How well do you know Mantle Ecosystem? This new AMA series, Mantle Ecowaves, will help you ride the waves of the next big innovation in decentralized finance (DeFi) with ecosystem allies you’ve seen on Mantle’s feed, be they long-time ecosystem members or new on the block. For our very first episode, we invited some of the biggest liquidity drivers in the DeFi pillar to break down how DEXs, asset management and liquidity provision work, and how the Mantle community can participate with these decentralized applications (dApps) at their fingertips.

In this recap, we feature Range Protocol’s Co-Founder Tony (T), iZUMi Finance’s Marketing Manager Yond, FusionX’s Co-Founder @/dexbruce_eth (B) and AGNI’s Marketing & Ops Lead, Yara.

Some sentences have been edited for clarity and brevity.

Why build on Mantle?

B: There is an interesting story behind why we decided to build FusionX on Mantle. We’ve been through a couple of other chains, but I first heard about Mantle itself via a tweet by an OP stack contributor and came to know about Mantle Network as the first modular Layer 2 (L2). I’ve always liked the idea of modular blockchains and looking at Mantle Network’s architecture, I found out that this could be the best L2 to work on, especially with the help of a separate data availability layer. What I liked about Mantle is the tech and BD teams — they’re always available. So whenever we give any feedback or whenever we test an issue, they immediately connect with a tech team, even helping us to connect with the partner protocols. These are the things that as a protocol, you always look forward to.

(A shoutout from Mantle to Bruce, who’s always active in the community and even helping out other builders and users to find solutions quickly!)

Yond: We actually have a very close relationship with the DAO and we fully supported the transition from the $BIT to $MNT token, giving it more utility and we definitely see the potential in growing them, including ecosystem initiatives such as EduDAO and Game7, so it was natural for us to build on Mantle. And secondly, the general narrative has been slowly transitioning from Ethereum to a more multi-chain approach, so it was natural for us to work on Mantle Network, which utilizes EigenLayer’s EigenDA technology. It’s great for those who are coming up with restaking or liquid staking tokens, and I think it's definitely our advantage over, for example, another AMM, just because we’re able to provide concentrated liquidity. Liquidity works pretty well with all these assets, and it’s an advantage for us to provide liquidity services for all these liquid staking products.

T: One thing I’d add is that I personally have had some pretty good interactions with the Mantle development team and management team. We find great synergy with the team and overall I quite liked the initiative that the Mantle team has, trying to really bring all the pieces of the puzzle together and making the right move in terms of partnerships. I'm just a very big fan of the motivation that you guys have to play for the long run, as opposed to just attracting hot money and using incentives. So that's why we're prioritizing building on Mantle.

Yara: Mantle Network’s unique architecture, that leverages a modular design to enhance transaction throughput and ensuring scalability, while also keeping fees low and providing security, is the reason why we decided to build on Mantle.

How can DEXs keep an ecosystem healthy?

B: DEXs are important because whatever interaction you're doing on this blockchain, or on different protocols, you’ll need an assortment of tokens. And with tokens, all users will need a platform to trade these tokens. And more than that, DEXs provide anonymity to a user’s assets and trades, which is incredibly important.

Yond: First of all, we try to support as many assets as we can as a DEX, including basic assets such as USDT, USDC and more long term assets, even more volatile assets. So that when you want to access your liquidity, when you want to exit your position for a very volatile token, you'll be able to do so. And second of all, I think that capital efficiency is always important, because on other AMM DEXs, generally you will lose like a couple bucks due to friction and also slippage. So we cover the potential losses that don’t belong to the nature of the original trade.

How do we keep the composable DeFi ecosystem alive?

T: So with first generation DEXs, liquidity providers basically provide liquidity from zero to infinity based on some pricing curve, and they try to generate trading transaction fees based on trading activity on these DEXs. Then, concentrated liquidity DEX was born, where a liquidity provider could choose a specific price range at which they wanted to provide liquidity. This is a much more capital efficient way for liquidity providers to utilize their capital on DEXs in order to extract as much transaction fees as possible within a tight range. From a user or trader’s perspective, they’re more encouraged to trade, as there’ll be less slippage with trading across different types of trading pairs. Let's say for an average user, who has some exposure to both Mantle’s $MNT and Ethereum’s ETH, and these are idle assets that they want to deploy somewhere to earn extra yields, but at the same time maintaining the token exposure, because I think users hold $MNT and ETH with the expectation that they want to see the appreciation of these two assets. They don't want to build, and they don't want it to be the case where $MNT appreciates in price, and they end up with ETH and vice versa. They want to maintain their total exposure while making that extra yield. So that’s what Range Protocol is trying to help with within the construct of a concentrated index. If you’re an average liquidity provider, you can utilize Range to deploy your $MNT and ETH, and Range can automatically help you manage your position and optimize your transaction fees. This means generating as much transaction fees as possible within a tight range and at the same time automatically focusing on these selected price ranges as prices move during volatile markets.

Yond: Composability in terms of building on top of concentrated equity is definitely very useful. If you liken an AMM to a vending machine that sells all kinds of beverages, they're all constant products. Concentrated liquidity is a more tailored version of a vending machine. For example, it only sells Coke. The best part about having concentrated liquidity is that you target specific assets or specific pairs where you can abstract where it can extract the most value out of it. For example, for pegged assets and less volatile assets, let's say like USDC and USDT, or medium volatile assets like ETH and BTC, these are perfect assets for concentrated liquidity, because you can generally predict the price actions to change your position. And the best part of having an asset management protocol is that it can automatically manage short positions. So you save your time, money and energy.

What are we looking at in the future?

B: Innovation in blockchain, and what we’re seeing with different AMM and models, all these are made possible because of the units that made it open source. The OP and ZK stacks are so popular because of the openness of the code, which gives the best opportunity to those who are starting on reading the data as they don't have to reinvent the wheel. Then after that, what FusionX is trying to solve is at the integration level. If a user wants to use a certain leverage, if they want to use this liquid staking coin on say, single click strategies, if they want to lend their assets and get some tokens such as a stablecoin and use it as a collateral — our goal is to combine all of these into a single DeFi ecosystem. Secondly, we take the responsibility of ensuring that our contracts are all verified on explorers. Lastly, we’re working on a secret project that will be very helpful for other projects to bootstrap infrastructure as well on any particular chain.

T: From my perspective, the one thing that Range is betting on is that there are going to be more assets on-chain as the DeFi world gets increasingly complicated. Thus, we do think all of these assets on-chain require more financially savvy traders and managers to help manage them. That's the goal we're trying to achieve and that's the biggest trend we're trying to bet on which is that all these assets on-chain, be it spot assets, yield-bearing assets, real world assets (RWAs) — they all need professional management, which is where we come in.

Yara: I think for DeFi, DEXs will continue their rise and gradually replace their centralized counterparts as the crypto market develops. AGNI is adapting to these innovations, especially as we explore novel approaches to improve liquidity efficiency and provide an enhanced user experience. We’re also working on our Launchpad, which will be launching soon, so stay tuned for updates.

If you enjoyed the first episode of the Mantle Ecowaves series, sit tight as we’ll be covering NFTs and games in our next episode, with guests from HyperPlay, Mintle, Chat3 and Astra: OmniRise. Let us know on Discord if you’d like to hear about specific dApps or have any in-depth questions regarding our burgeoning ecosystem.