[RFC] Metal L2: Bridging TradFi and DeFi Through Uniswap V3

Requests for Comment
1

Overview

Metal L2 is a banking-focused Layer 2 blockchain built on the Optimism Superchain, designed to enable direct on-chain fiat deposits through its connection to The Digital Banking Network—an open-source blockchain banking protocol developed by Metallicus. As one of the first chains to initiate the transfer of keys to the Optimism Foundation as part of its journey to Stage 1, Metal L2 demonstrates a strong commitment to decentralization while acting as a critical bridge between regulated TradFi institutions and DeFi.

This unique positioning offers Uniswap the opportunity to connect to The Digital Banking Network by deploying on Metal L2, creating a seamless gateway for TradFi fiat to flow into DeFi.

Metallicus

San Francisco based Metallicus, founded by Marshall Hayner (CEO) and Glenn Marien (CTO), who have been involved in blockchain technology since 2009. Marshall built the first Bitcoin wallet for Facebook, while Glenn created the first Dogecoin wallet, experiences that have shaped their approach to innovation in the space. Marshall also continues to contribute to Dogecoin in his role on the Dogecoin Foundation.

In 2018, under their leadership, Metallicus launched Metal Pay, one of the first regulated crypto payment applications in the United States, often referred to as “The Venmo of Crypto.” alongside their unique Proof-of-processed-Payment mechanism powered by MTL. Their focus on compliance and institutional adoption has been central to Metallicus’ success, leading to Federal Reserve FedNow Certification and the development of blockchain banking solutions that meet key requirements like Anti-Money Laundering (AML), Know Your Customer (KYC), and compliance with ISO 20022 and Bank Secrecy Act (BSA) standards.

This dedication to compliance and innovation has been a key factor in Metallicus’ success in bringing traditional financial institutions on-chain.

Through The Digital Banking Network, Metallicus has onboarded a rapidly growing network of on-chain credit unions and financial institutions across the United States and internationally. At the heart of this network are Metal Pay and Metal Pay Connect, fiat onramp solutions that make it easy for any DApp or business to offer their customers a seamless way to move fiat on-chain. These products enable users to onramp funds quickly and securely using traditional payment methods like debit and credit cards. Metal Pay and Metal Pay Connect currently serve more than 800,000 user accounts, with expectations for a 10x growth by 2027, underscoring the rapid adoption of this interconnected ecosystem.

The Digital Banking Network itself is built on three interoperable chains: Metal Blockchain (Layer 0), XPR Network (Layer 1), and Metal L2 (Layer 2). These chains form the foundation of a universal banking protocol that bridges traditional finance and blockchain technology, ensuring seamless integration while maintaining full regulatory compliance.

Also part of The Digital Banking Network are WebAuth Wallet, an advanced non-custodial crypto wallet that gives users secure access and control over their digital assets, and Metal X, a fully featured DeFi trading and lending platform.

This network represents the culmination of Metallicus’ founders’ vision: to create a universal banking protocol that allows traditional financial institutions to seamlessly integrate with blockchain technology while maintaining their regulatory compliance. By enabling fiat-to-crypto capabilities at scale, The Digital Banking Network is transforming how institutions and individuals interact with decentralized finance.

MTL Token

The native MTL token, established in 2017, stands as one of the earliest and most actively traded tokens in the cryptocurrency space. As one of the first tokens to be listed on major centralized exchanges like Binance, Bittrex, and Coinbase, MTL has maintained consistent market presence and liquidity. The token currently generates over $66 million in daily trading volume across centralized exchanges alone, demonstrating remarkable market depth and trader interest. This substantial trading activity positions MTL among the most liquid tokens in the space, providing a strong foundation for DeFi integrations and institutional adoption.

Metal L2

Metal L2’s journey began with the MIP-001 proposal, which outlined the vision for joining the Optimism Superchain and connecting Metal’s TradFi network into Ethereum’s DeFi ecosystem. Following unanimous community approval, Metal L2 achieved one of the fastest mainnet deployments in the space, launching on March 29, 2024. Demonstrating strong commitment to decentralization, Metal L2 has already initiated the process of transferring keys to the Optimism Foundation, marking significant progress on its path to Stage 1 of the Superchain vision.

The ecosystem’s rapid growth is evidenced by two major protocol deployments already secured through successful DAO proposals. Velodrome, the largest native DApp on Optimism with over $9.2 billion in historical trading volume, has committed to deploying their MetaDEX on Metal L2 and the Metal DAO has committed to 1,020,000 MTL for voting incentives. Their proven track record of bootstrapping liquidity across the Superchain, including successful deployments on Mode with $4.5M TVL pre-incentives, positions them as a crucial piece of Metal L2’s DeFi infrastructure.

Following Velodrome, Ionic Protocol – the largest native money market for yield-bearing assets on Mode Network with over $300M in TVL and 100,000+ users – secured approval for deployment on Metal L2 along with 275,000 MTL for voting incentives. Ionic’s expertise in managing deep lending pools with advanced capital efficiency mechanisms will provide essential DeFi infrastructure for institutional participants. Their unique cross-chain lending capabilities, allowing users to supply on one chain and borrow on another, align perfectly with Metal L2’s vision of bridging TradFi and DeFi.

These rapid developments and successful proposals from major DeFi protocols demonstrate strong ecosystem confidence in Metal L2’s vision. The sequential deployment of Velodrome’s MetaDEX followed by Ionic’s lending protocol creates a foundation for sophisticated DeFi activities, particularly appealing to institutional users seeking robust, tested infrastructure.

Unanimous Approval for Uniswap V3

The Metal DAO community recently reached a significant milestone by optimistically approving the proposal to integrate Uniswap V3 on Metal L2. This vital proposal reflects the community’s commitment to establishing Metal L2 as a central hub for seamless DeFi and TradFi interactions. The proposal, facilitated by Oku—a team that has conducted nearly two dozen Uniswap V3 deployments across major networks like Base and Binance Smart Chain since their launch in July 2023—demonstrates Metal L2’s commitment to working with experienced, proven partners.

The Metal DAO has committed substantial resources to ensure the successful launch and adoption of Uniswap V3 on Metal L2:

  1. A Liquidity Bootstrap Program allocating 250,000 MTL tokens to seed critical trading pairs:
  • ETH/USDC Pool: $100,000 worth of liquidity
  • MTL/ETH Pool: $150,000 worth of liquidity

These pools will be managed by Metallicus Inc. and maintained for a minimum of six months.

  1. An additional 250,000 MTL tokens allocated for liquidity incentives, strategically distributed across key trading pairs:
  • MTL/ETH (0.30% fee tier): 20% of incentives
  • MTL/USDC (0.30% fee tier): 20% of incentives
  • MTL/XMD (0.30% fee tier): 20% of incentives
  • ETH/USDC (0.05% fee tier): 20% of incentives
  • ETH/XMD (0.05% fee tier): 20% of incentives

Notably, the inclusion of XMD pairs anticipates the upcoming deployment of Metal Dollar (XMD) on Metal L2. Metal Dollar represents a significant innovation in the stablecoin space—a reserve-backed stablecoin basket that enables seamless movement between various stablecoins. This addition to the Uniswap V3 ecosystem will provide traders with enhanced stablecoin liquidity and flexibility, further strengthening the bridge between traditional finance and DeFi.

The integration includes comprehensive technical implementation through Oku, encompassing contract deployment, verification, backend integration, and the setup of critical trading infrastructure including limit order functionality. This thorough approach ensures that users will have access to the full suite of Uniswap V3’s advanced trading capabilities from launch.

The ecosystem’s growth momentum extends beyond Uniswap V3, with major protocols already committed to deployment. Velodrome, a leading DEX on Optimism, is scheduled to deploy their MetaDEX this month, while Ionic Money Protocol has confirmed their launch immediately following DEX deployment. These rapid developments showcase the strong momentum and growing ecosystem interest in Metal L2 as a bridge between institutional finance and DeFi.

Benefits to Uniswap

The deployment of Uniswap V3 on Metal L2 offers a unique opportunity to connect with The Digital Banking Network (TDBN), a global network of on-chain financial institutions. This integration brings entirely new fiat onramp capabilities. By allowing fiat to move directly on-chain from customer bank accounts—without relying on debit or credit cards—users can onboard funds seamlessly, reducing fees and making it more cost-effective to convert fiat to crypto.

Metal L2 also opens the door for Uniswap to capture institutional trading volume through regulated channels. As the DeFi gateway for TDBN, Metal L2 provides Uniswap access to a growing network of financial institutions actively exploring compliant DeFi solutions. Backed by Metallicus’ deep banking relationships and comprehensive compliance infrastructure, Metal L2 offers Uniswap a compliant bridge to institutional capital, setting it apart from other Layer 2s.

The introduction of Metal Dollar (XMD) to Uniswap through Metal L2 further strengthens this value proposition. XMD, a reserve-backed stablecoin basket, addresses the institutional need for seamless movement between stablecoins, driving trading volume as institutions manage liquidity through XMD pairs on Uniswap.

Momentum within the ecosystem is building with the upcoming launches of Velodrome’s MetaDEX and the Ionic Money Protocol, which create a sophisticated DeFi infrastructure designed for institutional users. Metal L2’s integration with thirdweb is also helping mainstream companies connect their products to DeFi services, lowering adoption barriers. With an initial Total Value Locked (TVL) projection of $250 million and a target of $2.5 billion within the next year, the ecosystem is positioned for substantial growth.

By deploying on Metal L2, Uniswap gains a strategic advantage as it aligns its multi-chain strategy with an L2 tailored for regulated institutional access. This integration bridges the gap between traditional finance and DeFi, offering a compliant pathway for institutional capital while preserving Uniswap’s decentralized principles.

Bridge Infrastructure

Metal L2’s bridge infrastructure ensures secure and efficient cross-chain connectivity through multiple battle-tested solutions. The network utilizes Hyperlane and SuperBridge for general message passing, while Metallicus TDBN provides specialized infrastructure for regulated institutional transfers. Additionally, integration with Across Protocol is scheduled for the near future, further enhancing cross-chain liquidity options.

Request for Support: Incentive Matching

To ensure the successful adoption and growth of Uniswap V3 on Metal L2, we respectfully request the Uniswap DAO to consider supporting this deployment with a comprehensive onboarding package consisting of:

  • $250,000 in liquidity incentives for a three month period.
  • Angle Merkl integration (€20,000) for incentives distributions.

The Metal DAO has already demonstrated its commitment by approving:

  • 250,000 MTL tokens for liquidity bootstrapping across key trading pairs @ $1.63 USD
  • 250,000 MTL tokens for incentive programs @ $1.63 USD
  • Full integration costs including Oku’s deployment and maintenance fees

The proposed combined incentive pool would be strategically allocated to ensure deep liquidity in critical trading pairs:

  • MTL/ETH (0.30% fee tier): Facilitating efficient token price discovery
  • MTL/USDC (0.30% fee tier): Supporting stablecoin trading pairs
  • MTL/XMD (0.30% fee tier): Enabling institutional stablecoin basket trading
  • ETH/USDC (0.05% fee tier): Providing core asset liquidity
  • ETH/XMD (0.05% fee tier): Supporting institutional stablecoin operations

This request aligns with Uniswap’s Proposal 59 framework for supporting new V3 deployments while offering unique advantages:

  • First L2 with direct connectivity to regulated financial institutions through TDBN
  • Strategic positioning for capturing institutional DeFi market share
  • Integration with the innovative Metal Dollar (XMD) stablecoin basket
  • Strong ecosystem momentum with Velodrome and Ionic Money Protocol deployments

Metal L2 represents a unique opportunity for Uniswap to establish itself as the primary DEX for compliant institutional DeFi trading, supported by Metallicus’s extensive banking relationships and regulatory infrastructure.

Timeline and Implementation

The Uniswap V3 deployment on Metal L2 has already been initiated through our Request for Comment (RFC) posted on December 3, 2024. All contracts have been deployed and verified by GFX Labs, requiring no additional technical actions from the DAO.

A key component of our rollout strategy includes integration with Metal Pay Connect, a comprehensive fiat on-ramp solution that enables any DApp, business, or financial institution to compliantly offer digital assets to their customers. This infrastructure allows users to get on-chain quickly and efficiently, providing Uniswap V3 with direct access to a growing user base through regulated channels.

Implementation Schedule:

  • Q4 2024: Contract deployment and verification (Completed)

  • Q1 2025:

    • Launch of liquidity bootstrap program (250,000 MTL)
    • Activation of incentive programs
    • Integration with Metal Pay Connect for fiat on-ramp
    • Deployment of Metal Dollar (XMD) pairs

  • Q2-Q3 2025: Continuation of liquidity mining program and ecosystem expansion.

All core Uniswap V3 contracts are deployed and will be subject to Ethereum Layer 1 Uniswap Protocol governance and control.

Deployment Details

Please refer to this post for the Metal L2 Application for Canonical Uniswap V3 Deployment. As is the case with all canonical v3 deployments, this deployment will be subject to Ethereum Layer 1 Uniswap Protocol governance and control.

Stakeholders

  • Proposal Sponsor: Metal DAO
  • Technical Deployer: GFX Labs through Oku
  • Core Developer: Metallicus Inc.
  • Target Chain: Metal L2
  • Bridge Infrastructure:
    • Hyperlane
    • SuperBridge
    • TDBN
    • Across Protocol (upcoming)

We look forward to working with the Uniswap community to bridge the gap between TradFi and DeFi, creating a compliant and efficient trading environment for both institutional and retail users. Together, we can establish Metal L2 as the premier destination for regulated institutional DeFi activity on the Optimism Superchain.

Thank you for your consideration.

Metal DAO

4 Likes
2

Hi Folks, thanks for your proposal. I don’t really know anything about the Metal DAO, where can we find out more information?

3

Hi all, thanks for the proposal. Can the Metal team provide more information about the chain’s state? Currently, the chain appears to have quite a low TVL (<$300K).

Has there been significant adoption across the other Metal Chains (Metal Blockchain (Layer 0), XPR Network (Layer 1))?

It sounds like Velodrome and Ionic have already provided incentives to deploy. Are there other DeFi protocols (Lending, Perpetual, etc.) that aim to support the ecosystem?

4

Hi there, we echo the other Delegate’s questions and based on L2 Beat the chain has very little TVL and very low activity.

We are also not supportive of spending DAO funds on incentivising liquidity for native-token pools (MTL).

Overall, assuming L2Beat data is correct we unfortunately can’t justify spending incentives just yet

5

A little about Metal DAO which was formed in 2017 and one of the first ERC20’s launched on Ethereum. You can find MTL available on all the most popular global exchanges such as Binance, Upbit, Bybit, Kucoin, etc. Metal DAO was created with the vision of decentralizing fiat ramp access to the blockchain and bridging credit unions, banks and FIs to blockchain. Metal L2 is part of Metallicus Digital Banking Network (TDBN) which is planned to launch next year. Currently in the Metal stack:

  • Metal Pay - Buy, sell and trade crypto with credit, debit card live and licensed in US, AU, NZ (EU and Asia coming soon) metalpay.com
  • Metal Pay Connect - Fiat ramp API and SDK, integrate Metal Pay into any fintech platform or dApp metalpay.com/metal-pay-connect
  • Metal X - Trade crypto on the XPR Network (Over $12m TVL in a boutique network without gas fees) metalx.com
  • Metal Dollar - Decentralized stablecoin basket managed by Metal DAO, coming soon to Metal L2 metaldollar.com
  • Loan Protocol - Decentralized lending protocol on XPR network $7m TVL metalx.com
  • Metal Blockchain - Layer zero blockchain for Credit Unions, Banks and FIs, built to launch private ledgers (subnets) that can talk to each other and connect with Metal L2 metalblockchain.org
  • WebAuth Wallet - Non custodial wallet built around the concept of bringing Web Authentication to every blockchain (currently available for: Metal L2, Ethereum, Metal Blockchain, XPR Network, with full Superchain support, BTC, DOGE, LTC, SOL, AVAX and more coming soon)

Metal L2 brings new fiat ramps to Uniswap and the Superchain, with the planned launch of TDBN instant banking access will be available directly to the Superchain through Metallicus network of Credit Unions, Bank partners and FIs.

One of the reasons TVL is currently low is because the first dApps have not launched yet. With the launch of the first dApps such as Oku, Velodrome, Ionic, and others we would like to see Uniswap connected to the Metal L2 network. We believe the services coming with TDBN solve a critical problem where companies struggle to get corporate bank accounts, and consumers are frequently debanked for crypto transactions. After TDBN the days of struggling to find a corporate bank partner or waiting for settlement will be over, solving one of the industries biggest problems. We believe bringing more fiat ramps to Uniswap and the Superchain is important, this is the value that Metal L2 and TDBN brings.

Read more about Metallicus here:

6

Thank you for this proposal @metal!

On the one hand, this could be an opportunity for Uniswap to expand into a regulated ecosystem that addresses an important area bridging TradFi and DeFi, and we appreciate the matching commitment and the thoughtful planning that has gone into this proposal. No doubt do we see the potential in this area.

However, we very much share the concerns regarding low TVL and activity, with around 20-50 daily active accounts according to the Metal L2 explorer. Additionally, while it is true that there is plenty of institutional “interest” out there and the probability of them turning that interest into real investments and involvement post the US election has gone up; it’s difficult to gauge how real this “demand” is when they’re “exploring” blockchain.

We get that the low activity is mainly due to the lack of apps available right now, and together with the “looseness” of the institutional demand, altogether it makes the proposal too much of a bet for us to feel comfortable in fully supporting it.