Since the launch of Mantle Network Mainnet on July 17, 2023, Mantle has quickly established itself as a key player in the layer 2 space. Part of Mantle's success can be attributed to its keen ability to pinpoint and respond to emerging narratives within the DeFi sector, developing products that serve the collective needs of its users.

This article explores the predominant narratives in the DeFi space and evaluates Mantle's contributions to these discussions, highlighting its role in shaping the future of decentralized finance.

Real World Assets

The narrative concerning the tokenization of real world assets (RWAs) has gained a lot of momentum in recent years. Specifically, the tokenization of U.S. Treasuries has emerged as a major trend in this area. This sector saw a substantial rise in value, starting from approximately $100 million at the beginning of 2023 and soaring to around $700 million by the end of the year, with most of this activity occurring on Ethereum.

The increasing interest in this sector is attributed to the enhancement of liquidity and the streamlining of transactions that it offers by eliminating intermediary involvement, thereby expanding the accessibility of investment opportunities. The exceptional growth of tokenized U.S. Treasuries has also been fuelled by the rise of Treasury yields, which have soared to more attractive rates, attracting an increasing number of buyers. The tokenization of U.S. Treasuries has also significantly simplified the purchasing process, attracting a broader range of users. This ease of access is a key reason why numerous platforms have started to provide this financial product to their users.

Mantle Network recently collaborated with Ondo Finance, a leader in tokenized financial products and the issuer of $USDY, a tokenized bearer note backed by RWAs. $USDY is unique because it is backed by a mix of short-term U.S. Treasuries and bank demand deposits, offering holders a yield generated from these underlying assets. $mUSD is a rebasing wrapped version of $USDY exclusive to Mantle that is designed to maintain a consistent peg to $1, with interest distributed via new token units by Ondo Finance. Users can bridge, swap and wrap $mUSD to Mantle on Ondo Finance's swapper UI or swap available tokens for $mUSD on Swapsicle.

Aligned with Mantle Network's objective to offer a variety of yield strategies to its ecosystem members, users can also engage with the following yield strategies through MYSO Finance:

• Create fixed, zero-fee OTC $mUSD swaps or custom $mUSD loan offers
• Swap between $mUSD and USDC with zero slippage and no additional fees

Start Using $USDY Now:

• Visit the Ondo $USDY site: https://ondo.finance/usdy
• Complete the registration process and subscribe to $USDY by following the provided steps.
• Review Ondo's documentation for any eligibility requirements.

Find further information here if you want to incorporate $USDY into your application.

Liquid Staking Protocols (LSP)

Liquid staking (LS) has revolutionized the DeFi sector by addressing key challenges inherent in traditional staking methods. This approach enables users to accrue staking rewards without locking up their assets, as LS participants are issued liquid staking tokens (LSTs) that can be used in the wider DeFi space. This leads to improved liquidity, increased yield opportunities, and enhanced capital efficiency.

Mantle's permissionless, non-custodial ETH Liquid Staking Protocol, deployed on Ethereum layer 1 (L1) and governed by Mantle, serves as a prime example of how LSPs positively impact both stakers and the broader ecosystem in which they operate. Participants staking ETH on Mantle LSP receive $mETH, a value-accumulating receipt token. $mETH is tradable on both centralized and decentralized exchanges, demonstrating how LSPs enhance capital efficiency. As an LST, $mETH can be utilized in a range of DeFi applications throughout the Ethereum ecosystem. Furthermore, $mETH is used in various Mantle Ecosystem DeFi applications. Such integration allows users to deploy their $mETH in multiple financial activities like lending, borrowing, or providing liquidity, further expanding the token's utility.

Stake ETH on Mantle LSP here: https://meth.mantle.xyz/stake

For a step-by-step guide on how to stake and unstake on Mantle LSP, check out "A Staker's Guide to mETH."

Restaking

Restaking allows those who have staked their ETH in the consensus layer to validate additional applications within Ethereum's ecosystem. By opting into restaking, participants grant EigenLayer smart contracts the ability to impose additional slashing conditions on their staked ETH, which allows stakers to validate many modules, including consensus protocols, data availability layers, and bridges.

The emergence of EigenLayer and restaking addresses a longstanding challenge — the fragmentation of cryptoeconomic security. Middleware and non-EVM (Ethereum Virtual Machine) applications built on top of the Ethereum network are responsible for generating their own trust network. This approach is resource-intensive and inefficient, as bootstrapping security is expensive and time-consuming. However, EigenLayer's restaking model solves this issue by allowing ETH stakers to extend their security to these applications, repurposing their staked ETH for broader use.

Holders of $mETH will have the opportunity to engage in restaking activities with the anticipated launch of EigenLayer's mainnet. It's important to note that Mantle LSP isn't the only source for acquiring $mETH. There are multiple avenues for users to obtain $mETH, offering flexibility and accessibility in participation.

Liquid Restaking Tokens

The introduction of restaking has also led to the emergence of a new concept in the DeFi space — Liquid Restaking Tokens (LRTs). But how does liquid restaking work? The process is relatively straightforward. Just as Ethereum does not natively include liquid staking, EigenLayer similarly does not incorporate liquid restaking as a core feature. This has led to the rise of liquid restaking protocols that enable users to restake their tokens. In return, they can mint an LRT, offering a liquid representation of their restaked assets.

The framework and general concept of liquid restaking bear similarities to liquid staking, with the primary distinction being the different underlying assets they represent. Consequently, they both contribute to creating a more capital-efficient market, showcasing similar benefits in this regard.

The Dencun Upgrade

The upcoming Ethereum upgrade aims to enhance the scalability, efficiency, and security of the Ethereum blockchain through a series of Ethereum Improvement Proposals (EIPs). Among these, EIP-4844, or proto-danksharding, is a key proposal to be implemented in the upcoming Dencun upgrade. This particular EIP is expected to significantly benefit Ethereum end users by reducing gas fees for L2 transactions. Proto-danksharding introduces a new type of transaction known as blob-carrying transactions. These transactions function like "sidecars" that can be attached to Ethereum transactions, allowing the inclusion of additional data. The blobs offer a more cost-effective solution for data storage, thereby reducing gas fees compared to the current cost of call data.

Thanks to the architecture of Mantle Network, it is well-positioned to benefit from such upgrades, which in turn enhances Mantle's ability to offer some of the lowest gas fees compared to other L2s. This makes it an attractive hub for applications looking to build on a cost-effective chain.

Ethereum Inscriptions

Ethereum Inscriptions, or Ethscriptions, offers a unique method for creating and distributing digital artifacts on the Ethereum network. Unlike Non Fungible Tokens (NFTs), which typically utilize the ERC-721 standard and are stored at a contract level, Ethereum inscriptions operate at the transaction level. This is achieved by encoding a unique reference identifier (URI) within an Ethereum transaction's calldata, essentially embedding the digital artifact within the transaction itself. This method of storage in the transaction calldata not only ensures the distinctiveness of each inscription but also potentially reduces costs compared to traditional NFTs.

Thanks to inscriptions offering a decentralized, affordable, and accessible alternative to traditional contract storage, the Ethereum ecosystem saw a surge in activity in an inscription frenzy towards the end of 2023. This surge led to many L2 protocols experiencing temporary outages due to the overwhelming number of transactions. Mantle Network also witnessed a significant increase in transaction count. The transaction volume on Mantle Network reached an all-time high of 200 TPS on Dec. 20, 2023. Despite this influx, Mantle's sequencer, data availability (DA), and Explorer remained fully operational and stable. This underscores Mantle Network's robustness. If similar trends arise or inscription activity increases significantly again, Mantle Network's resilience ensures protection for applications built on its network.

Artificial Intelligence (AI)

AI is revolutionizing modern technology, and it's evident that a synergy is forming between AI and blockchain technology. This synergy is particularly useful in developing web3 applications, where AI plays a crucial role. One of the most significant ways AI contributes is by streamlining operations and taking over repetitive tasks to which developers typically dedicate a lot of time. For example, numerous applications are leveraging AI by assisting developers in generating and deploying smart contracts through prompts, allowing them to code faster by skipping long and complex setups. Mantle Network recognizes the potential these types of applications have in developing dApps within the ecosystem, which has led to integrating platforms such as Web3 GPT into Mantle Ecosystem.

Applications like Web3 GPT are lowering the entry barriers for dApp development, allowing developers to focus on the creative aspects of building applications. This shift leads to the creation of more expansive and advanced applications that often require a robust chain that can support its intricacies without compromising user experience. For example, AI technology empowers GameFi platforms to create vast, open-world multiplayer environments with intricate in-game economies. Such platforms require robust chains to build on that can manage a high number of transactions per second (TPS). With its modular design, Mantle Network has achieved 500 TPS without issue, positioning it as a highly competitive environment for developers who are building extensive and complex applications.

Decentralized Physical Infrastructure Networks

The advantages of building on Mantle Network, highlighted in this article, play a significant role for projects that build innovative dApps that encapsulate the latest narratives and technology emerging within the blockchain space. One such narrative gaining momentum involves decentralized physical infrastructure networks (DePINs). DePINs are a new way to construct and sustain physical infrastructure. This concept encompasses many physical assets, including WiFi hotspots, cloud storage solutions, and computing resources like graphics processing units (GPUs). To help incentivize participation, DePin projects offer tokens to reward users for participating and contributing to the development of these infrastructures.

L2 solutions like Mantle Network can benefit these projects significantly since DePins carry out frequent microtransactions and must manage an extensive network of devices, sensors, or participants. Higher throughput ensures that token rewards can be distributed more efficiently and timely to participants within the network, which is vital for DePINs, where real-time data collection, analysis, and response are often required. In addition, lower transaction costs make it economically viable to implement a token reward system where contributors can be rewarded for small, incremental contributions to the network.

For more information regarding Mantle Networks architecture visit: https://docs.mantle.xyz/network/introduction/overview

Mantle Network's strategic innovations and collaborations have swiftly positioned it as a cornerstone of the DeFi landscape, driving a vision where DeFi is more accessible, efficient, and scalable. By embracing the latest narratives and fostering a robust ecosystem that caters to developers and users alike, Mantle is setting the stage for a future where it stands as a hub for DeFi innovation and growth. With significant updates like Mantle v2 on the horizon, the advancements are expected to continue.