Forward the Original Title ‘TradFi in One Hand, DeFAI in the Other: Is Mantle Leading On-Chain Finance to Its Breakout Singularity?’

Recently, L2 Mantle, ranked fourth in TVL, highlighted two upcoming innovative products in its Q2 quarterly letter released to the community: Mantle Index Four and Mantle Banking.

The announcement has stirred significant discussion, reigniting the narrative of competition among Layer 2s in the new market cycle.

From Base’s deep involvement in the AI ​​Agent track with frequent hits, to the outstanding performance of the game-focused Sonic mainnet online tokens, in the L2 competition, the L2 concept has rarely been mentioned separately.Instead, it increasingly uses a bottom-level implementation method to serve the differentiated narrative logic of the upper level.

So, what kind of narratives does the market favor now?

We can also notice that whether it is using Bitcoin ETF as a starting point to bring large-scale traditional institutional funds to the chain, or real-world assets to be put on the chain to achieve more efficient circulation, the encryption market remains unchanged and has always been pursuing:How to make the chips in your hand more effective.

Following this essence, looking back at the development of the Mantle ecosystem over the past year, from the rapid progress in the data dimension of many core products such as mETH, cmETH and the rebranded ƒBTC (previously known as FBTC), it is not difficult to find that this disruptor who has jumped out of the traditional L2 competition early is now using “achieving higher capital efficiency” is the starting point, and the momentum continues to advance towards the vision of “omnichain liquidity hub”.

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

In this “chaos-as-ladder” moment, how will Mantle continue to optimize capital efficiency and capture diverse yield opportunities? How can it sustain its growth momentum while bridging the gap between crypto finance and traditional finance? With the slogan “Bringing Crypto into Everyday Finance”, Mantle is poised to launch a new chapter in inclusive, on-chain financial services—rewriting its brand narrative for the next wave.

Using Mantle Index Four (MI4) and Mantle Banking as the starting point, this article aims to explore Mantle’s journey in building its on-chain financial empire—and the new chapter that lies ahead.

2024: Mantle’s search for an omnichain liquidity hub

At the heart of finance lies the ability to mobilize assets—and with that mobilization comes liquidity.

Liquidity represents the efficiency of asset utilization. In fact, the essence of finance can often be distilled down to the creation and management of liquidity.

Grounded in this fundamental principle, Mantle set out to build a robust on-chain financial system by focusing first and foremost on its most foundational element: assets.

In December 2023, Mantle officially launched the liquidity staking protocol mETH. Users can obtain mETH by staking ETH, and at the same time obtain an annualized rate of return stable at more than 6%;

In October 2024, Mantle introduced cmETH, a liquid restaking token. Users can stake mETH to mint cmETH, further optimizing capital efficiency;

In August 2024, Mantle officially launched FBTC by supporting Ignition BTC. As a new synthetic asset, FBTC is anchored 1:1 with BTC. On February 14, 2025, Ignition FBTC announced a rebrand and officially changed its name to Function. FBTC was renamed ƒBTC as an omnichain Bitcoin income asset.

It can be seen that from LST to LRT, and from ETH-Fi to BTC-Fi, Mantle has laid the foundational framework of its on-chain financial infrastructure through the launch of multiple yield-bearing assets.

Of course, simply creating assets does not automatically generate liquidity—demand must be cultivated. In facilitating asset utilization, Mantle has zeroed in on two key growth catalysts: broader adoption and richer yield opportunities.

First of all, compared to other assets, Mantle’s sophisticated design of assets gives it outstanding advantages:

mETH adopts a permissionless, value-accruing ERC-20 receipt token model. This allows yield to automatically accumulate within the mETH token itself. This inherent yield-generating nature grants mETH greater capital efficiency and holding incentives, while also enabling seamless integration with applications across the broader ecosystem.

cmETH, as a Liquid Restaking Token (LRT), shares the same native yield-bearing capability and high composability within the ecosystem as mETH.

ƒBTC exemplifies cross-chain liquidity consolidation, enabling users to mint ƒBTC pegged 1:1 to BTC, regardless of which chain their assets reside on. This unlocks access to various BTC-based DeFi yield strategies across the blockchain space.

Beyond the asset design itself, Mantle deeply understands that better assets require stronger ecosystems. By developing a vibrant and diverse ecosystem, Mantle has successfully created meaningful circulation scenarios for its yield-generating assets—leading to impressive on-chain achievements.

According to Mantle’s official ecosystem portal, over 230+ projects have already joined the Mantle ecosystem. These span sectors such as DEXs, restaking, real-world assets (RWA), gaming, and more. Notably, the DeFi segment is particularly strong, with over 13 lending protocols integrated into the network.

As core yield assets within the Mantle ecosystem, mETH, cmETH, and ƒBTC enjoy natural advantages in deep integration:

mETH has already partnered with 42 projects, including industry-leading names such as Eigenlayer, Symbiotic, Karak, Zircuit, INIT Capital, and Pendle. According to DeFi Llama data, mETH surpassed $100 million in TVL within just one week of its launch, peaked at $2.1 billion in 2024, and currently holds a TVL of approximately $1.5 billion, making it the fourth-largest LSD (Liquid Staking Derivative) on Ethereum.

ƒBTC has established partnerships with 28 projects, including prominent BTC-Fi players such as Solv, Bedrock, Pell Network, Lombard, Satlayer, BounceBit, Fuel, and BOB. Since its official launch in August, ƒBTC’s TVL (Total Value Locked) quickly surpassed $100 million in a short period. By late October, ƒBTC experienced explosive, “out-of-nowhere” growth—skyrocketing from $270 million to $1.18 billion by early November, marking a more than 400% increase. As of now, ƒBTC holds a TVL of approximately $1.42 billion.

At the same time, the Mantle ecosystem has two major traffic-driving “secret weapons”: meme tokens and mini-games. Meme projects within the ecosystem have sparked widespread community participation, while the idle blockchain cat-raising game Catizen has surpassed 20 million registered users.

This vibrant ecosystem has created diverse usage scenarios and strong market demand, which in turn has cascaded down to Mantle Network as the foundational infrastructure—driving its rapid growth in 2024.

In terms of TVL performance: According to data from L2Beat, Mantle’s TVL was approximately $340 million in January 2024. By December 31, 2024, it had climbed to $2.06 billion, representing an annual growth of over 600%. Notably, on December 9, 2024, Mantle reached its yearly peak TVL of $2.36 billion, marking an increase of over 690% from the start of the year. As of now, Mantle’s TVL has stabilized at around $1.9 billion.

Notably, on-chain data analysis reveals that Mantle’s TVL primarily originates from DeFi applications within its ecosystem—including DEXs, lending platforms, and restaking protocols. This type of In-dApp TVL not only adds significant substance to Mantle’s overall TVL growth, but also strongly reflects the high level of user activity within the Mantle ecosystem.

According to Dune data: Mantle’s average daily active users exceed 45,000, and the number of daily active users reached a peak of 191,000 on September 11, 2024; in addition, the number of new daily users also reached a peak of 200,000 on September 10, 2024; the current total number of Mantle users is approximately 5.39 million, a nearly 10x increase from 550,000 at the beginning of 2024.

Using interest-earning assets as the starting point to expand the ecological territory, 2024 can be said to be the year that Mantle strides towards the “encrypted time liquidity hub”.

As 2025 begins, the key question is: How will Mantle continue leveraging assets to deepen its on-chain financial vision and once again deliver impressive results?

From the debut of Mantle Index Four (MI4) to its strategic push into the AI sector, Mantle’s direction for the new year is already beginning to take shape.

2025: Multi-faceted extension of Mantle’s on-chain financial vision

Before opening up a new situation, it is also very important to amplify existing core strengths.

At the start of 2025, Mantle has laid out strategic plans for its three major yield-bearing assets—mETH, cmETH, and ƒBTC:

On one hand, mETH will introduce a new yield pool model in Q1 2025, while continuous ecosystem development will further enrich the utility and yield opportunities of both mETH and cmETH, attracting broader user participation.

On the other hand, ƒBTC will continue to deepen its role as a foundational infrastructure for institutional Bitcoin yield strategies:

Following the rebranding from Ignition FBTC to Function, ƒBTC has sharpened its focus on institutional-grade trust and security, long-term development and sustainable growth, and cross-chain composability. These three pillars are intended to support institutional entities, DeFi protocols, and sophisticated DeFi participants, enabling more efficient capital flow and objective yield generation.

Previously, ƒBTC secured funding from several highly influential financial firms, including Ant Alpha and Galaxy Digital. Under the guiding principle that

ƒ(BTC) = Liquidity + Composability + Capital Efficiency, ƒBTC aims to collaborate with institutions to create a secure and trusted Bitcoin asset that integrates deeply with lending, staking, and liquidity-yield strategies.

In addition to the three flagship yield assets, Mantle has just announced three brand-new products, marking the next course in its 2025 on-chain financial feast. With this, the full six-pillar framework of the Mantle ecosystem is now clearly presented to the community.

Mantle Index Four (MI4)

With the crypto-friendly President Trump taking office, the crypto market may be led by the U.S. market to enter a loose crypto regulatory environment. It is expected that more traditional users, funds, and institutions will pour into crypto finance. Therefore, 2025 is the year of deep integration of Mantle’s on-chain finance and traditional finance, and Mantle Index Four (MI4) is a bridge built by Mantle between traditional finance and on-chain finance.

As an institutional-level compliant product, the fund caters to the current huge market demand for diversified exposure products to cryptocurrency, and its main audience includes both crypto users and traditional financial investors:

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

For traditional financial users, Mantle MI4 can provide them with a convenient, intuitive and compliant way to participate in crypto-finance;

More importantly, like Mantle ecological interest-earning assets, Mantle MI4 has strong profitability, which undoubtedly makes the product more attractive to traditional financial users and can also attract more incremental users to enter the Mantle ecosystem.

In the early stages 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. However, initiatives to promote the deep integration of the fund with more assets in the Mantle ecosystem are brewing. According to official disclosures, after the fund is launched, Mantle will target an asset management scale of US$1 billion. With the strong credibility of Mantle Treasury, the largest project treasury in the crypto industry, this goal has a realistic basis for rapid realization.

Mantle Banking

As a crypto-native banking solution, Mantle Banking is designed to deeply integrate blockchain technology with traditional banking services—offering a full suite of blockchain-based payment, lending, and wealth management solutions. It represents the “on-chain banking” vertical within Mantle’s broader vision for decentralized finance.

Specifically, Mantle Banking aims to help users spend, save and invest in fiat and cryptocurrency assets in one 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, with the empowerment of Mantle Banking: users can directly deposit fiat salary into Mantle Banking’s integrated account, and then tokenize this deposit into a stable currency, so that it can be consumed in multiple currencies around the world through virtual cards like fiat currency at a rate lower than the market.

Mantle Banking is committed to bringing crypto services to the daily lives of a wider range of users, taking a DeFi-first approach to bridging the gap between fiat and cryptocurrencies. Adhering to the mission of transforming the financial architecture into a seamless, secure and user-friendly Web3, Mantle Banking will become a convenient entrance for large-scale incremental users to enter the crypto ecosystem, and is also an important opportunity in bringing decentralized finance into everyday life.

MantleX

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

As DeFAI emerges, we have seen the trend of deep integration and development of AI and on-chain finance: taking advantage of AI’s advantages in data analysis, risk prediction, automatic execution of smart contracts, etc., to bring users more efficient asset management, intelligent risk control and personalized financial services. It can be said that the breakthrough development of AI will bring about major breakthroughs in on-chain finance.

MantleX is Mantle’s important attempt in the field of AI. Its main work is divided into two aspects:

• Attract more AI projects into the Mantle ecosystem: It is reported that MantleX is currently communicating with a number of well-known AI Agent teams, and more than 40 AI projects have confirmed cooperation intentions, and will be deeply integrated with the Mantle ecosystem in 2025.
• Operating the Mantle AI Fund: This fund aims to encourage the Mantle ecological team to actively develop more practical AI Agents. In the future, Mantle hopes to realize the fully autonomous operation of Mantle X by Agents.

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

More AI support initiatives including the Hacker House plan are also being promoted: As a large-scale AI-themed event, Hacker House aims to discover outstanding AI Agent projects and talents in the ecosystem.

In addition, with the core vision of “bringing encryption into daily finance”, Mantle will also plan to launch more innovative products, aiming to attract more traditional finance and traditional funds to enter on-chain finance in various ways.Based on this, Mantle may play an important role in paving the way for the RWA circuit in 2024:

We know that RWA, as a track with trillions of market potential for introducing real-world assets onto the chain, will not only be one of the fastest growing market segments in 2024, but many institutions also predict that RWA will continue to develop rapidly in 2025.

In 2024, Mantle established deep partnerships with leading Real World Asset (RWA) projects Ondo Finance and Ethena. Their stable assets—USDY and USDe—have already begun playing key roles within the Mantle ecosystem. Looking ahead, as Mantle continues to advance its strategy of integrating on-chain finance with traditional finance, these collaborations will help facilitate the influx of broader TradFi capital and foster the creation of more innovative financial products and services.

If 2024 is a year of rapid development for Mantle, then 2025 is a year of great ambition for Mantle.

Whether it’s the launch of MI4 or the strategic push into the AI sector, both initiatives are accelerating Mantle’s positioning as a high-value investment target. As a result, the ecosystem’s core token, $MNT, has emerged as a must-watch subject for investment research.

The concept of value token returns, why MNT deserves attention

Due to the unique value proposition under the exquisite design, many community members who are betting on the Mantle ecosystem regard $MNT as the golden shovel of the Mantle ecosystem. In terms of token utility, $MNT is not only a simple governance token, but also serves multiple roles such as gas payment and ecological incentives. It is 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 allows MNT to play a more central role in the ecosystem. With the expansion of the ecological scale, when users conduct any transactions on the Mantle network, they need to use MNT to pay gas fees. This creates continuous and stable token demand and network revenue, which not only enhances the autonomy of the ecosystem, but also provides a solid foundation for the long-term value of MNT.

Another major attraction of $MNT is its healthy token structure. All non-circulating tokens are returned to the treasury and managed by community voting, and there will be no unlocking in the future.

In contrast to many other projects that have token unlocks worth tens of millions of dollars, $MNT has no scheduled unlocks in the future. According to CoinMarketCap’s MC/FDV ratio data, $MNT demonstrates a more sustainable valuation compared to many other L2 tokens—implying lower potential selling pressure and providing stronger support for sustained, healthy growth.

In addition, Mantle Reward Station also plays an important role in encouraging long-term holdings, bringing generous benefits to token holders, and stimulating ecological participation:

Users can obtain MNT Power by locking MNT tokens at Mantle Rewards Station, and can obtain more ecological rewards by allocating MNT Power to different prize pool activities. The longer the locking time, the more MNT Power you get and the more generous the benefits will be. In addition, you can still participate in ecological governance by locking MNT tokens in Mantle Rewards Station.

Currently, Mantle Rewards Station has attracted more than 36,438 users to lock MNT tokens worth approximately US$128 million, and has distributed Token rewards worth more than US$10 million in total.

The most important thing is that $MNT has a very important trump card for its development momentum, and that is Mantle Treasure.

As the largest project treasury in the Web3 field, Mantle Treasury has a capital scale of US$4 billion and is the only project treasury with US$1 billion in mainstream assets. In addition, it also holds tokens and equity including mETH, FBTC and Ethena. It is not only large in size and structurally healthy, but also has outstanding profitability. According to official data, Mantle Treasury’s profit this year has exceeded US$50 million. The series of advantages provide a solid value foundation for $MNT.

More importantly, Mantle Treasury is fully regulated by MNT holders, which further ensures that Mantle’s ecological development and capital flows are in line with the community’s wishes, further promoting $MNT to become one of the L2 tokens with the most growth potential on the market.

ZK architecture transformation: lay the foundation for “inclusive on-chain finance”

Finally, I want to talk about Mantle’s technical design.

While many may argue that Layer 2 technologies have become increasingly homogeneous, any network capable of supporting a billion-dollar-scale ecosystem must have distinct technical advantages. In the case of Mantle Network, its unique architectural design sets it apart.

As a Layer 2 solution, Mantle remains committed to the original purpose of L2s—delivering higher performance and scalability. From onboarding users into the ecosystem to enabling smooth interactions, Mantle ensures a high-efficiency, low-cost, and frictionless experience.

What truly distinguishes Mantle from other Layer 2s can be summarized in three key technical advantages:

The first is modular design: By separating the core functions of the blockchain such as transaction processing, state verification and data availability into dedicated layers, on the one hand it optimizes performance and reduces costs, on the other hand it also brings greater flexibility and security.

Secondly, the implementation of decentralized sequencer: By introducing the “scheduler” to determine the Sequencer when the next block is generated, we can further achieve secure and trustless block production, reduce the possibility of single points of failure or censorship on the network, and improve the decentralization of the network.

Most importantly, Mantle is also the first L2 to feature EigenDA: As a data availability solution, EigenDA shares the strong security foundation of Ethereum through the Eigenlayer re-pledge mechanism. Through EigenDA, Mantle can submit only the necessary state roots to the Ethereum main network, and a large amount of transaction data is stored in EigenLayer. This brings a high degree of data availability, while greatly compressing fees and improving data processing efficiency, paving the way for on-chain finance with extremely high requirements for high throughput and low cost.

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

In the latest technology roadmap released by Mantle, the in-depth cooperation with Succinct has attracted the attention of the community:

With testnet launching in Q1 2025 and plans to upgrade to mainnet, Mantle Network will evolve from an optimistic rollup model to a ZK validity rollup via Succinct’s SP1.

This architectural change brings more realization possibilities and a higher growth ceiling to Mantle’s on-chain financial vision:

On one hand, Mantle’s transaction finality time will be drastically reduced from 7 days to just 1 hour post-transition. This will enable more seamless, efficient, and low-cost interactions—with each transaction costing only a few cents. These improvements pave the way for institutional-grade asset settlement, addressing long-standing capital efficiency challenges in both traditional finance and blockchain.

On the other hand, by combining the powerful SP1 zkVM from Succinct with the modular architecture of the OP Stack, Mantle significantly enhances its security profile. This upgrade is expected to increase appeal among traditional financial institutions, while also allowing everyday users to explore on-chain finance on Mantle more securely and with greater ease—providing a strong foundational boost for Mantle’s continued growth in 2025.

In the future, Mantle will continue to promote the implementation of multiple technology roadmaps and achieve 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 in the encryption industry, but it will also be the year with the greatest explosive potential for on-chain finance.

With the fundamental changes in asset control rights, leapfrog improvements in capital efficiency, innovation and flexibility of financial products, and revolutionary changes in income distribution brought about by decentralization, on-chain finance is often regarded as a more attractive option by traders.

The inauguration of crypto-friendly President Donald Trump has brought global attention to the crypto space. From appointing crypto-savvy advisors to his cabinet, to the viral $TRUMP meme effect attracting a wave of new users and capital, his administration is helping traditional financial institutions recognize the true potential of crypto finance. Many anticipate that under a U.S.-led, crypto-supportive regulatory environment, on-chain finance could be on the brink of a major breakthrough.

Against this optimistic backdrop, Mantle’s ambitions for 2025 are already coming into focus—from its transition to a ZK-based architecture to the launch of MI4.

From the perspective of developers—the soul of ecosystem growth—Mantle is already showing signs of becoming a decentralized financial hub that bridges the on-chain and off-chain worlds:

In the just-concluded Mantle APAC Hackathon event, more than 360 developers actively participated and submitted 170+ innovative projects. Additionally, Mantle’s 2024 testnet incentive program attracted more than 5,000 global developers, who deployed 12,000 smart contracts and drove the testnet’s daily transaction volume to exceed 1 million.

Such a large and active developer community also makes the community have higher expectations for the explosion of innovation in the Mantle ecosystem and the accelerated implementation of the on-chain financial vision. Can Mantle, which has already achieved a very good accumulation in terms of product reputation, on-chain performance and community voice in 2024, use liquidity as the central narrative, connect interest-earning assets, DeFi, AI and other sectors to create a new era in which on-chain finance can truly break through the circle?

A new year brings a new chapter, and Mantle’s next story is just beginning.

Disclaimer:

1. This article is reprinted from [TechFlow]. Forward the Original Title ‘TradFi in One Hand, DeFAI in the Other: Is Mantle Leading On-Chain Finance to Its Breakout Singularity?’. The copyright belongs to the original author [TechFlow]. If you have any objections to the reprint, please contact the Gate Learn team, which will handle it as soon as possible according to relevant procedures.

2. Disclaimer: The views and opinions expressed in this article represent only the author’s personal views and do not constitute any investment advice.

3. Other language versions of the article are translated by the Gate Learn team. The translated article may not be copied, distributed or plagiarized without mentioning Gate.io.