Mantle Network is a modular Layer 2 network compatible with the Ethereum Virtual Machine (EVM). It is incubated by BitDAO and uses roll-up technology and a decentralized data availability layer (Mantle DA) to provide high throughput, low fees and fast determination. comprehensive services while ensuring Ethereum-level security. Multi-party computation and decentralized sequencers are also used to enhance the security and decentralization of the network. The goal of Mantle Network is to provide the Ethereum ecosystem with a high-performance, low-fee, easy-to-use platform to facilitate mass adoption of decentralized applications.
1. Research points
1.1. Core investment logic
Mantle Network is an L2 extension solution based on Optimistic Rollup technology, which provides EVM compatibility and modular design. Its core investment logic is mainly reflected in the following aspects:
Mantle Network is incubated by BitDAO, a well-known DAO organization, so it has significant advantages in terms of technical team strength and financial support. This laid a solid foundation for Mantle to stand firm in the fierce Layer 2 competitive landscape. At the same time, Mantle has reached strategic cooperation with a number of top projects, which will help it quickly integrate into the Ethereum ecosystem and gather users and application scenarios. As the Ethereum ecosystem continues to develop and grow, Mantle can further open up huge market space. It can be said that Mantle has strong technical and financial backing, broad market prospects, and is building a win-win ecosystem, which is the key to its long-term investment value. In addition, from the perspective of asset allocation, Mantle Treasury holds a large number of mainstream digital assets, which provides it with stronger liquidity support and market-making capabilities, which is conducive to consolidating the price of MNT tokens. Compared with other DAOs that only hold governance tokens, Mantle's richer asset reserves also enable it to fully finance ecological construction. Mantle can use its asset advantages to establish ecological funds and attract high-quality projects. This is also a key support for Mantle's long-term development prospects as one of the important Layer 2 networks.
A sound governance mechanism is conducive to the long-term stable value appreciation of tokens. BitDAO, the organization behind Mantle Network, has taken various measures to improve the long-term stability and appreciation potential of its token economic model. For example, Bybit’s donation model has been changed, reducing the amount of donations in a fixed period and reducing token circulation; using governance theory to analyze the risk of treasury token inflation; learning from other L2 token models to control the increment to no more than 2% of the total amount, etc. These governance initiatives reflect that the people behind Mantle Network attach great importance to the team maintaining the value of tokens and are good at summarizing the experience of other successful cases. This also gives MNT tokens better long-term appreciation potential compared to crypto assets. It is foreseeable that as the ecosystem matures, Mantle Network will continue to improve its governance mechanism and formulate more policies to enhance the intrinsic value of tokens based on the collective wisdom of the DAO, which lays the foundation for MNT's long-term investment prospects.
Mantle Network's various operating mechanisms provide ways for MNT tokens to reduce circulation. Unlike other L2s that use ETH as Gas tokens, MNT tokens are regarded as the Gas tokens of the Mantle chain. With the stable development of the ecosystem and active interactions on the chain, MNT will be consumed steadily without the need for other artificial controls. is a stable deflation model. At the same time, through multiple token pledge scenarios, the circulation of tokens will be effectively reduced and the value of tokens will be increased. The economic model design of Mantle Network allows MNT to have a circulation reduction mechanism in many aspects, which provides support for its long-term investment value and is a core logic of MNT investment.
Mantle Network adopts a modular technology route, which reflects the forward-looking nature of its technology system. The functions of Mantle's components are clearly divided and a loose coupling design is adopted, which ensures the flexibility of the system and enables it to adjust components as needed to adapt to technical and business changes. For example, the data availability component EigenDA can be easily replaced with other storage solutions. Compared with the Monolithic architecture, Mantle's modular system is easier to update and iterate, and its security and stability are also higher. System problems can also be solved by upgrading individual components. , rather than requiring a comprehensive reconstruction. In addition, modularity also allows third parties to access or use only some functions of the Mantle system according to their needs, which expands the system's applicable scope and scenarios. This design concept is worth learning from other projects and is also the technical foundation for Mantle’s long-term investment value.
Mantle Network achieves ultra-high scalability that is difficult to achieve with other L2 networks. Mantle uses Optimistic Rollup and independent data availability layer EigenLayer to provide lower cost and faster transactions. This architecture is different from other Ethereum Layer 2 expansion solutions such as Cartesi, Loopring, Polygon, Arbitrum, etc. Although Mantle is not the only L2 solution that uses an independent data availability layer, its data availability layer MantleDA is decentralized, while other The data availability layer of the L2 network mostly adopts a centralized architecture. This allows Mantle to achieve true decentralization and high scalability. Through this technological architecture innovation, Mantle is expected to provide transaction performance and low-cost advantages over other L2 networks. This increased scalability will facilitate widespread adoption and competitive advantage. Therefore, Mantle’s ultra-high scalability is an important differentiating technical advantage and investment value point.
Mantle Network's security is built on Ethereum's powerful consensus mechanism and verification node set. Mantle's state and transactions are verified by Ethereum's verification nodes in the same manner as transactions on the L1 chain. In other words, the set of nodes that verify the security of Mantle transactions is consistent with that of Ethereum. This is different from other L2 networks that use their own consensus models. Mantle directly reuses the security model of Ethereum. Therefore, Mantle can inherit the strong security of Ethereum, and its security is not weaker than that of the Ethereum main network. This design that closely integrates the Ethereum security model gives Mantle unique advantages in security compared to other L2 networks. Higher reliability. This is a core competitiveness and investment value of Mantle Network.
1.2. Valuation
According to CoinGecko data, as of September 3, 2023, the $MNT token price was US$0.45, the market value was US$1.459 billion, the circulation volume was 3.234 billion coins, the total supply was 6.219 billion US dollars, and the full circulation market value was US$2.805 billion. After in-depth analysis and value assessment of the Mantle Network project, we believe that at the current stage $MNT the token has a certain degree of high valuation, but in the long term, if Mantle can realize its technical commitments and steadily develop the ecosystem, Fully reflecting its technological advantages, ecological potential and market space, its valuation will have room for improvement.
We will elaborate on Mantle Network's valuation analysis methods and basis in the subsequent report (6.2 Project Valuation Level). At the same time, we will continue to pay attention to its ecological development trends in order to adjust its valuation judgment in a timely manner.
1.3. Project risks
The risks currently faced by Mantle Network are mainly: competitive risks in the fierce Layer 2 competitive environment, technical security risks, risks in the early stages of project development, the negative impact of poor performance of BIT tokens on MNT, and the OP it represents. There is a risk that the technical direction of Rollup will no longer be supported by the community. For details on specific project risks, see 6.3 Project Risks.
2. Project Overview
2.1. Project business scope
Mantle Network is an Ethereum Layer 2 solution designed based on the Optimism OVM architecture. It adopts a modular design and attempts to use EigenDA as the data availability layer and Specular Network's fraud proof system to achieve transaction validity proof.
According to official information from Mantle Network, in addition to serving as an L2 expansion solution, providing high-speed and low-cost on-chain transactions, and establishing a sustainable public chain business model, its business scope mainly includes:
1) Mantle LSD (coming soon)
Mantle LSD is a decentralized staking service based on Lido, which allows users to pledge ETH to Ethereum 2.0 and obtain mntETH as a certificate. Mantle LSD aims to leverage the synergy of the Mantle Network ecosystem and become the preferred solution for ETH liquidity staking in the Mantle ecosystem. It can reduce Mantle's deposit costs and allow third-party applications to be used and expanded without permission. Mantle LSD also has a simple and secure system architecture that can utilize the existing capabilities of the Mantle ecosystem, such as community, governance, brand influence, etc., which is conducive to promoting the development of the Mantle Network ecosystem.
2) Mantle EcoFund
Mantle EcoFund is a US$200 million ecological fund provided by Mantle Treasury, co-investing with strategic investment partners at a 1:1 ratio. The main goal of EcoFund is to promote developer and DApp adoption on the Mantle network, while also taking into account the sustainability and returns of the fund. EcoFund will prioritize investing in teams building high-quality and innovative projects within the Mantle ecosystem, and will increase investment in potentially outstanding projects when appropriate.
3) EduDAO
EduDAO is a decentralized autonomous organization (DAO) that connects different university ecosystems to enhance collaboration and data exchange, cultivating a new generation of blockchain and Web3 innovators. EduDAO is funded by the BitDAO treasury and serves as an independent steering committee that allocates up to $11 million annually for project funding, research, and independent product development. EduDAO’s university partners include Berkeley RDI, Berkeley Blockchain, Penn Blockchain, Harvard Blockchain Club, MIT Sloan Blockchain Club, Michigan Blockchain, USC Blockchain, Oxford Blockchain Blockchain Association and Tsinghua University Student Blockchain Association. EduDAO’s goal is to develop the next generation of leaders and creators for the blockchain industry.
4) Game7
Game7 is a game accelerator whose goal is to advance the development of a permissionless and interoperable gaming world. Game7 provides key tools for game developers, such as NFT market, cross-chain bridging, game DAO, etc.
Game7 and Mantle Network are both projects incubated by BitDAO, and they have a close cooperative relationship. Game7 will use the infrastructure provided by Mantle Network to provide high-quality user experience and ecological interconnection for its incubated and invested game projects.
2.2. Team situation
2.2.1. Overall situation
As a Layer 2 network solution, Mantle Network is incubated and supported by the well-known DAO organization BitDAO. The original concept prototype for Mantle was proposed by Bybit CEO Ben Zhou and other prominent members of the crypto community, including Sreeram, Dow Jones and Cooper Midroni from EigenLayer. The team consists of more than 50 professionals from different fields and backgrounds, working under a flat management structure.
2.2.2. Team background
Mantle Network's founding background, resource commitments, future vision and other aspects are inseparable from the organization behind it, BitDAO. In order to fully understand the historical origins and development of Mantle Network, it is necessary to go back and explore the related history of its incubation organization, BitDAO. . Mantle and BitDAO can be said to be two components of one body. Mantle's success relies on BitDAO's strong resource support and common vision and goals.
1) BitDAO
BitDAO was founded in 2021 by Daniel Yan and Ben Zhou, co-founders of Bybit, a large crypto derivatives exchange in Singapore. The treasury assets come from fundraising and donations. In June 2021, US$230 million was raised in private financing, with investors including Founders Fund, Pantera Capital, Dragonfly Capital, etc. In August of the same year, BitDAO completed the auction through the BIT-ETH crowdfunding pool of SushiSwap's MISO platform and issued 2 100 million BIT, raising 112,670 ETH (valued at $360 million at the time).
BitDAO is one of the largest DAO organizations to date. Its DAO treasury manages assets worth approximately US$3.4 billion, mainly composed of BIT, MNT, ETH, USDC, and USDT.
The reason why BitDAO is so popular is inseparable from the contribution of Bybit, the backer behind it. As the largest supporter of BitDAO, Bybit promises to regularly donate 0.025% of its futures contract trading volume to the BitDAO treasury. Some public data shows that from July 2021 to June 2022, Bybit donated a total of more than 1 billion US dollars to BitDAO. Tokens, in June 2022, Bybit announced that it would continue to donate tokens to BitDAO regularly in the next four years, but the number of donations will gradually decrease. Specific daily donation information and announcements may need to be obtained through the BitDAO community announcement.
2) Ecological merger
In May 2023, BitDAO passed the BIP-21 proposal, completed the merger with Mantle Network, and unified the brand and token into Mantle (MNT). This establishes a larger ecosystem. The MANTLE ecosystem will inherit BitDAO's vision and obtain its funding and community support for the operation and ecological development of the Mantle network. BitDAO's token BIT is also converted at a 1:1 ratio. MNT. The merger of Mantle Network and BitDAO makes the new Mantle ecosystem the largest vault in the crypto industry, worth over $3 billion as of this writing.
It can be seen that Mantle has strong support from BitDAO and strong financial strength. Behind it is the centralized exchange Bybit’s exploration of decentralization, which is conducive to the future development of the Mantle network. At the same time, the unification of the token economy also integrates ecological resources. This It provides a strong guarantee for the further development of the project.
2.2.3. Core members
Arjun Kalsy: The ecosystem leader of Mantle Network. He is responsible for the project’s marketing and ecological construction. He is a successful blockchain entrepreneur and consultant, and was the Vice President of Growth at Polygon, responsible for the platform’s business development and ecological expansion. He has also participated in several major corporate collaborations, such as Reddit, Instagram and Disney. Prior to that, he was a client relationship manager at Playment, where he helped clients train high-precision artificial intelligence/machine learning computer vision models, with a focus on enabling applications in autonomous driving and transportation.
Joshua Lapidus: Mantle Network's strategic advisor, he is responsible for assisting the development and expansion of Mantle Network, as well as cooperation and interaction with other Web3 ecosystems. He is the current host of Unemployable, a podcast for freelancers, independent workers, and the self-employed. He also serves as a writer for BanklessDAO and is the founder of three successful NFT projects: NFTP’s Rainbow Rolls, ETHDenver’s BufficornBUIDLBrigade, and Public Nouns (a project forked from NounsDAO dedicated to providing public goods through creative ways funds).
Pranjal Bhardwaj: One of the co-founders of the Mantle Network project. Pranjal has worked in the encryption field for many years and served as a senior R&D engineer at Polygon before joining BitDAO. At BitDAO, Pranjal was in charge of its R&D team and participated in multiple projects incubated by BitDAO, including Mantle Network. In the Mantle Network project, Pranjal Bhardwaj serves as the technical leader, responsible for the design of underlying technologies such as blockchain and smart contracts. He is one of the key members of the Mantle Network technical team and played an important role in the design of the project's technical architecture.
Sreeram: Co-founder and CTO of Mantle Network and co-founder and CTO of EigenLayer. Sreeram is an experienced software engineer and architect who has been responsible for projects in distributed systems, big data, machine learning and other fields at companies such as Dow Jones and Cooper Midroni. He is the primary designer and developer of Mantle DA, focusing on providing an efficient and secure data availability layer.
Other members: Mantle Network’s team also includes many other outstanding engineers, designers, operators, marketers, etc., who are responsible for different aspects of Mantle Network, such as network development, contract writing, interface design, community management, and brand promotion. wait. Together they form the core strength of Mantle Network and contribute to the development and growth of Mantle Network.
2.3. Financing situation
As a project incubated by BitDAO, Mantle has not conducted independent public financing. Mantle was initially funded by Bybit, but after the BIP-19 proposal was passed, it was changed to be funded by the Mantle budget managed by BitDAO. According to the Mantle core budget address officially provided by BitDAO, its existing funds are more than 18 million US dollars.
2.4. Past development and roadmap
2.4.1. Past development
2.4.2. Current progress
According to information on its official website and forums, the main tasks currently underway or planned by Mantle Network include:
Improve and optimize the technical architecture and functions of Mantle Network, including EigenDA, MPC, decentralized sorter, etc.
Promote the ecological construction and partnerships of Mantle Network, including integration and support with the Ethereum protocol, cross-chain bridges, DeFi applications, GameFi applications, etc.
Publish and operate Mantle Network's own products and services, including LSD (Liquidity Staking Derivatives), EduDAO, Game7, etc.
Establish and manage Mantle Network’s ecological funds and treasury, including providing funds, resources and incentives to ecological projects and developers.
Enhance and expand the community and brand of Mantle Network, including organizing various activities and competitions, publishing various promotional and educational materials, establishing various social media and communication channels, etc.
2.4.3. Development plan and roadmap
According to the information on the project official website, the future development plan and roadmap of Mantle Network are as follows:
September 2023: The mainnet Beta version will be launched, providing more stable and reliable network services and supporting more DApps and protocols.
October 2023: Launch the EigenLayer data availability layer and inherit the security and decentralization of Ethereum by re-mortgaging ETH.
November 2023: Launch the multi-party computing function and use Threshold Signature Scheme (TSS) technology to improve the accuracy and privacy of off-chain transactions.
December 2023: Launch of decentralized sequencer functionality and provide secure and trustless block production by rotating a permissionless collection of sequencers.
January 2024: Launch the cross-chain bridging function and achieve interoperability with other L2 projects and public chains.
February 2024: Launch the NFT market function and support users to create, trade and display NFT on Mantle.
March 2024: Launch the DAO function and allow users to participate in Mantle’s governance and decision-making through $MNT tokens.
3. Project analysis
3.1. Project background
The emergence background of Mantle Network is mainly based on the following two aspects:
1) Market trend background
The birth of Mantle Network took place against the background of the rapid development of the Ethereum L2 field and the tightening of global supervision. With the continuous rise of DEX, there is an obvious trend of cryptocurrency trading volume migrating from CEX to DEX. However, the high gas fees and inefficient throughput of Ethereum L1 limit the development of DEX and DeFi. Therefore, L2 expansion solutions have become the key to solving this pain point. The Ethereum Cancun upgrade planned for November 2023 will significantly reduce L2 storage costs and further promote innovation and competition in the L2 field.
In addition, the wave of compliance has given rise to the efficient Layer 2 era. As regulatory agencies become increasingly strict on the use of crypto-assets, compliance has become an important issue in the blockchain industry. This has prompted many Layer 2 projects to adopt a token-free issuance model and make profits through gas fees and MEV income. The current mainstream Arbiturm and OP adopt a centralized sorter architecture. This efficient setup can not only enjoy the dividends brought by Layer 2, but also better cope with regulatory requirements. It is foreseeable that under the trend of compliance, asset-light Layer 2 networks will be deployed more quickly and form large-scale applications. This is almost a certain future for Layer 2 development. As a new generation Layer 2 network, Mantle is also facing the impact of changes in the regulatory environment. Adapting to compliance will be an external situation that Mantle needs to pay attention to. It will be launched together with other Layer 2 projects to jointly promote the arrival of the Layer 2 era.
2) Technical background
In the L2 rollup technology camp, both OP fraud proof and ZK zero-knowledge proof have their own advantages and disadvantages. Storage cost and computing cost are the challenges they need to face. In addition, most existing solutions use centralized sequencers, which can easily lead to single points. Fault. As an Optimistic Rollup solution, Mantle's key innovation lies in its modular network architecture design. Mantle can decouple and optimize different components such as transaction execution, data storage, and confirmation processes. This modular solution can improve network throughput and Scalable without compromising security, it also enables Mantle to achieve more cost-effective contract development and deployment. At the same time, in order to solve the problem of sorter centralization, Mantle Network plans to decentralize the sorter in the future and allow the community to participate in the operation and governance of the sorter, thereby improving the decentralization and attack resistance of the network.
In addition, the current OP fraud proof challenge period is 7 days, which means that users need to wait 7 days to withdraw assets from L2 to L1. This has a certain impact on user experience and liquidity. To solve this problem, Mantle Network plans to shorten the challenge period to 1 to 2 days by implementing multi-party computation (MPC).
3.2. Project principle
The core principle of Mantle Network is to use Optimistic Rollup to implement L2 expansion solutions. Optimistic Rollup refers to a technology that uses a fraud proof mechanism to ensure the security and synchronization between the L2 network and the L1 network. The basic principles of Optimistic Rollup technology are as follows:
1) Deploy a fraud proof contract on the L1 network to receive block hashes from the L2 network and provide a challenge and proof mechanism.
2) Run an execution layer on the L2 network to execute transaction requests initiated by users on the L2 network and update the status on the L2 network according to state transition rules.
3) Select a sequencer on the L2 network, responsible for collecting user transaction requests, packaging them into blocks in a certain order, and submitting the block hash to the fraud proof contract.
4) Run multiple validators on the L2 network, responsible for monitoring the block hash on the fraud proof contract, replaying the transactions in the block according to the state transition rules, and verifying their correctness.
5) If the verifier finds that there are incorrect or fraudulent transactions in the blocks submitted by the sequencer, they can launch a challenge to the fraud proof contract and provide corresponding evidence. If the challenge succeeds, the sequencer will be punished and erroneous or fraudulent transactions will be rolled back. If no one challenges the block submitted by the sequencer within a certain period of time, or the challenge fails, then the block will be considered valid and the transactions in it will be finalized.
Next, let’s compare the network architecture of Mantle Network:
Image source: Mantle Network official website DOC
According to the network architecture of Mantle Network, let us first briefly explain the operating process of its system:
1) When a user initiates a transaction or executes a contract on the L2 network, the transaction request will be sent to the sequencer, which will sort and package the transaction request into blocks according to certain rules.
2) Each block has a unique identifier, called the state root, which represents the L2 network state after the block is executed. The latest state root will be submitted to the multi-party computation (MPC) node for verification. The MPC node uses the threshold signature (TTS) algorithm to sign the state root to confirm its correctness. After the state root obtains the MPC signature, it will be submitted to Ethereum It is stored in the Fraud Proof Contract (SCC) on Fang L1 for future status verification and withdrawal operations.
3) When users want to withdraw assets from the L2 network to the L1 network, they need to wait for a period of time, called the fraud proof window period. This is to prevent sequencers or others from cheating or submitting incorrect transactions on the L2 network. If someone discovers an incorrect transaction, they can challenge the SCC contract within the window period and provide evidence. If the challenge is successful, the cheater will be punished and the incorrect transaction will be reversed.
4) In addition to the state root, each block also contains transaction-specific data, called CallData. While the state root is being verified, CallData will be compressed and submitted to a data layer on the L1 network, called Mantle DA, which is used to store transaction data on the L2 network. The data availability node of Mantle DA will sign the transaction data. , and put the signature certificate on the chain.
5) Other nodes can obtain transaction data from Mantle DA through the DTL service and verify and confirm it, which can enhance the security and reliability of the L2 network.
6) If users want to transfer assets from the L1 network to the L2 network, they need to complete it through the enqueue (call) method of the CTC (deposit contract). This method will put the user's assets into a queue, and then the sorter will Move to L2 network.
7) When the user wants to transfer money from L2 to L1, it needs to go through the message mechanism and be executed after verification by L1.
The Mantle system also has other contracts and roles used to implement different functions, such as verifying status, managing permissions, upgrading the system, etc. Moreover, its key operational roles are controlled by a multi-signature wallet, preventing single points of failure or malicious operations.
By comparing the operating principles of OP Rollup and Mantle, we can find that Mantle has made a series of innovations and optimizations based on OP Rollup technology, mainly including the following aspects:
1) Modular design significantly reduces transaction costs
Mantle adopts a modular network design and combines Optimistic Rollup with an independent data availability layer, which avoids the high Calldata cost of submitting all transaction data to Ethereum. (As transaction volume increases, this fee reaches 80-95% of the total fee, seriously restricting Rollups' cost efficiency.)
Mantle’s modular design handles the four key functions of a blockchain at different levels, rather than on one network layer like most single blockchains. These four functions are:
Transaction execution: performed on Mantle's EVM-compatible execution settlement layer. Mantle's sequencer generates blocks on the L2 execution layer and submits the state root data to the main blockchain.
Consensus and settlement: Responsible for the Ethereum L1 network.
Data availability: Implemented with the help of EigenDA technology. EigenDA is a data availability layer built on EigenLayer and used to store callback data that is usually broadcast to L1.
Data acquisition: Other nodes obtain transaction data from Mantle DA through the DTL service, and verify and confirm it.
The figure below shows an example of a modular chain design.
Image Source: Modular Chain Design: Celestia Docs
The modular design also makes it easier for Mantle Network to integrate new technologies. For example, the consensus mechanism can be replaced by zk-Rollup or zkEVM. At the same time, Mantle's modular architecture can significantly reduce transaction costs compared to the base layer. At the same time, due to the advantages of layering, it also improves the efficiency of the network, and through Optimistic Rollup, it also reduces the total load on the nodes.
2) EigenLayer achieves high-performance data availability
Mantle uses EigenLayer as a decentralized data availability layer solution. EigenLayer allows Ethereum verification nodes to participate in data availability guarantees by re-mortgaging ETH. The Mantle data availability layer is a data layer supported by EigenDA. It can store and transmit transaction data on the Mantle execution layer, which allows Mantle to inherit Ethereum. security without publishing all data to L1. At the same time, EigenLayer also provides high throughput at the level of 1TB per second. Compared with other L2 networks that only rely on centralized storage, EigenLayer's technical design significantly enhances Mantle's data availability and censorship resistance.
EigenLayer provides Mantle with highly secure and high-performance data availability support and is one of the key technological innovations of the Mantle network. This also gives Mantle a clear competitive advantage in terms of scalability and decentralization.
3) Multi-party calculation mechanism shortens fraud proof time
The Mantle network uses the multi-party computation (MPC) protocol, which is its key technological innovation to accelerate fraud proof and increase transaction speed. Mantle's verification node network adopts a multi-party calculation mechanism based on Threshold Signature (TSS), which allows a group of verification nodes to quickly reach consensus on transactions on Layer 2, generate state root information with multi-signatures, and then submit it to Ethereum. Compared with submitting transaction batches directly to Ethereum, this multi-party pre-verification method can significantly reduce the need for fraud proof and shorten the proof time to 1-2 days. Although multi-party calculation is not as reliable as zero-knowledge proof, the node pledge and penalty mechanism can ensure a certain degree of security while balancing costs. Overall, Mantle's multi-party computing protocol mechanism helps it achieve a better balance between transaction speed and security, and is one of its key innovations in achieving high throughput and low latency.
4) Decentralized sorter eliminates the risk of centralization
Enables decentralization of the sequencer, providing secure and trustless block production. The sequencer is the role in the L2 solution responsible for collecting transactions, calculating status and generating blocks, and is crucial to the security of the network. In traditional rollup schemes, the sequencer is usually a single centralized node, which is susceptible to failure, manipulation or censorship. Mantle replaces centralized sorters with a permissionless cluster of sorters, bringing the following benefits:
Improves the availability of the network, eliminates the risk of single point failure, and ensures the continuous operation of the network.
Improves the consensus reliability of the network, prevents manipulation or review by the sequencer, and ensures fairness and transparency of transactions.
Improves the incentive compatibility of the network, drives the compliance behavior of the sequencer through the reward mechanism, and ensures the long-term sustainability of the network. In contrast, centralized sequencers face a public goods dilemma.
The decentralized sorter itself improves the ability to resist attacks, and its trustless consensus enhances security. This is also an important step in the evolution towards complete decentralization.
To sum up, the decentralized sorter is one of Mantle's obvious advantages over traditional Rollup. It eliminates the risk of centralization and provides more efficient, reliable and secure block generation. This makes the Mantle network more robust and better protects user rights.
3.3. Project network nodes
There are currently four node roles defined in Mantle Network, namely ordering node, threshold signature scheme (TSS) node, rollup verification/replica node and data availability (DA) node. They each have different responsibilities:
1) Sequencer:
The sequencer is the role responsible for receiving and recording transactions sent by users on the L2 network, and packaging the transactions into blocks. The sequencer is also responsible for rolling up the transactions in the block, generating a batch containing the execution state root, and submitting the batch to the L1 network. The sequencer also needs to broadcast the block data to the entire network (L1 and L2). In the initial stage of Mantle Network, the sequencer is operated by the Mantle core team and is a centralized node. However, in the development roadmap of Mantle Network, the sequencer will gradually become decentralized, providing opportunities for other nodes to participate.
2) Threshold Signature Scheme (TSS) node:
The TSS node is the role responsible for "signing" the batches generated by the sequencer so that they can be sent to the L1 network. The TSS node needs to verify the state root generated by the sequencer to determine its correctness. The state root must be signed by the TSS node before it can be sent to Ethereum for recording. In the initial stages of the Mantle Network, TSS nodes will be operated by a group of reputable institutions, but will eventually be voted on without permission through the governance mechanism of the Mantle Network.
3) Rollup validator/replica node:
The Rollup validator/replica node is the role responsible for synchronizing Rollup data from the trusted sequencer of the Mantle network and validating the submitted state root on the L2 network. If validator/replica nodes discover invalid state data, they can initiate fraud proofs to reverse erroneous transactions. The validator/replica node is also responsible for providing Rollup data to users.
4) Data Availability (DA) node:
The DA node is the role responsible for storing and transmitting transaction data on the Mantle network and providing data availability services. DA nodes use EigenLayer as the data availability layer. It is a protocol based on ETH remortgage, which can ensure the security and efficiency of Mantle's data availability layer. DA nodes do not need to publish data to the L1 network, but to EigenDA secured by re-mortgaging ETH. Doing so can greatly improve throughput and scalability and allow new types of DApps to be built.
3.4. Project Ecosystem
The Mantle Network ecosystem is mainly reflected in ecosystem incentives, ecosystem applications and its planning in the LSD field.
1) Ecosystem incentives
Mantle has strong ecological assets, including more than 2 billion US dollars in funds including the BitDAO treasury, and a large user base, which has laid a solid foundation for the development of the Mantle ecosystem. At the same time, according to the latest news on August 28, the Mantle Network governance page shows that the Mantle community has recently launched a proposal to use Mantle Treasury to promote the development of the ecosystem, and plans to allocate US$238 million to promote the development of the ecosystem. The specific contents include: providing applications with Liquidity support of up to US$160 million, providing up to US$60 million in seed liquidity for RWA-backed stablecoins, and providing liquidity support of up to approximately US$18 million for third-party cross-chain bridges.
At the same time, the special relationship between Mantle Network and Bybit will effectively promote high-quality projects in the Mantle ecosystem to gain a broader user base and liquidity. As one of the world's entry-level cryptocurrency trading platforms, Bybit has a large user base. Excellent projects in the Mantle ecosystem have the opportunity to be discovered by more investors through Bybit's recommendations and listed for trading on the platform. Higher liquidity and wider investor recognition for the project will be beneficial to its long-term development, and a prosperous ecosystem will further enhance the value of the Mantle network. It is foreseeable that projects and assets in the Mantle ecosystem will benefit greatly from Bybit's traffic and resource advantages. This win-win situation will also continue to attract more high-quality projects to join Mantle.
These initiatives demonstrate that Mantle Network will rely on its strong treasury resources to vigorously support the prosperity and development of the ecosystem. Through liquidity incentives and ecological funds, Mantle will attract more high-quality applications to join its network and promote the formation of a virtuous cycle.
2) Ecological applications
Mantle Network has built a rich ecosystem, currently citing 119 projects on its ecosystem page, a few of which are still in the testnet stage. In terms of track breakdown, project parties and developers mainly focus on three parts: 38 DeFi categories, 27 infrastructure categories, 25 GameFi categories, and the rest are other categories, such as social networking, entertainment, tools, etc. The following are some representative projects in the Mantle Network ecosystem:
A. DEFI track
iZUMi Finance
iZUMi Finance is a multi-chain DeFi protocol that provides one-stop liquidity services (LaaS). The idea is that every token should receive better on-chain liquidity in an efficient and durable way.
UMi currently launches three on-chain liquidity products: LiquidBox, iZiSwap and iUSD.
iUSD is a USD-denominated convertible bond launched by iZUMi, which uses transparent on-chain funds managed by smart contracts and multi-signature wallets as excess collateral to support the value of iUSD.
FusionX
FusionX is a decentralized trading protocol designed to provide safe and reliable trading services for Mantle Network. This project was launched in 2022 by a senior blockchain team and is one of the earlier projects to join the Mantle ecosystem. FusionX adopts the AMM model, and users can perform liquidity mining, trading, lending and other operations. At the same time, it supports a variety of trading pairs, including ETH/WETH, MATIC and other ERC20 tokens, to provide users with liquidity. The characteristics of the project are: The efficient on-chain order book system can ensure the immediacy of transactions.
Symbiosis
Symbiosis is a cross-chain AMM DEX that brings together liquidity from different networks, including L1 and L2, EVM and non-EVM. Through Symbiosis, users can easily exchange any token between different networks. Symbiosis issued mUSD, an algorithmic stablecoin collateralized by Mantle ecological assets. This stablecoin can be exchanged for other assets in the Mantle ecosystem. A dynamic interest rate mechanism is adopted between mUSD and Mantle ecological assets to stabilize the price of mUSD.
B. Infrastructure
EigenLayer
EigenLayer is an Ethereum-based protocol that introduces a new cryptoeconomic security primitive called restaking. Rehypothecation allows ETH stakers in the consensus layer to choose to verify new software modules built on the Ethereum ecosystem, thus extending cryptoeconomic security (WJB has an in-depth research report on EigenLayer, interested readers can read it on their own). The link is as follows:
https://www.panewslab.com/zh/articledetails/5402965u1dvj.html
Python Network
Pyth Network is an oracle on the blockchain that can publish financial market data to multiple blockchains with high accuracy and low latency. Pyth Network's data comes from more than 80 primary data providers, including some of the world's largest exchanges and market makers, such as Jane Street, CBOE, Binance, OKX and Bybit. At the same time, it provides price data for a variety of different asset classes, such as U.S. stocks, commodities, and cryptocurrencies. Each price data is aggregated from prices from multiple data providers and can be updated multiple times per second. .
Biconomy
Biconomy is an open decentralized blockchain bridging platform. Its main functions include:
Cross-chain asset transfer: Supports safe and efficient digital asset transfer between different public chains, such as ETH, BTC, etc.
DApp Interoperability: Allow DApps to access resources on other multi-chains, such as contracts, data, accounts, etc., to achieve true cross-chain interoperability.
Development contract: Provides a contract library for cross-chain interaction, so developers can easily add cross-chain capabilities to their DApps.
C. Gamefi
Roboworld
Roboworld is a free-to-play card game where players can collect and trade unique robots as NFTs and use them to battle opponents. Players must strategically select and use cards featuring robots to outwit their opponents and achieve victory.
Chesslers
Chesslers is a Web3-based gaming platform that allows users to play chess and earn rewards. Chesslers is based on their staking protocol and can implement Web3 economic models on existing Web2 games. Users can bet and play high-quality skill-based games with real money or Chesslers tokens.
Age of Zalmoxis
Age of Zalmoxis is a game that combines historical authenticity, a compelling story, and mythological elements inspired by the legendary kingdom of Dacia (modern-day Romania). It is a third-person massively multiplayer online role-playing game (MMORPG) with NFT and GameFi mechanisms. It is based on the historical background of the ancient kingdom of Dacia, which successfully resisted the invasion of the Roman Empire until it was finally conquered by Emperor Trajan in two bloody wars.
What needs special attention to the Mantle Network chain game ecology is that Mantle, as a high-performance Layer 2 network, can provide the necessary high throughput and low gas costs for chain games, which is crucial to realizing the interconnected blockchain game vision. . Mantle inherited rich game ecological resources from BitDAO, including projects such as Game7 and HyperPlay, which laid the foundation for Mantle to attract game users and developers. Game7 provides many valuable tools and resources for blockchain game developers, such as web3.unreal plug-ins, etc., which help developers build blockchain games more conveniently. HyperPlay serves as a blockchain game store and asset exchange platform. Also helping to promote seamless in-game asset circulation, the Mantle ecosystem has gathered a large number of game projects and is still growing rapidly, which shows its huge potential in the gaming field.
We can find that Mantle provides strong support for blockchain games in both technical and ecological aspects, and is expected to promote blockchain games towards large-scale applications.
Overall, the Mantle Network ecosystem has obvious advantages and disadvantages.
Specifically, the advantages are reflected in:
The total number of Mantle ecological projects has reached 100+, which is comparable to other leading L2 networks.
The project covers multiple fields such as games, DeFi, and infrastructure, and the ecosystem is constantly growing.
There are some unique application scenarios, such as direct calculation, etc.
Ecological assets are strong and there are a series of incentive plans.
Good user experience, especially suitable for the development of chain game ecology
The main disadvantages are:
Compared with other L2s, Mantle has a shorter development time and its ecological construction is still in its infancy.
Mainstream protocols such as DAPPS on Ethereum have not yet been officially connected to the Mantle ecosystem.
The team background and financing scale are not as obvious as some L2 pioneers.
In addition to the DEFI category, the number of applications in other fields is still relatively limited.
The user base and TVL scale need to be improved.
Generally speaking, the number of Mantle ecological projects has reached a certain scale, but it is still in its early stages, and the degree of mainstream resource accumulation remains to be seen.
3) Mantle Network’s plan in the LSD field
From the official website planning and network architecture of Mantle Network, we can know that Mantle Network's LSD ecosystem is about to be launched and occupies an important position in its network architecture.
It can be seen from the Mantle vault that Mantle has a reserve of more than 220,000 ETH as its financial strength in the LSD field. The network is expected to carry out strategic cooperation with major top LSD protocols to jointly promote the development and application of LSD solutions based on the Mantle network, specifically:
A. Release Mantle LSD
Mantle plans to release a liquid ETH deposit protocol called Mantle LSD, which will be a decentralized protocol based on the Ethereum mainnet. Users can deposit ETH into the protocol to obtain equivalent mntETH tokens and earn mortgage income. This model leverages the strengths of the Mantle ecosystem, including its large initial deposit size and liquidity, as well as mntETH's diverse usage scenarios within the Mantle network.
B. Innovative ways to utilize mntETH
mntETH can be used directly in the Mantle network, which will greatly enhance the usage scenarios of mntETH and enhance its stickiness in the Mantle ecosystem. Mantle LSD's operating model can make maximum use of Mantle's established community, governance structure, brand influence and other resources, thereby reducing operating costs and risks.
C. Efficient overall governance
Mantle LSD will operate within Mantle's overall governance framework to ensure its long-term competitiveness and sustainability. At the same time, Mantle LSD’s simple system architecture will reduce complexity risks, making it easy to be accessed and compatible with other applications and ecosystems.
D. Strategic cooperation and DAO construction
In addition to the issuance of mntETH, Mantle will also carry out strategic cooperation with a number of top DeFi protocols to form a strong ecological synergy and jointly promote the development and application of LSD solutions based on the Mantle network. For example, Mantle has reached cooperation with Lido Finance to build the stETH ecosystem on the Mantle network. Mantle is also considering cooperation with protocols such as Pendle and StakeWise, which can not only create synergistic network effects but also optimize capital usage efficiency. In addition, Mantle is also exploring income options such as direct mortgage, and proposes to establish an economic committee as a sub-DAO to improve asset management efficiency.
From these aspects, we can see that Mantle's planning in the field of LSD is systematic, innovative and efficient. It not only enriches Mantle's DeFi ecosystem, but also brings more unique user stickiness and value capture capabilities to the Mantle network. Compared with other L2 solutions, Mantle has significant advantages in this regard, which will effectively promote the rapid growth and cross-chain interconnection of the Mantle network.
3.5. Project data
3.6.1. Project related data
Token related data
According to data from Coingecko, the native token of the Mantle Network network is MNT. As of September 2, 2023, the price of MNT was US$0.45, with a circulating market value of US$1.454 billion, ranking 32nd among all cryptocurrencies. From the perspective of trading volume, MNT’s main liquidity comes from Bybit, a centralized exchange with strong financial strength behind it. On other mainstream exchanges, MNT’s trading volume is not high. Currently, MNT is not listed on any major mainstream exchange. listing, which may impact its liquidity and exposure. In addition, according to on-chain data, the current number of addresses held by MNT is approximately 163,406.
Taken together, the liquidity of MNT tokens is still highly dependent on the Bybit exchange, and the value transmission channels in external mainstream exchanges and blockchain communities need to be further expanded. The number of currency holding addresses also has room for growth. With the ecological With the gradual enrichment of the system, MNT's external liquidity and currency holding distribution are also expected to be more balanced.
L2 lock data
According to L2Beat statistics, as of September 2, 2023, Mantle Network's total locked-up value is approximately US$88.79 million, ranking ninth among all Layer 2 networks, accounting for 0.94% of the total market share.
From the perspective of TVL scale, Mantle Network lags behind the current top projects in the L2 field, such as Optimism, Arbitrum, etc. This is mainly due to the fact that Mantle Network, as an emerging L2 solution, its main network is still in the initial stage of operation.
As the Mantle ecosystem gradually enriches and the user base expands, its TVL scale is also expected to continue to grow. Proper incentive mechanism design and user cultivation will also help Mantle Network further enhance its influence and competitiveness in the L2 field.
3.6.2. Social media data
As of September 2, 2023, Mantle Network performed very well on social media platforms, showing that the project is very popular. The main channels currently operated by the project include Twitter, Discord, Telegram, and Medium. Currently, Mantle's Discrod account has attracted nearly 320,000 followers, with more than 9,000 people online every day, making it one of the most popular channels. At the same time, Twitter updates and interact frequently. The following is the specific data for each platform:
4. Token economic model analysis
4.1.1. Token model
The Mantle ecosystem and $MNT token are currently undergoing a governance approval process to determine key aspects including token addresses, token design and initial token distribution. This process involves key proposals and discussions, such as the BIP-21 merger proposal and the MIP-22 token design proposal.
1) Key points of the BIP-21 merger proposal
Proposed a "one brand, one token" principle to merge the brands and tokens of BitDAO and Mantle into Mantle to simplify the structure and communication of the ecosystem.
Authorized a token conversion program to convert all holders’ $BIT tokens at a fixed rate into new Mantle tokens, which will have more advanced designs and features to support Mantle’s Products and Governance.
Simplified the token economic model, accelerated all BIP-20 contributions and the staking plan issued by BitDAO, making the circulating supply of Mantle tokens clearer and more predictable.
Existing governance and resource management processes are retained, and Mantle token holders can still vote to decide the direction of the ecosystem, budget, treasury and other matters.
Does not affect existing initiatives such as sub-DAO types, communities, and product categories. They can still independently decide on their own brands, governance, missions, and strategies.
2) Key points of MIP-22 token design proposal
A new Mantle token, $MNT, is designed, which should have features such as upgradability and minting similar to $ARB and $OP tokens to support Mantle's products and governance.
A token conversion plan has been determined to convert all holders’ $BIT tokens into $MNT tokens at a 1:1 ratio, providing multiple conversion channels and flexible conversion periods.
A temporary conversion library has been established to support the creation and conversion process of tokens. The received $BIT tokens will be destroyed, and the sent $MNT tokens will maintain a 1:1 ratio. .
Without changing the existing governance and resource management processes, $MNT token holders can still decide the direction of the ecosystem, budget, treasury and other matters by voting.
The Mantle core contributor team will be empowered to determine the best time and sequence for $BIT token delisting, $MNT token listing, conversion channel opening, and Mantle Network mainnet.
4.1.2. Total amount and distribution of tokens
1) Total supply of MNT tokens
MNT is the utility and governance token of the Mantle ecosystem. MNT holders can participate in important decisions of the ecosystem through voting, such as treasury management, protocol parameters, product direction, etc. In order to simplify the token economic model, MNT holders passed the MIP-23 proposal to halve the number of MNT tokens in the treasury from 6.05 billion to 3.05 billion. At the same time, the proposal keeps the circulating supply of MNT unchanged at 3.17 billion pieces, and reduces the fully diluted supply from 9.2 billion pieces to 6.2 billion pieces. In this way, the proportion of tokens in the treasury dropped from the original 65.6% to 49%, and the proportion of the circulating supply increased from the original 34.4% to 51%. This change is intended to increase the demand and scarcity of MNT, thereby increasing its value.
2) Token economics of BIT
On July 15, 2021, the $BIT token was launched with a maximum supply of 10 billion tokens (without inflation), which was later changed to 6.2 billion.
After the MIP-22 vote is passed, it will be converted into $MNT on a 1:1 basis.
3) Token distribution situation
The distribution of $MNT tokens in the Mantle treasury needs to follow Mantle's governance process. The budget, fund raising and allocation process follows strict procedures, such as the BIP-19 Mantle Network Budget. As of August 2023, there has been no formal discussion regarding the macro goals or limits of the $MNT token distribution. However, a few main categories are expected:
User incentives: Prioritize driving user adoption of Mantle products through the implementation of multiple strategies such as multi-season achievements, tasks, and other incentive programs. Target metrics for user adoption include daily active users, total transaction and protocol fees, total value locked (TVL) and other relevant product adoption metrics. These incentives are designed to attract and retain users of the Mantle ecosystem.
Technology Partner Incentives: This category focuses on incentivizing decentralized applications, infrastructure service providers, and core protocol technology partners that contribute to the growth and development of the Mantle ecosystem. By providing incentives for these partners, Mantle aims to promote collaboration and partnerships within the ecosystem, improving overall ecosystem performance and scalability.
Core Contributor Teams and Consultants: This category also needs to follow the same budget proposal process, ensuring transparency and accountability in allocating resources to teams and consultants that actively contribute to the success of the project.
Other Opportunities: This category includes some opportunities that may arise, such as acquisitions, token swaps, treasury sales, and other transactions. Each opportunity will be evaluated on a case-by-case basis, considering their potential benefit to the Mantle ecosystem and alignment with project goals.
Burn: MNT tokens include a burn function that allows MNT tokens to be removed from circulation and total supply analysis. The destruction of MNT tokens from the treasury is determined through the Mantle governance process.
4.1.3. Token value capture
The value of the MNT token comes from its utility and governance in the Mantle ecosystem.
1) As a utility token, MNT can be used to pay gas fees in the Mantle network and serve as a collateral asset for node operators. These functions increase the demand and scarcity of MNT, thus increasing its value. In the long run, when the Mantle ecosystem develops the LSD track or even the Restaking business, $MNT can also be used alone or paired with LP as collateral.
2) As a governance token, MNT gives holders the right to vote on the decisions of the Mantle ecosystem. These decisions include treasury management, protocol parameters, product direction, etc. These functions increase MNT's influence and participation, thereby enhancing its value.
4.1.4. Core demand side of tokens
1) Mantle users: They need to use MNT to pay gas fees in the network and participate in network governance.
2) Mantle network node operator: an individual or organization that provides infrastructure support for the Mantle network, such as verifiers, storers, calculators, etc. They need to use MNT to stake to become a node and receive network rewards and fee income.
3) Mantle ecological developers: Those who develop ecologically on Mantle need to use MNT to obtain ecosystem incentives and support to develop DApps on the chain. As developer incentives, MNT demand will grow with developers.
4) Of course, the LSD platform already under planning will also use MNT as the main LP pledge token.
5. Industry space and potential
5.1. Industry Overview
5.1.1. Project classification
Mantle Network belongs to the project category of Layer 2 scaling solutions, which aims to solve the problems of congestion, high gas fees and inefficient transaction speeds of the Ethereum network. Broken down, L2 expansion solutions usually involve Optimistic Rollup, zk-Rollup, Plasma, State Channel and other technologies. Currently, the mainstream L2 expansion solutions are mainly Optimistic Rollup and zk-Rollup.
Mantle Network is an L2 solution based on Optimistic Rollup.
5.1.2. Market size
The market size of L2 expansion solutions can be measured from the following dimensions:
1) The size of the Ethereum network
The Ethereum network is currently the largest public chain platform, with more than 1.6 million active addresses, more than 62 million smart contracts, more than 4,200 DApps, and a market value of nearly $200 billion. The Ethereum network is the foundation and goal of L2 expansion solutions. Its scale and activity determine the demand and potential of L2 expansion solutions, providing huge potential user demand for L2 expansion.
2) L2 scales the solution
Currently, there are multiple L2 extension solutions in operation or under development on the market, each of which uses different technologies. According to L2Beat data, as of September 2, 2023, the total locked value (TVL) of L2 expansion solutions has reached US$9.48 billion, showing strong development momentum and user demand. Among them, Arbitrum is currently the most popular L2 expansion solution, with a TVL share of 54.99%, followed by Optimism, with a share of 25.21%, and zkSync, with a share of 4.3%. It is worth
