Mantle TVL enters the top four of L2, how did it achieve this?
In my impression, everyone's definition of the L2 Four Kings is still more focused on the "technical" dimension, while the current situation is that the technically strong Starknet and zkSync are falling behind, while Base and Mantle, which excel in operations and TVL, are overtaking.
Author: Haotian
Looking through @l2beat data, it is found that @0xMantle, which focuses on providing native on-chain yields for ETH assets, has reached a total TVL of $1.82 billion, surpassing Blast to become the fourth largest layer2 by locked value. Could it be considered among the "Four Kings" of layer2? Many people may wonder how Mantle has managed to rise through the combination of mETH + cmETH + Cook. Next, I will systematically outline this:
The Dual Interaction of mETH: L1 Native Yields + L2 Unified Interoperability
1) L1 Native Yields
Mantle is a layer2 chain built directly on the OP Stack Codebase. At its inception, the Ethereum layer2 ecosystem was plagued by a lack of "native yields." Therefore, Mantle and Blast adopted similar Tokenomics economic model designs, with the core idea being to allow users to deposit ETH into layer2 and earn native yields on the Ethereum mainnet. For example, users can deposit ETH into LiDO to enjoy around 4% APY from POS staking.
As a result, Mantle launched the Ethereum liquid staking protocol mETH on the Ethereum mainnet, which has currently accumulated 483,000 ETH, ranking after stETH, wBETH, and rETH.
The native yields that Mantle layer2 focuses on partly come from the POS staking rewards of mETH. Importantly, mETH, as a key protocol of LSP, will also be integrated into other LRS protocols such as Eigenlayer, puffer, Renzo, and Kelp, benefiting from their mining rewards like points and ecological governance. In addition to on-chain yields, Mantle has partnered with Bybit exchange to connect C-end users with B-end AMM market makers' funding needs, generating off-chain yields from borrowed funds.
In summary, the goal of the mETH protocol is to connect as many diversified yield sources as possible to provide lasting Pump for its layer2 Tokenomics. For instance, its liquidity protocol will also cover alt-layer1s like Bearchain and Fuel.
The logic is not difficult to understand. Besides the stable yields from Ethereum POS, the yields from LRT platforms are dynamic, unstable, and lack sustainability. To convincingly narrate the story of feeding mainnet yields to layer2, mETH must expand the possibilities of diversified yields.
2) L2 Unified Interoperability
In addition to the native yield attributes of the underlying mETH, Mantle has introduced another core feature to its layer2 chain: a liquidity center for interoperable operations on layer2. Recently, @VitalikButerin and various layer2 project teams have been working together to drive the liquidity integration of Ethereum layer2, indicating that the current scattered liquidity situation in Ethereum layer2 has become a core challenge of the Rollup-Centric grand strategy.
In fact, from its inception, Mantle has integrated "interoperability" as part of its underlying technical framework. Specifically:
Mantle adopts the atomic cross-chain logic provided by @LayerZero_Core, deploying a master contract to control total supply and deploying sub-contracts on various layer2s to control local supply and cross-chain minting instructions. If a user wants to cross-chain ETH from Arbitrum to Optimism, they can first stake ETH on the Mantle chain, and the master contract will mint mETH to increase supply. Meanwhile, the relay nodes of layerZero will synchronize messages to the sub-contract on Optimism, which will mint mETH corresponding to the user's deposit upon receiving the instruction.
The existence of mETH assets is based on the interoperability of layer2, especially when large amounts of ETH funds are idle on other layer2s. With the underlying atomic lossless cross-chain feature, users will naturally tend to aggregate ETH assets onto Mantle's mETH to earn yields. Using Omni Contract to achieve atomic cross-chain, it anchors APY yields to attract users to pool funds.
mETH has been meticulously designed from upstream funding sources to downstream business closed-loop logic.
cmETH + Cook: Activating the Operation of the L2 DeFi Economy
The question arises: what considerations led to the emergence of cmETH? If there were only mETH, the market might perceive Mantle as the leading figure rallying other L2s to launch a "vampire" attack on the Ethereum mainnet.
Clearly, this won't work; the destiny of layer2 is still to provide blood transfusions to the mainnet. Therefore, L2 must possess self-sustaining capabilities. cmETH is the key for mETH to achieve self-sustainability.
Users can convert mETH into cmETH to participate in DeFi projects on L2 through Restaking, earning yields generated by the L2 DeFi ecosystem. Although cmETH carries an additional layer of re-staking risk compared to mETH, it also enjoys more aggressive incentives and mining yield expectations from L2. For instance, Mantle has launched the Methamorphosis event, where users can re-stake mETH to receive Powder equity certificates, granting access to future governance tokens $COOK.
Many may wonder, with $MNT in existence, why $COOK? This can be explained by the dual-token model designed by Mantle. MNT is the native token of the Mantle layer2 network, used for paying network gas fees, ecological governance, and maintaining the security of its chain through POS network yields. Its goal is to sustain the economic operation of the Mantle chain.
On the other hand, $COOK aims to cover the unified rights and governance of mETH on the mainnet and the unified layer of interoperable operations on layer2. It is a governance token exclusive to the mETH protocol, primarily used for liquidity mining rewards and community incentives. According to the overall planning of mETH and cmETH, it may eventually flow into the overall layer2 liquidity system while also enjoying yield possibilities across the entire layer2 ecosystem.
That's all.
The previously renowned Blast attracted much attention not only due to its massive capital absorption ability but also because there was hope that its funds could inject a catfish effect into layer2, providing a breakthrough point for the existing dilemmas in the layer2 economy. Similarly, Mantle, with its substantial capital and excellent token model design, aims to bring "variables" to the layer2 industry.
In my impression, the definition of the "Four Kings" of layer2 has been more focused on the "technical" dimension, while the current situation is that the technically strong Starknet and zkSync are falling behind, whereas Base and Mantle, excelling in operations and TVL, are overtaking.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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