TVL Grows $600 Million in Two Weeks, Surpassing Base—What Hidden Issues Lie Behind Metis' Rapid Growth?
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TVL Grows $600 Million in Two Weeks, Surpassing Base—What Hidden Issues Lie Behind Metis' Rapid Growth?
The surge in Metis TVL is largely attributed to the token price increase and the Grants program.
Navigating Web3 tides with focused insightsAuthor: Aleks Gilbert, DL News
Translation: Felix, PANews
Key Takeaways
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Over the past week, the value of cryptocurrency bridged to Metis reached around $700 million, surpassing popular competitors such as zkSync and Base.
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Metis’s DeFi ecosystem has developed much more slowly.
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Metis’s surge followed the announcement of a new Grants program.
Since December 20, Metis’s network TVL has increased sevenfold, ranking third among Ethereum Layer2 networks. However, this seemingly rapid growth in TVL is not due to users rushing to adopt a blockchain launched back in 2021, but rather driven by the rise in METIS token price and a newly announced Grants program aimed at incentivizing developers to build on the blockchain.
On December 18, Metis announced it would allocate 4.6 million Metis tokens—worth nearly $400 million at January 4 prices—into a Grants program to attract developers.
Blockchain data shows that on December 20, Metis minted 4.6 million METIS tokens on the Ethereum network. Two minutes later, 4.4 million were transferred to Metis. These tokens are now worth approximately $380 million, equivalent to half of Metis’s TVL.
This move by Metis highlights how popular metrics like TVL—the value of cryptocurrency stored on a blockchain or blockchain application—can be easily manipulated or create an illusion of sudden popularity.
To be sure, interest in Metis has surged since the Grants program was announced. The number of crypto wallets using Metis has more than doubled over the past two weeks, reaching 6,500. This suggests protocols can still attract capital through ecosystem development funds rather than via airdrops.
Metis’s Grants program is set to begin distributing tokens at some point during the first quarter of this year.
According to L2BEAT data, on December 20, Metis’s network TVL exceeded $100 million, just entering the top 10 among Ethereum Layer2 networks. By December 21, TVL jumped to $229 million. Today, more than $700 million in cryptocurrency has been bridged to Metis—less than Arbitrum and Optimism, but more than Base.
Despite the impressive TVL, relatively few people are actually using the Metis blockchain.
According to DefiLlama data, of the $680 million bridged to Metis, only $80 million has been deployed into its DeFi ecosystem, with half of that amount going to the lending protocol Aave.
Metis’s DeFi ecosystem TVL surpassed $80 million this week
This ratio is significantly lower across other top-five Layer2 networks.
For example, of the $9.8 billion in cryptocurrency bridged to Arbitrum, nearly one-third (about $2.9 billion) has been allocated to its DeFi ecosystem.
While half of Metis’s TVL comes from newly minted tokens, most of its growth also stems from the surge in its Metis token (METIS), which has risen over 200% since December 20.
Moreover, according to DefiLlama data, since December 20, while the total value of cryptocurrencies (including METIS) in the Metis ecosystem has increased by 87%, the amount of METIS tokens in its DeFi ecosystem has decreased by 40%.
Metis isn’t the only Layer2 blockchain experiencing explosive growth this month. Manta Network, launched in September 2023, saw its TVL grow by 1,250% in December.
The growth in Manta Network’s TVL came from airdrop farmers who used the Manta blockchain hoping to qualify for future airdrops.
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