Abstract
After successful completion of the Community Testing on the testnet (MIP-4 Proposal: Decentralize Testnet Sequencer and Activate Community Testing - Approved - CEG - Metis.io (ceg.vote)) we are ready to move to the next step and enable Decentralized Sequencers on the mainnet.
The purpose of this proposal is to establish and communicate governance procedures related to the Decentralized Sequencers.
Decentralized Sequencers
Presently, all Layer 2 network operators rely on a centralized Sequencer, exposing these networks to the risk of a single point of failure. Metis seeks to address this vulnerability by introducing a pool of Decentralized Sequencers.
The integration of our upcoming Decentralized Sequencer Pool with the existing decentralized peer-to-peer network of Verifiers and Block Producers represents the final stride toward achieving the ultimate decentralization of our L2 network. Once the Sequencer pool is operational, all network participation will be decentralized, allowing for a seamless and secure rotation of Sequencers. Additionally, the capability to expel malfunctioning or malicious entities ensures the perpetual stability of the network.
To apply to become a Sequencer you should be able to contribute to the Metis ecosystem by
- Having experience in operating blockchain nodes.
- Possessing servers and network environments that meet the requirements (see Metis Developer Documentation).
- Holding and locking a certain amount of METIS. The current lock-up threshold is 20,000 METIS, with a maximum of 100,000 METIS allowed for lock-up.
We will adjust the threshold and cap through governance based on how the pool operates. You can acquire METIS through the open market or by participating in the Sequencer pool’s mining activity by locking up METIS.
Governance Procedures
The following list of governance procedures covers a lifetime of the Sequencer - starting from proposing a Sequencer, covering onboarding, offboarding and situations leading to that, slashing cases and rewards.
Proposing a Sequencer
The Sequencer will be proposed using the Metis Governance forum located at https://ceg.vote. The proposal should be submitted using the Infrastructure proposals - Sequencer type. It will follow the process related to that type of proposal presented in the Governance Bluepaper - Roadmap (Governance (Proposal Types)). The proposal will be tagged as a “sequencer” proposal.
Voting procedures
Voting will happen on a Snapshot using the Infrastructure proposal type in the subject of the proposal.
Voting criteria
- A quorum requirement of
- 50k METIS tokens
- 500 or more wallet addresses participation
- 80% or more approval vote to pass
Onboarding/Offboarding
Onboarding and offboarding requests will be made by the members of the community using the Metis Governance forum. Accepted proposals will be voted upon using the Snapshot voting platform. As described in the Community Proposal Voting Process Flow (metis.foundation) the Governance Working Group will oversee Infrastructure proposals and reserve the right for the veto right on any Infrastructure proposals.
Onboarding
While reviewing the onboarding proposal the main criteria for evaluation of the Sequencer candidate are node operating experience and proven SLAs.
Onboarding of the Sequencer includes the following steps:
- Submit a proposal to become a Sequencer on the Metis Governance forum using the Infrastructure proposal type (Infrastructure proposals - CEG - Metis.io (ceg.vote))
- Template of the proposal
Title: Sequencer Proposal: [Project Name]
Executive Summary
This summary emphasizes the technical robustness and scalability of the project, demonstrating its capability to handle high-volume, high-speed blockchain transactions
- Information about the project, total staked or locked assets, clients, etc.
- Node operating experience
- References
Service Level Agreements (SLAs)
- Operational performance of servers, number of supported blockchains, API and servers uptime, server response times and so on
Benefits for Community (optional)
- Staking opportunities for Metis holders
Integration Roadmap
Official Links: Website, Docs, Audits, etc.
- Tag to be used is:
sequencer- Discussion period - 2-4 weeks
- Snapshot proposal
- Voting duration - 72 hours
- Pass the vote
- See Voting criteria above
Offboarding
Offboarding of the Sequencer can happen either automatically as a result of programmatic detection by the Sequencer client software of the slashable activity or be initiated by the Community on the Metis Governance forum using the Governance proposal type using the following steps:
- Submit a CVP proposal to offboard a Sequencer on the Metis Governance forum using the Governance proposal type (Governance proposals - CEG - Metis.io (ceg.vote))
- Template of the proposal
Title: Sequencer Offboarding Proposal: [Project Name]
- Project name, Snapshot link of approved proposal
- Accidents explanation: cases when Sequencer hasn’t met the requirements
Reason
- Offboarding reasons (slashing case(s)) as explained in Governance Proposal: Decentralized Sequencer Governance
Screenshots and Proofs
- Attach screenshots, proofs and explanations of accidents for offboarding
Official Links: Website, Docs, Audits, etc.
- The tag to be used is:
sequencer- Discussion period - no longer than 1 week
Note: If the offboarding proposal is initiated by the Sequencer team themselves due to the decision of termination of work or other reasons preventing them from fulfilling Sequencer duties there is no need for the Snapshot proposal and corresponding voting
- Snapshot proposal
- Voting duration - 72 hours
- Pass the vote
- See the Voting criteria above
Offboarded Sequencers can appeal using the information in the Impeachments/Appealing process paragraph.
Rewards/Mining Rate Adjustment
The Rewards/Mining Rate Adjustment mechanism is designed to incentivize participation and ensure the sustainability and efficiency of the Sequencers within the network. Adjustments to rewards or mining rates are crucial for balancing the economic model of the network, encouraging Sequencer participation, and maintaining network security. The Sequencer Operation Guide (see Metis Developer Documentation) introduces a mining rewards structure for participants, with an estimated Mining Rewards Rate (MRR) of 20%. The process for proposing adjustments involves the following:
- Adjustment Mechanism: The per-block reward amount is subject to updates to align the actual MRR with the targeted 20%. This would imply a dynamic adjustment mechanism that could be governed by performance metrics, network demand, and economic conditions.
- Governance Role: Adjustments in mining rewards are subject to governance oversight, where proposals for modification could be submitted by the community or designated working groups. Such proposals would undergo voting, reflecting the community’s consensus on the appropriate reward levels to maintain network health and competitiveness.
- Incentive Structure: The governance process for adjusting rewards would aim to balance the network’s security and efficiency with the attractiveness of being a Sequencer. It involves a careful analysis of lock-up requirements, operational costs, and the overall tokenomics of METIS.
Product/Operations parameters changing
Changes to Product/Operations Parameters are intended for the adaptive management of the network’s technical and operational aspects. This can include adjustments to transaction processing parameters, network configuration settings, and other operational variables that affect the network’s performance. Changing these parameters involves:
- Technical Updates: Proposals may arise to update system requirements, software configurations, or protocols to enhance Sequencer efficiency, and security, or to introduce new features. Such changes would require technical evaluation and testing, followed by community consultation and approval.
- Lock-up Requirements and Governance: Changes to the METIS token lock-up requirements for Sequencers, including adjustments to minimum and maximum thresholds, would directly impact the economic incentives for network participation. These changes would need to go through the governance process, balancing the need for network security with the desire to lower barriers to entry for new Sequencers.
- Operational Improvement: Updates to operational guidelines, including daily management practices and problem-resolution mechanisms, ensure that Sequencers operate effectively. Governance proposals might include enhancements to these practices based on evolving technological updates or lessons learned from network operations.
Slashing
The following is a preliminary identified list of malicious cases of bad actions or poor performance that can be done by a Sequencer node and a proposed slashing mechanism to address such behaviour. The default slashing behaviour is to remove the offending Sequencer(s) from the Sequencer pool immediately and then initiate a review process.
A separate Governance proposal will be submitted to vote on accepted slashing cases and their handling. The below information is presented for information only.
Should there be additional slashing rules we welcome the community to participate in identifying further cases and proposing modifications to identified ones through Governance proposals.
Low Severity
Slow Sequencers
Sequencers with poor configuration or network conditions may produce blocks slowly, causing performance issues for the network. These nodes will be contacted and encouraged to upgrade their configuration. If a Sequencer falls behind, it cannot pack blocks and will not receive rewards.
Medium Severity
Non-Block Production and Reelection
If a Sequencer does not produce a block for more than the configured threshold (currently 60 seconds), reelection will be triggered by another node. The node then proposes a reelection, and other sequencers vote on whether to initiate a reelection. This will include the proposal and signature records of the â…” majority of sequencers. The reelection would be detected programmatically and acted upon programmatically.
High Severity
Multiple Node Outages
If multiple nodes go offline at the same time, and they are all malicious, they should be punished more severely. This includes nodes that represent close to â…“ of the total number of Sequencers. The case would be detected and acted upon programmatically. Additional penalties will be determined by the community through a Governance proposal.
Critical Severity
Malicious Execution Result Modification
If a node modifies the execution result of a block, it will fail validation by other Sequencers. This will cause a halt in its block production and interrupt the current epoch. This triggers a re-election process. The node will then be forced to produce a new block with the correct execution result. The case would be detected and acted upon programmatically.
Undefined Severity
Sandwich Attack
Transaction ordering manipulation, also known as sandwich MEV, is generally not allowed. We encourage the community to identify and report sandwich attacks on the Governance forum. Specific reward and punishment mechanisms will be proposed in a separate proposal.
Slashing rules
Programmatic bad action handling is coded into the Sequencer client software and when these cases are detected, the Sequencers would:
- Slash X% amount of the Sequencer’s stake depending on the offence
- [if applicable] Blacklist the Sequencer from running a node
- [if applicable] Kick the Sequencer out of consensus
| Severity | Slashed Percentage | Jail | Remove (For entity running a Sequencer, not address) |
|---|---|---|---|
| Low | N/A | N/A | N/A |
| Medium | 1/16 | 5 days | Removed after 3 triggers. Can re-apply using Governance proposal |
| High | 1/8 | N/A | Removed. Can re-apply using Governance proposal |
| Critical | 1/4 | N/A | Removed. Can never join |
Impeachments/Appealing process
Slashed Sequencers can gather evidence and arguments and appeal the slash on a Metis Governance forum using the Governance proposal type. Metis Foundation and Community can decide whether or not to refund the slashed tokens and reinstate the Sequencer.
In some cases, the affected Sequencer may apply for a reward reimbursement.
Slashed Token Handling
The slashed tokens would be locked for a year and then released into the treasury.
LST pairing
The Metis team has set up a process in which node operators may be paired with Liquid Staking Tokens protocols, opening the door for the staked tokens to come from users. For more details check Infrastructure - LST proposals forum folder.
