Mantle BitDAO’s Economic Model Transformation – How to Serve L2 Development?
Mantle BitDAO's Economic Model Transformation - L2 Development Support
Written by: VIKTOR DEFI, translated by: Deep Tide TechFlow
Mantle Network is a Layer 2 blockchain incubated by the BitDAO team. Similar to Optimism and Arbitrum, it also utilizes Optimistic Rollup technology for its construction. Through modularity, its own data availability layer (DA), decentralized sequencer, and other advantages, it enhances network throughput and scalability.
The benefit of this Layer 2 solution is that it can share network security with the Ethereum mainnet, reduce transaction fees through modular “compressed blocks,” and increase the overall throughput of on-chain transactions.
Mantle differs from other L2 solutions in the following ways:
1. Modular Data Availability: By utilizing EigenLayer, Mantle can achieve higher transaction throughput than traditional L2 solutions. Accessible data availability also means that Mantle can increase throughput without compromising security or burdening validation nodes, reducing processing requirements and promoting decentralization.
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2. Multi-Party Computation (MPC): Mantle uses MPC to minimize the trust risk of L2 execution results. By using Threshold Signature Scheme (TSS) technology, dedicated nodes contribute to multi-party signatures to improve the correctness of off-chain transactions. This shortens the withdrawal challenge period.
3. Decentralized Sequencer: Mantle decentralizes its sequencer to provide secure and trustless block production. By rotating an unlicensed set of sequencers, Mantle reduces the possibility of single points of failure or censorship on the network.
Relationship with BitDAO, Tokens, and Treasury
BitDAO has been renamed to Mantle and plans to build an ecosystem on its Layer 2 solution. The $BIT token of BitDAO has been converted to $MNT token at a 1:1 ratio.
Regarding its updated treasury and token economic model, here are some key points:
Mantle is incubated by BitDAO, which possesses a treasury of $2 billion, ranking among the top three DEFI treasuries.
The $MNT token will be used for governance, node staking, and potentially as collateral within the Mantle ecosystem.
During the token conversion process, 3 billion $BIT tokens were burned, resulting in a 30% decrease in the total token supply. Currently, only 51% of $MNT tokens are in circulation.
Mantle proposes to establish a $200 million ecosystem fund within 3 years for the development of over 40 projects. The initial $100 million will come from BitDAO’s treasury.
Mantle proposes to allocate 200,000 ETH for staking and ecosystem development. The Mantle Economic Committee will decide how to allocate the treasury funds.
$MNT Token Allocation?
There is currently no formal discussion on the macro objectives or restrictions regarding the allocation of $MNT tokens. The core contributor team has only provided estimates for potential priorities.
In general, the MIP-22 proposal discusses key aspects of the $MNT token economic model, such as token design, conversion ratios, and allocation priorities. The actual macro objectives and restrictions may be determined through further governance discussions and proposals. The current focus appears to be on incentivizing users, partners, and core contributors through the allocation of $MNT tokens.
Mantle aims to improve transaction throughput and reduce costs by adopting various methods such as OptimisticRollup, EigenLayer modular data availability, multi-party computation, and more decentralized sequencers. However, the effectiveness of these solutions in practice is yet to be observed. In terms of the ecosystem, most dApps on Mantle currently focus on gaming, with fewer DeFi or infrastructure products. The major Ethereum protocols have not yet integrated with Mantle.
The success of Mantle will depend on its ability to deliver on its technical promises and capitalize on the growing demand for LSDFi solutions.