Mantle, a blockchain developer governed by a decentralized autonomous organization (DAO), has officially launched its Liquid Staking Protocol (LSP) on the Ethereum mainnet. This innovative protocol enables users to deposit Ethereum (ETH) and actively participate in network staking through validator nodes. The move comes as a significant step forward for Mantle, following its successful deployment of a Layer 2 network.
Unlocking liquidity with Mantle’s liquid staking protocol
Mantle’s Liquid Staking Protocol introduces a groundbreaking concept that allows users to stake their ETH and receive Mantle-staked Ether (mETH) as a token that represents their stake. By doing so, users can unlock liquidity from their staked assets, providing them with more flexibility and freedom in managing their holdings.
The protocol is governed by the Mantle Decentralized Autonomous Organization (DAO), emphasizing decentralization and community-driven development. It was initially proposed in the Mantle governance forum in July 2023 and has since progressed through several phases of development.
Mantle initiated the rollout of the Liquid Staking Protocol (LSP) mainnet contracts in early October, initially in a restricted alpha phase. Subsequently, the project transitioned to a permissionless phase, enabling broader access and participation from the Ethereum community.
Addressing concentration of Ether stakes
One of the primary motivations behind Mantle’s Liquid Staking Protocol is to combat the concentration of ETH stakes in major providers like Lido, Coinbase, Binance, and others. This concentration has arisen due to the network effect and increasing name recognition of these providers. Mantle aims to diversify the available solutions to address this issue and offer users more choices.
Jordi Alexander, Chief Alchemist at Mantle, remarked on this issue, stating, “The concentration of ETH staking is a result of network effect through a feedback loop of increasing name recognition and use case. By focusing on mETH’s adoption in LSDfi both in the Mantle ecosystem and beyond, and its capital efficiency in maintaining the highest sustainable yield, Mantle LSP intends to be a part of the solution by creating more options for users.”
DAO’s treasury engagement
Following the approval of governance proposal MIP-25 in August, Mantle DAO has chosen to stake ETH from its treasury using its Liquid Staking Protocol. This strategic move supplements the DAO’s existing $80 million in ETH staked with Lido Finance, one of the largest liquid staking protocols by assets under management.
Mantle’s merger with BitDAO in May 2023 has solidified its position as a significant player in the cryptocurrency space. According to DeepDAO, the community treasury boasts assets totaling $470 million in Ether and over $200 million in stablecoins.
This substantial treasury not only highlights Mantle’s financial strength but also underscores its commitment to driving innovation and expanding the blockchain ecosystem.