many Optimistic Rollup solutions have ‘significant issues,’ protocol warns

A layer-two DAO protocol has warned that there are some “significant issues” with many of the most popular Optimistic Rollup solutions on the market.

As Ethereum continues to struggle with a long-running gas fee crisis, with spiraling transaction costs making the blockchain unusable for many DeFi enthusiasts, rollups have been touted as the silver bullet that will address scalability woes. 

Earlier in March, Ethereum co-founder Vitalik Buterin suggested that such a solution would serve as a sticking plaster until the long-awaited Eth2 upgrade delivers sharding — ensuring that the blockchain can scale by a factor of 100.

But according to Metis — a platform that says it is devoted to building up a technical and organizational structure for Web 3.0 — the debate may be more nuanced than this.

The project claims that the standard layer-two design is “usually very centralized” — duplicating a centralized structure from a single sequencer that relies on the verification mechanism to deter malicious players from engaging in fraudulent behavior.

To compound the problem, Metis says that it can often take a long time to finalize transactions through many layer-two solutions — and in some cases, such processes can take “many days.” In a fast-moving world where immediate settlement is essential, this could prove hugely impractical in the long run — creating yet another bottleneck because throughput will eventually be limited.

“We must allow the layer-two solutions to scale,” Metis co-founder Kevin Liu says.

What’s the answer?

Metis believes that its aggressive research and development into Optimistic Rollups (OR) can help deliver a technical solution that optimizes the process — eliminating these concerns.

To construct the foundation for the Web 3.0 economy, Metis defines several prerequisites for the infrastructure. It should be as decentralized as possible to avoid any single point of control or failure; as scalable as possible to support various decentralized businesses or applications running; as economical as possible to support large-scale operation and viable business models; user-friendly for builders and developers; and it should serve the real needs of businesses running on it.

These prerequisites enable Rollups to support a much broader scenario — the whole Web 3.0 economy — rather than only solving the issues of gas cost and transaction throughputs.

With the vision to backbone the Web 3.0 economy in mind, Metis has produced numerous innovations to make its rollup more robust than its predecessors. Those include supporting the operation of multiple virtual machines to avoid a throughput bottleneck; leveraging the InterPlanetary File System to protect sensitive data, lower costs, and increase efficiency; using layer-two Rangers to shorten the fraud-proof window that’s required for transactions; and providing a fully functional framework including smart contract templates, tools, and mechanisms for builders to easily plug in and build their own DApps.

“Metis Rollup is a better Rollup solution and a complete Web 3.0 development framework, especially for those who plan to leverage layer-two to run complex business logic,” Liu adds.

DAO as an infrastructure

For Metis, the goal is to ensure that individuals, communities, builders, and projects can take advantage of the low gas costs, high scalability, rich functionality, and simplistic user interfaces offered by its layer-two solution and build the future for Web 3.0. 

However, just as in the real world, companies and their related governance and management principles constitute the fundamental layer to support global business operations. In the Web 3.0 world, it is the DAO that backbones the running of various decentralized applications or businesses. Metis specifically defines the decentralized autonomous company (DAC) as a subset of DAOs, enabling business operations to be managed in an innovative new way. A DAC can deliver far more functionality than a typical DAO, which often provides little more than a voting mechanism for members of a community.

Metis Rollup also integrates the concept of DACs into its mechanism design to supplement the organizational infrastructure for the Web 3.0 economy. Metis has been focusing its efforts on ensuring that trust can be built up in DACs, so that a collective of individuals can achieve its goals — with collaborations seamlessly managed in a decentralized way.

One of Metis Rollup’s flagship solutions is Optimistic Governance, which aims to tackle this trust issue by leveraging staking bonds as a commitment to fulfill obligations, and using them to penalize defaults. This enables distrustful collaborators to build a reputation, confirming collaborative relationships and validating deliverables. The project has also been working to codify the key elements that will define an individual in the Web 3.0 world — with each individual’s Reputation Power and attributes recorded in the form of non-fungible tokens.

Looking ahead, Metis wants to empower individuals and communities to open and run businesses on the blockchain, with Metis Rollup providing support from the technical perspective and Optimistic Governance protecting users’ interests every step of the way. The project believes its approach will ensure that Ethereum can become a vital infrastructure for supporting value creation, far more effectively than a blockchain that merely facilitates payments.