Four Things You Should Know About Metronome Chainhops
As we rapidly approach the activation of Metronome’s chainhop capability (initially between Ethereum and Ethereum Classic), there are a few items Metronome community members should be aware of. Reflecting the ethos of the Metronome team itself, the average Metronome user is among the most detail-oriented in the crypto community, so some of this might be a BFO (“blinding flash of the obvious”) to many of them. Nevertheless, it makes sense to outline some aspects of handling Metronome in a new, multi-chain world.
1: You need to pay underlying fees when transacting on a network
While many community members and other cryptocurrency users already know this, a user must pay network fees in a given network’s native token even when using an ERC20 style token on that network. The same is true of Metronome. To send MET from one Ethereum address to another, one must pay a small fee in ETH, which is awarded to the miner who mines the block containing their transaction.
Similarly, MET on Ethereum or Ethereum Classic — unless otherwise ported to a new chain — will behave like a token on that network. This means it is important to consider the network when sending MET to address(es). To send MET to an address on a different network, an owner must port to that network first.
2: At this stage of chainhop capability, you need ETH and ETC to pay the fees on export and import of MET
As the process of exporting and importing MET requires a transaction on one network and one transaction on another, fees must be paid to both networks. This means any owner performing a chainhop function needs to have ETH and ETC in order to hop one way or the other. There is also a small fee in MET awarded to the Validator Network for validating chainhop transfers.
These network fees should be part of your consideration set when deciding where to hold your MET.
Also worth noting: To mitigate against doublespends and 51% attacks on a given network, validation time is 24 hours. This is to ensure an appropriate number of blocks have been confirmed on both the export and import chains. Learn more by reading the Validator document.
3: You need to understand how the Autonomous Converter determines price
Each set of Metronome contracts on a given chain (Jeff calls these “lily pads”) will have all the Metronome contracts the community is familiar with from their experience on the original set of Metronome contracts on Ethereum. This includes the Autonomous Converter. This contract is a convenient place to sell MET for the underlying token (e.g., ETH, ETC) or vice versa. However, users must know how the price is determined, particularly after the launch of a new contract set.
The price is determined by the balance of MET and the underlying token in the converter itself. A simplified Bancor algorithm determines the price based on the balance of the converter and the amount attempted to be sold. This means that the more the balance is offset, the greater the price slippage becomes. Autonomous Converters on new chains will take time to amass supply from auction proceeds and the MET sales into it, which will dampen price slippage.
The Metronome wallet, upon adding the amount a user wishes to sell to the converter, has an updated rate — please pay attention to this as all contracts are autonomous and the team has no control over the MET, ETH, or ETC in any of them.
4: You need to consider more than the initial hops on Ethereum and Ethereum Classic
What if you don’t wish to keep your MET on Ethereum or Ethereum Classic? Are there other options? Yes. The Metronome team is currently building and testing support for QTUM and RSK, and actively researching EOS and Cardano. Matthew Roszak has also noted research into other chains in recent presentations and interviews. Essentially, if a chain can support smart contracts, it can likely support Metronome contracts.
Update: Greater clarity