Mantle: The Ethereum Layer-2 Solution for Next-Level Scalability
By Andy Wang | Crescent City Capital Market Analyst Intern
What is Mantle?
Mantle Network is an L2 that is compatible with the Ethereum Virtual Machine(EVM), which means developers are able to make use of the smart contract and tools that work on Ethereum with minimal disruption.
Mantle Network incorporates a modular architecture in which optimistic rollups are used alongside an improved data availability solution. With the optimistic rollups, computation and state storage are both taken off-chain. Transactions are also processed in batches. This ultimately allows a lower computation load to be sent and processed on the Ethereum Mainnet, which in turn boosts Mantle Network’s throughput at a lower cost.
In May 2023, Mantle merged with the BitDAO ecosystem, creating a unified ecosystem under one brand and token: Mantle (MNT). The co-founders of the centralized exchange Bybit, Daniel Yan and Ben Zhou, established BitDAO in June 2021. The decentralized autonomous organization (DAO) is well-known for its substantial treasury. After merging with BitDAO in May, Mantle unveiled mainnet alpha in July 2023 at the EthCC in Paris.
How It Works
How does Mantle leverage Ethereum’s security and achieve high throughputs, all whilst keeping costs low?
Mantle attributes its ability to achieve ‘Hyperscale Performance’ to two factors:
- Roll-up technology
- Integrating with a decentralized data availability layer
Like other Layer-2 ‘roll-ups’ (such as Aribritrum and Optimsim), Mantle is a modular blockchain. This means it separates its blockchain’s function into different layers to maximize efficiency and drive down costs. For example, rollup technology allows a Layer-2 blockchain to handle transaction execution separately from the Layer-1 blockchain (here, Ethereum) where they are eventually settled. In this case, the Mantle Network handles transaction execution, but the transactions are validated. By batching (or ‘rolling-up’) transactions off-chain before committing them to the Layer-1 blockchain, gas fees are considerably lessened. Mantle takes this concept a step further by employing a unique three-layer modular architecture.
In addition to keeping transaction execution and settlement separate, Mantle has also integrated with EigenLayer, an Ethereum-based data availability layer, further streamlining activity on the network.
What Is The EigenLayer?
The EigenLayer is a decentralized Ethereum protocol that enables ETH restaking. It allows the EigenDA-powered Mantle data availability layer to derive security from Ethereum. This means Ethereum stakers can restake ETH using pegged digital assets like rETH and stETH to secure Mantle’s data availability layer. Besides helping make the Mantle data availability layer highly secure, the EigenLayer also offers high transaction throughputs that could reach 1 TB per second or more.
Advantage
- Affordable transaction fees
- Mantle Network slashes gas fees considerably. The project believes it can cut transaction costs by more than 80% thanks to batched transactions and its modular design. By bundling transactions into batches, gas fees are spread across the multiple transactions in each set.
- It hyper-scales Ethereum
- Mantle introduces a separate decentralized data availability layer with the help of EigenDA, allowing it to improve Ethereum’s efficiency. The EigenLayer can potentially achieve throughputs as high as 1TB/s or more. By leveraging the EigenDA, Mantle may offer its users higher transaction throughputs than the base layer.
- It’s Ethereum-secured
- Mantle transactions use the same validator sets and consensus process as Ethereum transactions. This means Ethereum validators add all Mantle transactions to Ethereum, allowing them to benefit from the security of one of the most secure blockchains in the industry.
- EVM Compatibility
- Mantle Network is EVM compatible , allowing developers to deploy Ethereum DApps on it. It also enables developers to use Ethereum smart contract development frameworks like Remix, Truffle Hardhat, and Foundry on Mantle.
Disadvantage
- Mantle is still new
- Mantle launched on the mainnet alpha in July 2023, so it has a long way to go before it can deliver its full potential. Moreover, the Mantle DAO is currently discussing critical proposals like ETH staking strategies and the possibility of leveraging zkEVM.
Potential use cases of Mantle – Gaming
Mantle’s modular design makes it ideal for gaming since it can support high transaction throughputs and low gas fees. This could encourage developers to build gaming DApps on Mantle where players can enjoy a near-frictionless experience. Mantle is working with Game7 and HyperPlay, projects that were BitDAO initiatives before the merger. The two projects focus on building vital tools for game developers.
Mantle has already started its journey of realizing this use case by adding the web3 gaming metaverse, Bullieverse, to its ecosystem. The metaverse project launched on Mantle in March 2023.
Market Recap
The current price of Mantle is $0.379893 and it is currently ranked #43 out of all cryptocurrencies. The amount of supply currently in circulation for Mantle is 3,105,990,005 with a total market capitalization of $1,179,846,001.
In the past 24 hours, the price of Mantle has increased by 0.39%. Mantle has grown at a steady pace over the last 7 days, gaining 0.64%. This increase has Mantle investors excited about the return on investment that they have made this week.
Within the last 30 days, the price of MNT dropped by 4.13%, reducing its previous value of $0.396258 by $0.016365. This current downtrend means that Mantle is in dip right now. The price of Mantle has dropped by 26.39% in the last 3 months, eliminating $0.136196 from its previous value of $0.516089.
Analysis with Future Forecast
From a fundamental point of view, it is hard to say, especially at this early stage whether MNT is a buy or not. A lot will depend on how the market as a whole is able to perform in the coming weeks, as well as the global macro trend and investment sentiment. Keep in mind that MNT will need to attract people who would not have bothered with BIT while keeping BitDAO investors on board. As a layer 2 scaling solution, it is also dependent on Ethereum being slow. If Ethereum’s Proof-of-Stake consensus mechanism helps it speed up, then Mantle and its ilk will become effectively redundant. Since Mantle Network is EVM compatible, it is able to support the same smart contracts and dApps as Ethereum. However, it does so at a faster throughput. Mantle LSD (liquid staking derivative) is not yet live (at the time of writing), but it will offer those who stake on Ethereum to re-stake their staked ETH. The ecosystem is also anticipating many other projects as it expands and gains adoption. As for the Mantle governance and treasury, they are essentially transitioning from BitDAO. After all, ever since the launch of the Mantle mainnet, BIT (BitDAO’s native token) holders can migrate this asset into the MNT coin in a one-to-one ratio.
Moving forward to a bit more technical point of view, in the screenshot below, it’s a historical price movement since Mantle went public on July 17, 2023. In its week on the open market, MNT has risen by 13.5%. That, however, does not tell the entire story. For instance, on its first day, it fell by nearly 3% before recovering by a little under 6%. Not only that, but Mantle’s all-time high ($0.594) was more than 89% higher than its all-time low ($0.3136) and up by 52% from its launch price. Conversely, its current price is down 56% from its best ever price.
Then we can also use RSI. As in the previous report RSI not only measures the speed and magnitude of a security’s recent price changes to evaluate overvalued or undervalued conditions in the price of that security, but also indicate securities that may be primed for a trend reversal or corrective pullback in price. It can signal when to buy and sell.
Here, we take a look at its historical movement (first screenshot) and recent month’s (second screenshot) movement. Historically, the oversold condition is more than overbought condition, indicating investors are still waiting for this new emerging token to be mature enough. Besides, by simply looking at the candle trend in the first screen, even MNT bounced back with some support levels, we can still tell the overall structure of the coin suggests a weakening pattern, displaying bearish tendencies. This implies that the price is likely to continue its descent in the near future.
But, when we take a closer look at the second screenshot, although MNT plummeted for almost 7 consecutive days, reaching its historical low, MNT managed to fight back and break out its resilience levels. With the recent Bitcoin price touching back to $35,000, MNT prices rose back to a range between $0.3781 and $0.3804. I believe MNT has set up a support level at $0.3682, and it is currently trying to break through its first resilience level at $0.3903 and then the next would be $0.4093. Besides, it is worth mentioning that the RSI is running above the average line, as well as the MACD is showing some buy signal with its golden cross above the horizon.
Conclusion
With the ongoing Israel-Hamas conflict, investors recently are flying to “heaven assets”, which are long-term bonds, cryptos and those bullions, meaning investors are losing appetite in the overall equity market. And the Crypto Fear & Greed Index shows “Greed”, indicating it is not wrong that investors are more likely to get a taste in the crypto market, rather than taking risks in the equity market. Also, the Fed fund futures now show 0.01% chance of raising the interest rate on the November 1, 2023 meeting. I personally hold an optimistic view on the future of the crypto market. And MNT itself has its bottom at $0.3075, I will recommend who thinks this EVM L2 network will shine out to get an exposure into their portfolio.
Reference
https://cryptototem.com/mantle-network/
https://docs.mantle.xyz/network/introduction/overview
https://medium.com/@crytochino/what-is-bybit-mantle-token-mnt-931d85132f89
https://www.tradingview.com/chart/VrTWdVLu/?symbol=CRYPTOCAP%3AMNT