Mantle: The rising L2 star

The Myth and Facts

Jul 28, 2023

The 23rd edition of Gems Corner centres on Mantle: The rising L2 Star, plus a couple of actionable insights.

The Mantle Network is a Layer 2 blockchain incubated by the BitDAO team. Like Optimism and Arbitrum, it is also built using Optimistic Rollup technology. It also enhances its network throughput and scalability through modularization, its own Data Availability Layer (DA), a decentralized sequencer, and other advantages.

The benefit of this type of Layer 2 is that it can share network security with the Ethereum mainnet, reduce transaction fees through modular "compressed blocks", and increase the total throughput of transactions on the chain.

Mantle differs from other L2 solutions in the following ways:

Modularized data availability: Using EigenLayer, Mantle can achieve higher transaction throughput beyond traditional L2s. The accessible data availability also means Mantle can improve throughput without compromising security or reducing validator overhead, minimizing processing demands and promoting decentralization.

Multi-party computation (MPC): Mantle uses MPC to minimize trust risks in L2 execution results. Using threshold signature schemes (TSS) technology, dedicated nodes contribute multi-party signatures to improve the correctness of chain-down transactions. This enables shorter challenge periods for withdrawals.

Decentralized Sequencer: Mantle will decentralize its Sequencer to provide a secure and trustless block production. By rotating a permissionless sequencer set, Mantle will reduce the possibility of single points of failure or censorship on the network.

Relationship to BitDAO, token & treasury

BitDAO has rebranded to Mantle with plans to build an ecosystem on its Layer 2 solution. BitDAO's $BIT token has been converted to the $MNT token at a 1:1 ratio.

Details: Link

Some key points about its updated treasury and tokenomics:

Mantle was incubated by BitDAO which has a $2 billion treasury fund, ranking among the top 3 DEFI treasuries.

The $MNT token will be used for governance, node staking, and potentially as collateral on the Mantle ecosystem.
3 billion $BIT tokens were destroyed during the token conversion, resulting in a 30% decrease in total token supply - a deflationary move. However, only 51% of $MNT tokens are currently in circulation.
Mantle has proposed a $200 million ecosystem fund over 3 years to develop 40+ projects. $100 million will initially come from the BitDAO treasury.
Mantle has proposed allocating 200,000 ETH for staking and ecological development. A Mantle Economic Committee will decide how to distribute treasury funds.

$MNT Token Allocation?

Currently, there are no formal discussions on macro goals or restrictions on the MNT token allocation. The core contributor team has only provided estimates on potential priorities.

In summary, the MIP-22 proposal discusses key aspects of the MNT tokenomics like the token design, conversion ratio and allocation priorities. The actual macro goals and restrictions will likely be determined through further governance discussions and proposals. The key focus currently seems to be incentivizing users, partners and core contributors through the allocation of MNT tokens.

Foxi’s Bullish Thesis on Mantle:

1️⃣ Modular Solution 2️⃣ LSD narrative 2️⃣ Cool Tech 3️⃣ Billion Treasury 5️⃣ $MNT token

Check out the thread for more details!

Ecosystem Overview:

Final thoughts:

Mantle aims to stand out by using a combination of approaches - optimistic rollups, EigenLayer modular components for data availability, multi-party computation and a more decentralized sequencer - to improve transaction throughput and lower costs. However, it remains to be seen how effectively these solutions will work in practice. In terms of ecosystem, most current dApps on Mantle are gaming-focused with few DeFi or infrastructure products. Major Ethereum protocols have yet to integrate with Mantle.

The key to Mantle's success will be its ability to deliver on its technical promises while capitalizing on the growing demand for LSDFi solutions.

This article was written by Foxi, follow him on Twitter here