Is there still an opportunity in layer 2 — MetisDAO vs Loopring

Crypto Research

Some protocols try to provide a solution to Ethereum’s scalability problem on layer 2. There are two protocols with the lowest rate at the moment, Metis Network and Loopring which of them could be a good project for holding on to our wallet.

Fig. 1 Protocol fees. Source: https://l2fees.info/

MetisDAO Network

Based on the spirit of Optimistic Rollup, Metis is building an easy-to-use, highly scalable, low-cost, and fully functional Layer 2 framework (Metis Rollup) to fully support the application and business migration from Web 2.0 to Web 3.0. Metis integrates the Decentralized Autonomous Company (DAC) framework within its Layer 2 infrastructure, a differentiating factor that makes it easy for any developers, builders, or community leaders to build their applications and communities.

Loopring

An open protocol designed for the building of decentralized crypto exchanges. Loopring protocol seeks to keep the advantages of decentralized exchanges while reducing or eliminating their inefficiencies via innovative hybrid solutions.

Data on-chain

it’s the data from all blocks constituting a complete blockchain

The data for this article are from the end of May of 2022

Circulation (1D) LRC: Loopring shows a downward trend in coins/tokens traded during a day since last year. While Metis Network shows a small uptrend.

Fig.2 LRC circulation. (1D) Source: Santiment.net

Fig.3 METISDAO Circulation. (1D) Source: Santiment.net

However, the total number of wallets is on the uptrend with 37,854 wallets at the moment compared with other protocols the layer 2, like Metis Network which has 32,870.

Fig. 4 Total number of wallet LRC. Source: Dune Analytics.

Fig.5 Total number of wallet METISDAO. Source: Dune Analytics.

Transaction / Volume Traded per Day: How many tokens are traded each day. Average daily trading volume is an important metric because high or low trading volume attracts different types of traders and investors, For this case, Loopring shows an uptrend in a couple of weeks compared to Metis.

Fig. 6 Volume Traded per Day LRC. Source: Dune Analytics.

Fig. 7 Volume Traded per Day METISDAO.

Network Growth & Daily Active Addresses: Identifying which projects are creating new addresses and growing their network at a faster rate than their price is generally an excellent strategy to find buy opportunities, how show the data from LRC, on other hand, Metis does show good correlation between Network Growth & Daily Active Addresses.

Fig. 8 Daily Active Addresses (LRC). Source: Santiment.net

Fig. 9 Network Growth (LRC). Source: Santiment.net

Fig. 10 Daily Active Addresses (METISDAO). Source: Santiment.net

Fig. 11 Network Growth (METISDAO). Source: Santiment.net

■ Development Activity Metric: This allows you to compare projects that use GitHub for issue tracking and projects that do not use GitHub. METIS performs better on this metric compared to LRC.

Fig. 12 Development Activity Metric (LRC). Source: Santiment.net

Fig. 13. Development Activity Metric (METIS).

Holding crypto thesis.

Based on a recent research paper running from May 20, 2022.

I explain to you why Loopring is modestly undervalued based on on-chain data, such as Network Growth & Daily Active Addresses grow up, as a consequence, the Transaction / Volume Traded per Day in LRC is bigger than MetisDAO.

Ethereum’s migration to the proof of stake (or PoS) has already been done. The leading projects of layer 2 will take advantage of the others, one of these could be Loopring. The tokenomics is another good reason to invest in LRC because its circulating Supply is 97% of 1,374,513,896 Max. Supply, compared with MetisDAO Network's 45% of 10,000.000 coins, It’s generally an excellent strategy to find buy opportunities.

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