Revelo Roundtable #5 - Mantle Ecosystem Projects

In Revelo Intel’s Twitter Spaces which took place on March 14, 2024, Kirk from Revelo Intel hosted Derek from KTX Finance, DavidFi from Merchant Moe, Tascha and Neff from Init Capital to discuss insights from DavideFi, Neff, and Derek on elevating liquidity, governance, user engagement through innovative protocols like Merchant Moe, Init Capital, and KTX in the Mantle ecosystem, and more! Read our notes below to learn more.

Background

Kirk (Host) – Head of Business Development at Revelo Intel

Derek (Guest) – Growth & BD at KTX Finance

DavideFi (Guest) – Core Contributor at Merchant Moe

Tascha (Guest) – Founder of Init Capital

Neff (Guest) – BD Lead at Init Capital

KTX Finance – a decentralized perpetual trading protocol that is live across multiple blockchain networks including Mantle, BNB Chain, and Arbitrum

Merchant Moe – a trader’s oasis in the bustling world of DeFi on Mantle Network, offering a comprehensive and user-friendly DEX experience.

Init Capital – a Liquidity Hook Money Market

Innovating DeFi: Mantle’s Strategic Ecosystem Expansion and Technological Breakthroughs

DavideFi talks about Merchant Moe, a project aimed at becoming the central exchange of the Mantle ecosystem through a community-first approach and the power of its core technology, the Liquidity Book.
He explains the Liquidity Book as an innovative concentrated liquidity protocol that offers granular control over liquidity, incorporates a volatility oracle to mitigate impermanent loss, enables dynamic liquidity management, and facilitates composability through ERC-1155 style tokens.
Neff shares about Init Capital‘s mission to democratize access to liquidity for both DeFi users and protocols through a composable version of a money market. He explains the use of liquidity hooks inspired by Uniswap V4, allowing users to engage in various yield trading strategies and earn incentives, while protocols can integrate with Init to borrow liquidity directly. He highlights Init Capital’s growth and community support since its launch.
Derek describes KTX as a decentralized gamified project that addresses common trade-offs in trading, such as custody, speed, and fees. He explains that traders on KTX trade against a multi-asset liquidity pool rather than traditional market makers, aiming to offer full asset custody, rapid transactions, and low costs, with the pool comprising stablecoins and blue-chip assets.
DavideFi explains that Mantle, as a layer-2 chain, seeks to differentiate by focusing on a boutique collection of protocols, valuing projects that contribute to its growth and community.
He highlights the chain’s support for unique projects over big names, backed by a strong team with deep DeFi knowledge. He discusses the significance of the $mETH, a liquid stake derivative of Ethereum offering high yields, which attracts substantial TVL to Mantle.
Kirk notes the importance of Mantle performing due diligence on projects, adding an extra layer of security, and demonstrating commitment by the underlying blockchain provider.
Neff mentions three main reasons for choosing Mantle: its liquidity and strategic support, the utility of assets like LSTs and RWAs in fostering DeFi strategies, and the strategy and people behind Mantle. He praises Mantle’s approach to engaging users through incentives and a system that encourages transactions on the chain.

KTX’s Strategic Launch on Mantle: Developer Support & Modular Architecture for Market Advantage

Kirk asks why KTX chose to launch on Mantle during its early stages instead of other chains like Optimism or Arbitrum, considering the available liquidity for a perpetual decentralized exchange.
Derek says that KTX had confidence in Mantle’s team and their execution abilities from early interactions, highlighting Mantle’s developer support, smooth deployment process, and initiatives to promote projects.
He highlights Mantle’s modular architecture for low transaction latency and low gas fees, and the strategic decision to capitalize on the first mover advantage on Mantle.
Kirk acknowledges Mantle’s unique position with its go-to-market strategy, distribution, and treasury-based native yield, and asks about the advantages of $mETH versus other layer-2 solutions (LSTs).
DavideFi explains the challenge with derivative trading and the importance of incentivizing liquidity. He discusses shifting focus to make $mETH a central asset in their ecosystem, pairing it against the native chain token $MNT (MantleToken) and another asset, enhancing liquidity provider benefits and user engagement with concentrated liquidity protocols.
Kirk asks how Init plans to utilize $mETH in their strategies, including lending and borrowing.
Tasha explains the looping hook strategy that leverages $mETH to collateralize and borrow $ETH with a 3x leverage in a single transaction, allowing users to swap borrowed $ETH for $mETH and then collateralize the total $mETH.
This strategy provides high $mETH yields, Init points, and multiple benefits in one action, indicating its effectiveness in growing its product and planning for future hooks involving $mETH.

DeFi Governance and Liquidity: KTX, INIT Capital, Merchant Moe, Mantle, and $ETH Dynamics

Derek mentions that KTX has a small KLP allocation to $ETH within their KLP pool, utilizing $ETH in two ways: for liquidity providers, it’s part of the asset composition earning yield on yield, including $ETH yields and KLP yields from trading fees; and for traders, considering offering perp trading as a $mETH pair once liquidity improves.
Kirk asks about governance around Mantle, noting the lengthy processes in other L2 governance systems and seeking insights on smoother experiences.
DavideFi highlights the straightforward governance process with Mantle, praising the agility and freedom of expression allowed by one-to-one conversations with the foundation team. He notes the focus on $ETH growth and positive experiences with Mantle’s team, highlighting the importance of quick decision-making in governance.
Kirk appreciates Mantle’s focused approach to governance and highlights the importance of having clear priorities and the positive experiences observed with Mantle’s governance compared to other DAOs.
DavideFi contrasts Mantle’s governance with Avalanche and Arbitrum, appreciating Mantle’s speed of execution and the ability to avoid lengthy processes, which aligns with the need for quick decisions in dynamic markets.
Derek echoes DavideFi’s sentiments, attesting to Mantle’s competency, execution speed, and governance efficiency from KTX’s perspective.
Kirk asks about critiques of Mantle regarding the centralization of critical infrastructure parts and Mantle’s initiatives for decentralization.
DavideFi recognizes that achieving decentralization is a universal goal in DeFi, highlighting that governance is crucial yet challenging to execute perfectly. He says that no one has a definitive answer for ideal governance, advocating for increased and diverse contributions over time.
DavideFi says that decentralization is essential, but current DAO models may not fully embody what a DAO should be, urging for innovation and experimentation in governance processes.

KTX and Merchant Moe’s Innovations and Strategies for DeFi Growth

Kirk asks what upcoming developments in the KTX protocol excite Derek and what strategies are being implemented to attract more liquidity and users in the next three to six months.
Derek says that KTX is pioneering a unique gamified approach to perpetual trading and prediction markets, aiming to become the Robinhood of on-chain trading. He highlights the creation of an accessible platform for a wide range of DeFi activities, including spot trading, perp trading, yield farming, and advanced DeFi strategies like Leveraged KLP Vault with Vaultka Team and Delta-neutral KLP Vault with Solv Protocol.
Derek mentions focusing on launching mini-games and revamping the user interface in Q2 2024 to offer a gamified DeFi trading experience. He also hints at launching a new popular chain soon.
Derek explains the chicken-egg problem of liquidity and user acquisition for KTX as a PerpDex. He explains strategies for garnering liquidity and growing users, including collaborating with established partners like Vaultka before launching new chains and approaching institutions for larger investments to bootstrap liquidity.
Derek shares KTX’s achievements, including garnering around 28,000 unique users, averaging about 500 DAUs, and consistently ranking high on DefiLlama for fees generated. He highlights the importance of an intuitive platform experience, retention through mini-games, and rewards to increase user stickiness.
Kirk asks DavideFi about Merchant Moe’s developments over the next three to six months.
DavideFi shares that Merchant Moe launched Moe Classic in January, and plans to deploy core modules of their DEX and introduce a liquidity book. He highlights partnerships and innovative approaches to DeFi, including staking $veMOE tokens for voting on liquidity pools.
DavideFi explains Merchant Mo’s engaging ecosystem, allowing users to direct votes toward preferred tokens, and farm incentives, and benefit from a modular ecosystem poised for expansion.

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Show Information

Medium: Twitter (Audio)
Show: Revelo Intel Twitter Space
Show Title: Revelo Roundtable #5 – Mantle Ecosystem
Show Date: March 14, 2024