Mantle Network Readies Mainnet, Fueled by BitDAO Largesse
The Mantle testnet has been live since January and mainnet launch is estimated to occur sometime in July
Artwork by Axel Rangel
Mantle Network is preparing for its mainnet launch. Earlier last month, the Ethereum layer-2 scaling solution, and BitDAO, the team building the rollup merged, forming the Mantle ecosystem.
Unlike other Ethereum layer-2s that exist today — such as optimistic or zero-knowledge rollups — Mantle is designed to be completely modular.
This means that it outsources its data availability layer — the system that stores transaction data — rather than using Ethereum mainnet. Data storage represents the bulk of the cost of other layer-2s, and is one reason why EIP-4844 or proto-danksharding is so eagerly anticipated.
Although keeping data off of Ethereum mainnet has its advantages, such as drastically increasing efficiency, it also comes with a few downsides in the area of security and trustlessness.
This merger was a decision made by BitDAO to set the stage for future ecosystem products, according to head of ecosystem Arjun Kalsy.
BitDAO has one of the largest DAO treasuries in crypto today, valued at nearly $3.7 billion, although 78% of that is currently held in the DAO’s own token (BIT). This massive war chest is largely a result of its partnership with centralized exchange ByBit which moved its headquarters from Singapore to Dubai in April. From July 2021 to February 2023 pledged 2.5 basis points of all its futures trading volumes to BitDAO’s treasury.
BitDAO investments have been varied, so the motivation was to streamline the different moving parts in the ecosystem under one unified brand, Kalsy noted.
“If the user or the developer or the community is interacting with us, they should be interacting with one brand rather than interacting with a DAO with a separate token,” he said. “Which is when we decided on [one brand].”
As such, a new token in line with the Mantle brand (MNT) will also be issued. Kalsy notes that this decision was made because the existing BitDAO token is not designed for on-chain use and lacked critical functionality.
In contrast, MNT will be used for ecosystem participants to pay gas fees and contribute through ecosystem building through its grants program, Kalsy explained. It will also be used for staking — where staking is required in the ecosystem — and for voting on governance proposals.
“Essentially what we want to do with this entire ecosystem is we want to take one token, which is the MNT token, build new products, and then continue to keep building utility for that,” Kalsy said.
Staking will be a large focus moving forward for the new ecosystem, he said, citing the 13% treasury allocation to ETH that could be used to earn further revenue.
“What we felt was that we could create our own LSD protocol, we could stake our ETH that would give us yield, which we can use for ecosystem building, and so on and so forth,” he said.
BitDAO’s treasury contains $507 million in ETH and almost $300 million in stablecoins according to DeFiLlama.
The Mantle testnet has been live since January, and mainnet launch is estimated to occur sometime in July.
Kalsy claims there are now over 11,000 weekly active users on the Mantle testnet and around 92 deployed applications.
Although Mantle testnet data can not confirm Kalsy’s claims, at the time of writing, the testnet data does show that the network has processed over 10 million transactions, and seen almost 850K wallet addresses created.
It is also important to note that some of the deployed applications referenced in their ecosystem are not fully operational, though Kalsy notes this is because “testnets provide an iterative ‘beta’ environment for dApp builders to improve functionality and identify potential bugs.”
“The ‘live’ nature of such experimentation implies that these dapps will naturally vary in their maturity and readiness. After all, testnet phases are meant to iron any technical difficulties, big or small,” he said.
Kalsy could not “confirm or deny” if there will be an upcoming airdrop, but he notes that “we are looking to incentivize early users, especially folks who have been regularly doing transactions on the testnet.”
Existing BIT tokens will be converted to MNT prior to Mantle’s mainnet launch in Q3.
“The token conversion process is already underway, and holders will be able to access various official token conversion channels. Existing token holders have the option to convert their tokens anytime during the conversion period,” he said.
The token conversion process will ensure that existing holders continue to have governance rights, he notes.
A governance vote authorized the brand and token conversion as well as a new tokenomics model “endorsed by the community” Kalsy said.
Voting authority in the DAO is delegated to a small subset of token holders, with nearly 100% of the unanimous vote in favor coming from 20 wallet addresses.
A spokesperson for Bybit told Blockworks that following the passage of the governance vote, contributions previously due from Bybit were subject to accelerated vesting schedules
“This means all previously unvested $BIT tokens were unlocked as part of the token conversion process, and sent to the Treasury,” the spokesperson added, citing blockchain records.
Correction June 9, 2023 at 6:15 am ET: Current location of Bybit headquarters, details and status of BIT pledged to BitDAO.
Correction June 9, 2023 at 2:59 pm ET: Bybit pledged 2.5 basis points of its trading volumes in July 2021, not 25 basis points.
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