Mantle Network: New Forces in Layer 2 War

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What is Mantle Network?

Mantle is an EVM Layer 2 scaling solution built on top of the Ethereum blockchain, using optimistic roll-up technology. The difference between Mantle Network compared to many other blockchains lies in the three-layer modular architecture:

• Mantle to handle the execution

• Ethereum to handle settlement and consensus

• EigenLayer to handle data availability.

Mantle is a BitDAO product, which is a decentralized autonomous organization (DAO) established by the centralized exchange, ByBit, with the purpose of supporting and empowering developers in the cryptocurrency field.

In May 2023, the BIP-21 proposal was implemented and approved, leading to significant changes as BitDAO officially merged with Mantle Network:

• The BitDAO brand became Mantle.

• The governance model of BitDAO is also utilized to govern Mantle.

• The $BIT token of BitDAO is automatically converted to the $MNT token.

• Mantle inherited the entire treasury of BitDAO, valued at around $3.4B.

• Bybit had previously supported BitDAO and will continue to provide backing for Mantle.

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Mantle's Development Strategy

DeFi

At present, Mantle's Defi Ecosystem comprises over 30 projects and the count continues to rise. Recent additions to the ecosystem encompass KTX.Finance, Swapsicle, and LogX. Nonetheless, the majority of projects are still in the developmental phase and have made little impact.

One noteworthy instance is Agni Finance, an AMM-based DEX and launchpad with high capital efficiency, designed to bolster the Mantle Network ecosystem. Agni Finance presently holds the highest Total Value Locked among dapps, standing at $26m, which accounts for 64% of Total Value Locked on Mantle.

Liquid Staking Derivatives (LSD)

The development of Mantle as a key product reflects BIT DAO's ambition in the ongoing layer 2 battle. Unlike rivals concentrating on building DEX, Bridge, Lending, and Derivatives components firstly, Mantle aims to excel in the Liquid Staking Derivatives (LSD) segment.

The LSD segment has shown remarkable growth with Total Value Locked ETH LSDs approaching $20b and still in a steady uptrend.

Mantle LSD is a liquid staking protocol deployed on Ethereum Mainnet, fully governed by Mantle. Users, including the Mantle Treasury, can deposit ETH and receive yield-bearing mntETH receipt tokens. It aims to be the preferred solution for the liquid staking of ETH from the Mantle Treasury and Mantle Ecosystem supporters, reducing deposit acquisition costs.

On 25 July, Mantle further extended support to Pendle, a yield tokenization protocol, by providing an ecofund to build on the Mantle mainnet, highlighting Mantle's ambition in the LSDfi segment.

Summary

Mantle Network appears as a promising Layer 2 scaling solution containing a distinctive structure and a focus on the LSD segment. It benefits from a strong team and treasury, with the potential to considerably impact the Ethereum ecosystem. Nonetheless, discussing its success at this stage is premature, considering the high potential of other Layer 2 competitors.