Left hand TradFi, right hand DeFAI: Is Mantle leading the on-chain financial breakout singularity?

Author: Deep Tide TechFlow

Recently, Mantle, ranked fourth in TVL among L2s, highlighted two upcoming innovative products in its Q2 letter to the community: Mantle Index Four and Mantle Banking.

A single stone stirs up a thousand waves, and the narrative of L2 competition resurfaces under the new cycle pattern.

From Base's deep cultivation in the AI Agent track with frequent hits to the impressive performance of the game-focused Sonic mainnet launch token, in the L2 competition, the L2 concept is becoming less frequently mentioned on its own, and is increasingly seen as a foundational implementation method serving the differentiated narrative logic of the upper layer.

So, what kind of narrative logic does the market favor?

We can also notice that whether it is bringing large-scale traditional institutional funds on-chain starting from Bitcoin ETFs, or bringing real-world assets on-chain for more efficient circulation, the ever-changing crypto market remains fundamentally the same, with the ongoing pursuit being: how to maximize the utility of the chips in hand.

Looking back at the development of the Mantle ecosystem in the past year, from the rapid progress of many core products such as mETH, cmETH and the rebranded ƒBTC (formerly known as FBTC) in the data dimension, it is not difficult to find that this disruptor who jumped out of the traditional L2 competition early is taking "achieving higher capital efficiency" as the starting point and is moving towards the vision of "full-chain liquidity hub".

And in 2025, which has arrived, American neoliberalism represented by $TRUMP Meme has brought unprecedented uncertainties to the crypto market, with new funds entering the market and a new round of plate rotation.

At the moment when "chaos is the ladder", how will Mantle continue to improve capital efficiency, capture diversified income opportunities, continue the strong growth momentum, bridge the gap between crypto finance and traditional finance, and open the road to upgrade the brand narrative of inclusive on-chain finance with the slogan of "bringing crypto into everyday finance"?

With Mantle Index Four (MI4) and Mantle Banking products as a guide, this article aims to delve into the journey and new path of building an on-chain financial edifice with Mantle.

2024: Exploring the Up and Down of Mantle's Full Chain Liquidity Hub

The core of finance lies in the interconnection of assets, and this interconnection brings liquidity.

Liquidity is a reflection of the efficiency of asset circulation, and therefore, many times the interpretation of finance can be simplified to the creation and management of liquidity.

Based on this fundamental principle, constructing on-chain finance and realizing a more efficient use of the chips in hand, Mantle first chooses to focus on the most basic aspect of assets.

In December 2023, Mantle officially launched the liquid staking protocol mETH, which allows users to obtain mETH by staking ETH while obtaining an annualized rate of return stable at more than 6%.

In October 2024, Mantle officially launched the liquidity re-staking token cmETH, allowing users to stake mETH to receive cmETH.

In August 2024, Mantle officially launched FBTC by supporting Ignition BTC. As a new type of synthetic asset, FBTC is pegged to BTC at a 1:1 ratio. On February 14, 2025, Ignition FBTC announced a brand overhaul and was officially renamed Function, with FBTC being rebranded as ƒBTC as an all-chain Bitcoin yield asset.

It can be seen that from LST to LRT, from ETH-Fi to BTC-Fi, Mantle has built the basic framework of its on-chain financial architecture by launching multiple interest-bearing assets.

Of course, simply creating an asset does not bring liquidity; it also requires creating demand for the asset. In terms of asset connectivity, Mantle firmly grasps two major growth hotspots: broader adoption and richer yields.

First of all, compared to other assets, the exquisite design of Mantle gives it a prominent advantage:

mETH adopts the permissionless ERC-20 receipt token design for value accumulation, which can automatically realize the accumulation of income in the mETH token itself, which not only makes mETH have higher capital efficiency and holding income, but also makes it easy to be adopted by applications and more deeply integrated into a richer and wider ecological scene.

cmETH, as LRT, possesses the same native yield properties and high composability within the ecosystem as mETH.

ƒBTC highlights the concept of full-chain fragmentation integration, allowing users' assets to participate in various Bitcoin yield sources on-chain DeFi by using ƒBTC, which is 1:1 pegged to BTC, regardless of which chain they are on.

In addition to its own advantages, Mantle is also well aware of the truth that "better resources can create better assets", and has also achieved outstanding on-chain achievements by building a complete ecosystem and creating rich circulation scenarios for interest-bearing assets.

According to the Mantle official ecosystem page, the Mantle ecosystem has over 230+ projects settled, covering multiple sectors including Dex, Restaking, real-world assets (RWA), gaming, etc., with the DeFi sector being particularly prominent, and there are more than 13 lending projects within the ecosystem.

As core yield-bearing assets of the Mantle ecosystem, mETH, cmETH, and ƒBTC have a natural advantage in deeply integrating with the Mantle ecosystem:

mETH has established cooperation with 42 projects, including Eigenlayer, Symbiotic, Karak, Zircuit, INIT Capital, Pendle and other well-known projects. According to DeFi Llama data, within a week of its official launch, mETH's TVL has exceeded $100 million, peaking at $2.1 billion in 2024, and currently has a TVL of about $1.5 billion, making it the fourth largest LSD product on Ethereum.

ƒBTC has established cooperation with 28 projects, including BTCFi projects such as Solv, Bedrock, Pell Network, Lombard, Satlayer, Bounce Bit, Fuel, BOB, etc. Since its official launch in August, ƒBTC TVL has also exceeded $100 million in a short period of time, and ushered in a dryland onion-like growth at the end of October, rising from 270 million to a low of 1.18 billion in November, an increase of more than 400%, and the current TVL is about $1.42 billion.

At the same time, the Mantle ecosystem also has meme and mini games as two major traffic secret weapons, and the meme project in the ecosystem has aroused extensive participation, and the number of registrations of the Catizen game has exceeded 20 million.

A rich ecosystem has brought diverse use cases and market demands, which have also transmitted to the underlying support of the Mantle Network, driving its rapid growth in 2024.

In terms of TVL: According to L2 beat data, Mantle TVL will be about $340 million in January 2024, and Mantle TVL will be about $2.06 billion on December 31, 2024, an increase of more than 600% during the year, and on December 9, 2024, Mantle TVL will reach a peak of $2.36 billion that year, an increase of more than 690% compared with the beginning of the year, and Mantle TVL is currently stable at about $1.9 billion.

It is particularly noteworthy that, through on-chain data analysis, Mantle's TVL mainly comes from DeFi products such as Dex, lending, and Restaking within the ecosystem. This In-DApps TVL not only further enhances the value of Mantle's TVL growth but also significantly highlights the user activity within the Mantle ecosystem.

According to data from Dune: Mantle's daily active users exceed 45,000, with a peak of 191,000 daily active users on September 11, 2024; additionally, new users on September 10, 2024, also reached a peak of 200,000; currently, Mantle has a total user base of approximately 5.39 million, which is nearly a tenfold increase compared to 550,000 at the beginning of 2024.

Using interest-bearing assets as a means to expand the ecological landscape, 2024 can be said to be a year in which Mantle strides towards becoming a "cryptocurrency liquidity hub."

And as 2025 kicks off, how can Mantle continue to use assets as an entry point to continue to deepen its development around its on-chain financial vision and achieve great results again?

From the debut of the Mantle Index Four (MI4) product to the key layout in the AI track, Mantle's answers are beginning to take shape.

2025: A multifaceted extension of Mantle's on-chain financial vision

Before exploring new opportunities, it is also very important to stabilize and promote the advantages of the basic situation.

Therefore, at the beginning of 2025, Mantle has also made key plans for the three major interest-bearing assets of mETH, cmETH, and ƒBTC:

On the one hand, mETH's new yield pool model will be launched in the first quarter of 2025, and at the same time, through persistent ecological construction, it will continue to bring rich application scenarios and revenue sources to mETH / cmETH to attract more users to participate.

On the other hand, ƒBTC will continue to deepen its efforts in the institutional Bitcoin yield infrastructure field:

We know that after completing the brand transformation from Ignition FBTC to Function, ƒBTC will focus more on the three pillars of institutional trust and security, long-term development and sustainable growth, as well as full-chain and composable infrastructure, committed to bringing more efficient capital flows and more objective sources of yield to full-chain institutions, DeFi protocols, and mature DeFi participants.

Previously, ƒBTC received investments from several influential financial companies including Ant Alpha and Galaxy Digital. Adhering to the core development philosophy of "ƒ(BTC) = Liquidity + Composability + Capital Efficiency," ƒBTC will lead institutions in creating safe and trustworthy BTC assets in the future, deeply integrating with various financial scenarios such as lending, staking, and liquidity yield.

In addition to the three interest-bearing assets, the three new products that have just been officially announced are a series of hard dishes served at the Mantle 2025 on-chain financial feast. Since then, the six pillars of the Mantle ecosystem have been unveiled to the community.

Mantle Index Four (MI4)

With the crypto-friendly President Trump in office, the crypto market may enter a loose regulatory environment under the guidance of the U.S. market. It is expected that more traditional users, funds, and institutions will flow into crypto finance. Therefore, 2025 is the year when Mantle's on-chain finance deeply integrates with traditional finance, and the Mantle Index Four (MI4) serves as a bridge built by Mantle between traditional finance and on-chain finance.

As an institutional-level compliant product, this fund caters to the current huge demand in the market for diversified exposure products in cryptocurrency, targeting both crypto users and traditional financial investors.

For crypto users, Mantle MI4 brings institutional-grade asset security and custody services;

For traditional finance users, Mantle MI4 can provide a convenient, intuitive, and compliant way to participate in crypto finance.

More importantly, like the Mantle ecosystem's living assets, Mantle MI4 has strong earning capabilities, which undoubtedly makes this product more attractive to traditional financial users, while also being able to attract more incremental users into the Mantle ecosystem.

In the initial stage of operation, Mantle MI4 will cover four assets: BTC, ETH, SOL and USD, and adopt a rules-based rebalancing strategy to ensure transparency and low cost, but the initiative to promote the deep integration of the fund with more assets in the Mantle ecosystem is in the pipeline, according to the official disclosure, after the fund is launched, Mantle will aim for $1 billion in assets under management, and with the strong credibility of Mantle Treasury, the largest project vault in the crypto industry, There is a realistic basis for this goal to be achieved quickly.

Mantle Banking

As a cryptocurrency bank, Mantle Banking aims to deeply integrate blockchain technology with banking services, providing completely blockchain-based payment, lending, and wealth management solutions, which is a subdivision of the "on-chain bank" in Mantle's vision for on-chain finance.

Specifically, Mantle Banking aims to help users manage consumption, savings, and investment of fiat and cryptocurrency assets within a single account. By unifying the experience of fiat and cryptocurrency accounts, Mantle Banking creates a seamless and efficient user experience between TradFi and DeFi.

In the future, thanks to Mantle Banking, users can deposit fiat payroll directly into Mantle Banking's all-in-one account, and then tokenize the deposit into a stablecoin, allowing them to spend across multiple currencies globally with a virtual card at below-market rates, just like fiat.

Mantle Banking is committed to providing crypto services to the daily lives of a wider range of users, adopting a DeFi-first approach to bridging the gap between fiat and cryptocurrency. Adhering to the mission of transforming the financial architecture into a seamless, secure, and user-friendly Web3, Mantle Banking will become a convenient entry point for large-scale incremental users to enter the crypto ecosystem, and an important opportunity for crypto finance to reach millions of households.

MantleX

It is worth noting that the popularity of AI narratives remains high, and Mantle's launch of MantleX also reflects its ambitions in the AI field.

With the rise of DeFAI, we have witnessed the trend of deep integration between AI and on-chain finance: leveraging AI's advantages in data analysis, risk prediction, and automated execution of smart contracts to provide users with more efficient asset management, intelligent risk control, and personalized financial services. It can be said that the breakthrough development of AI will lead to significant breakthroughs in on-chain finance.

MantleX is an important attempt by Mantle in the field of AI, and its main work is divided into two aspects:

Attract more AI projects into the Mantle ecosystem: It is reported that MantleX is currently in communication with several well-known AI Agent teams, and over 40 AI projects have confirmed their intention to cooperate, which will be deeply integrated with the Mantle ecosystem in 2025.

Operating the Mantle AI Fund: This fund aims to encourage the Mantle ecosystem team to actively develop more practical AI Agents. In the future, Mantle hopes to achieve fully autonomous operation of Mantle X by the Agents.

In addition, the mETH team is also conducting in-depth research on the integration with DeFAI to further simplify the user experience process and achieve better returns.

More AI support measures include the ongoing Hacker House program: as a large-scale event themed around AI, Hacker House aims to discover outstanding AI Agent projects and talents within the ecosystem.

In addition, with the core vision of "bringing crypto into everyday finance," Mantle also plans to launch more innovative products aimed at attracting more traditional finance and traditional funds to enter on-chain finance in various ways. Based on this, Mantle's groundwork in the RWA track in 2024 may play an important role:

We know that RWA, as a track with trillion-dollar market potential to introduce real-world assets into the chain, is not only one of the fastest-growing segments of the market volume in 2024, but many institutions also predict that RWA will continue to grow rapidly in 2025.

In 2024, Mantle has established in-depth cooperation with Ondo Finance and Ethena, the leading projects of the RWA track, USDY and USDe have played an important role in the Mantle ecosystem, and in the future, as Mantle continues to promote its integration strategy of on-chain finance and traditional finance, this cooperation will help further integrate a wider range of TradFi funds and promote the birth of more innovative financial products and services.

If 2024 was a year of momentum for Mantle, 2025 is a year of ambition for Mantle.

Whether it's the focus on MI4 or the AI track, there is a strong push for Mantle to become a value investment target, and thus the core token of the Mantle ecosystem, $MNT, has become an investment research topic that cannot be missed.

The concept of value Token returns, why MNT is worth paying attention to

Due to its unique value proposition under intricate design, many community members betting on the Mantle ecosystem view $MNT as the golden shovel of the Mantle ecosystem. In terms of token utility, $MNT is not just a simple governance token; it also serves multiple roles such as Gas payment and ecosystem incentives, making it the value hub of the entire Mantle ecosystem.

Unlike many L2s that use ETH as the gas token, Mantle chooses to use $MNT as the gas token.

This strategic decision has positioned MNT in a more central role within the ecosystem. As the scale of the ecosystem expands, users need to use MNT to pay Gas fees for any transactions on the Mantle network, creating a continuous and stable demand for the token and network revenue. This not only enhances the autonomy of the ecosystem but also provides a solid foundation for the long-term value of MNT.

One of the other major attractions of $MNT lies in its healthy token structure, where all non-circulating tokens are managed by the national treasury through community voting, with no unlocking in the future.

Compared to other projects that often have tens of millions of dollars in token unlocks, $MNT has no token unlock plans in the future. According to the MC/FDV data statistics from the CoinMarketCap platform, $MNT has healthier metrics compared to several other L2 projects, which means it will face less market selling pressure in the future, providing stronger support for the continued healthy development of $MNT.

In addition, the Mantle Reward Station also plays an important role in encouraging long-term holding, bringing substantial rewards to token holders, and incentivizing ecological participation.

Users can lock MNT tokens in the Mantle Rewards Station to earn MNT Power. By allocating MNT Power to different prize pool activities, users can obtain more ecological rewards. The longer the locking period, the more MNT Power is earned, leading to greater returns. Additionally, locking MNT tokens in the Mantle Rewards Station still allows participation in ecological governance.

Currently, the Mantle Rewards Station has attracted over 36,438 users to lock up approximately 128 million dollars worth of MNT tokens, accumulating over 10 million dollars in Token rewards.

The most important thing is that the development momentum of $MNT has a very powerful trump card, which is the Mantle Treasury.

As the largest project vault in the Web3 field, Mantle Treasuary has a capital scale of up to $4 billion, and is the only project vault with $1 billion in mainstream assets, in addition to holding tokens and equities including mETH, FBTC and Ethena, which is not only large, structurally healthy, and has outstanding profitability, according to official data, Mantle Treasuary has made a profit of more than $50 million this year, with a series of advantages of $MNT Provides a solid foundation of value.

More importantly, the Mantle Treasury is entirely governed by MNT holders, which further ensures that the development of the Mantle ecosystem and the flow of funds align with the community's wishes, further propelling $MNT to become one of the most potentially growing L2 tokens in the market.

ZK Architecture Transformation: Laying a Solid Foundation for "Inclusive On-chain Finance"

Finally, I would like to talk about the technical design of Mantle.

Although many people think that the homogenization of L2 technology is nothing to talk about, Mantle Network must have its own uniqueness in terms of the underlying technology design to be able to carry the billion-level ecological scale.

As an L2, Mantle is committed to promoting the original intention of L2, bringing higher performance and scalability, providing users with a smooth experience that is efficient and low-cost, from guiding them into the ecosystem to participating in specific interactions.

However, unlike other L2s, the core advantages of Mantle can be summarized in the following three aspects:

The first is modularity: by separating the core functions of a blockchain, such as transaction processing, state verification, and data availability, into a dedicated layer, it optimizes performance and reduces costs, while also bringing greater flexibility and security.

The second is the implementation of decentralized sequencers: by introducing a "scheduler" to determine the sequencer when the next block is generated, it can further realize secure and trustless block production, reduce the possibility of single point of failure or censorship on the network, and improve the decentralization of the network.

Most importantly, Mantle is also the first L2 to adopt EigenDA: as a data availability solution, EigenDA shares Ethereum's strong security foundation through the Eigenlayer re-staking mechanism, through EigenDA, Mantle can submit only the necessary state roots to the Ethereum mainnet, and a large amount of transaction data is stored in EigenLayer, which brings high data availability, while greatly reducing fee costs and improving data processing efficiency. Paving the way for on-chain finance with extremely high throughput and low cost requirements.

The three core technical advantages provide strong support for the rapid development of the Mantle ecosystem in 2024, and in 2025, when Mantle is committed to introducing AI to promote on-chain financial innovation and guide the deep integration of on-chain finance and traditional finance, the refinement and iteration of technology is even more important.

In the latest technical roadmap released by Mantle, the deep collaboration with Succinct has attracted significant attention from the community:

With the testnet launching in the first quarter of 2025 and plans to upgrade to the mainnet, Mantle Network will evolve from an optimistic rollup model to a ZK-validity rollup through Succinct's SP1.

This architectural change brings more implementation possibilities and a higher development ceiling to Mantle's on-chain financial vision:

On the one hand, Mantle's end-of-chain time will be significantly reduced from seven days to one hour, and interactions will be more seamless, efficient, and less costly (only pennies per transaction), further enabling institutional-grade asset settlement, supporting and addressing capital efficiency opportunities across the traditional finance and blockchain industry.

On the other hand, combining the powerful capabilities of Succinct's SP1 zkVM with the modular features of OP Stack also brings a higher level of security to Mantle, making it more favored by traditional institutions, while more traditional users can more easily and securely explore financial activities on the Mantle chain, injecting more underlying assurance for Mantle's continued growth in 2025.

In the future, Mantle will continue to promote the implementation of multiple technical roadmaps, achieving continuous improvements in performance, cost, security, and experience through innovative technologies, further bringing prosperity to the financial ecosystem on the Mantle chain.

Conclusion

2025 is destined to be the most uncertain year for the crypto industry, but it will also be the year with the most explosive potential for on-chain finance.

With the fundamental shift in asset control brought about by decentralization, the leap in capital efficiency, the innovation and flexibility of financial products, and the revolutionary change in profit distribution, on-chain finance is often regarded by traders as a more attractive option.

The inauguration of crypto-friendly President Trump has drawn the world's attention to the crypto industry with every move he makes: from bringing in multiple crypto talents to form his cabinet team, to the $TRUMP Meme effect attracting a large number of newcomers and new funds, and making more traditional financial institutions see the potential of crypto finance. Many anticipate that under a more relaxed crypto regulatory environment led by the United States, on-chain finance will experience breakthrough development in the future.

Under this optimistic expectation, the shift from ZK architecture to the MI4 product clearly reveals Mantle's plans and ambitions for 2025.

From the perspective of developers, the soul of ecological construction, the trend of Mantle becoming a decentralized financial hub connecting on-chain and off-chain has begun to appear:

At the just-concluded Mantle APAC Hackathon, more than 360 developers actively participated and submitted 170+ innovative projects. In addition, Mantle's testnet incentive program launched in mid-2024 attracted more than 5,000 developers around the world, deployed 12,000 smart contracts, and exceeded 1 million average daily testnet transactions.

A large and actively engaged developer community like this has led to higher expectations for the Mantle ecosystem's innovative explosion and the accelerated realization of its on-chain financial vision. Having already achieved notable accumulation in product reputation, on-chain performance, and community engagement in 2024, can Mantle, with liquidity as its narrative mainline, connect interest-bearing assets, DeFi, AI, and other sectors, and usher in a new era of on-chain finance truly breaking out?

A new year, a new chapter of storytelling is about to begin.