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Key Takeaways
Crypto has struggled to attract retail and institutional users beyond experienced traders ("degens"). Mantle has launched two initiatives to address this challenge.
The Enhanced Index Fund simplifies crypto investing by offering exposure to major cryptocurrencies (BTC, ETH, SOL) with staking rewards in a single fund.
Mantle Banking is developing a crypto-first financial infrastructure, presumably supported by Bybit's 60 million user base, and DeFi focused Mantle Network to provide blockchain-based services—from payments to lending—while eliminating traditional banking fees.
We can expect to see increasing convergence between fintech and crypto as fintech companies like Stripe and Robinhood enter the crypto space, while crypto projects focus on developing user-friendly services.
1. Background - Mantle’s Two Steps
The complexity of crypto makes it challenging to attract new user segments. This is particularly true for retail investors who lack crypto knowledge and institutions that must navigate both regulatory compliance and the rapidly evolving crypto landscape.
Most projects have failed to attract these potential users. They struggle to provide both an accessible onboarding experience and compelling use cases for newcomers to interact with decentralized applications. While the recent launch of $TRUMP on Solana—backed by the current US president—attracted many users to crypto, it was primarily driven by short-term speculation.
Mantle Network, an Ethereum L2, also primarily has degens as most users. While it has successfully drawn experienced traders by having its rollup and DeFi-focused ecosystem, it still faces challenges in attracting mainstream retail and institutional users. However, with its recent announcement of three initiatives—Index Fund, Mantle Banking, and MantleX— Mantle is making progress toward onboarding these retail and institution users.
Index Fund and Mantle Banking, in particular, will likely drive retail andinstitution user adoption. Two key steps remain to achieve this goal. Let's examine why these initiatives are important.
1.1 Step1. Invest in Crypto - Enhanced Index Fund
Source: MIP-32: Mantle Enhanced Index Fund Governance Proposal
“Just buy Bitcoin” - People say this when we are asked which coin we should invest into. But Bitcoin does not represent the whole crypto market. Other coins like Ethereum, Solana, and others play crucial roles in making crypto better. However, managing a diverse crypto portfolio can be challenging due to the constant emergence of new tokens and the need for regular rebalancing.
To address these challenges, an index funds can be the solution. These investment vehicles can offer exposure to a carefully selected basket of established coins, with automatic rebalancing and security. Also, if the funds holds the yield-bearing tokens, holders can get exposure to various yield opportunities. However, there haven’t been successful crypto index projects in the past. Most degens preferred to hold the coin and use it as a gas token or governance participation.
Mantle’s Enhanced Index Fund is trying to provide better solution. It is planned to consist major coins like BTC, ETH, SOL, etc. However, it is “Enhanced” since it provides the benefit of crypto - “Yields.” For example, ETH exposure will be represented by mETH and SOL exposure by bbSOL. USD will also be represented by yield-bearing assets like sUSDe and AUSD.
This Enhanced Index Fund will serve as the first step to make investing in crypto accessible for both retail and institutions.
1.2 Step2. NeoNeoBank - Mantle Banking
A neobank is a digital-first financial company that offers banking services like checking accounts and debit cards but does not have a physical location. The term neobank is often used interchangeably with fintech bank, challenger bank, or digital bank. Neobanks aim to streamline the banking process by delivering financial services in a customer-centric, digital-only format.
-- What is a Neobank? How fintech is transforming banking | Plaid
The daily finance for retail and institutions have changed a lot in the past 10 years. As more services moved online and mobile service started to get adoption, new fintech companies emerged to change how we interact with finance. Especially, Neobanks have emerged and their market share inscreased by providing online-first banking, cheaper transaction, and high-yield savings account. Neobanks are growing faster and is anticipated to grow more by 49% annually for both savings and business accounts.
Source: Neobanking Market Revenue to Total USD 5382.6 Billion by
Crypto can make banking better. The crypto ecosystem offers significant advantages in various financial activities. For example, stablecoins have emerged as one of the most cost-effective methods for transferring funds globally. Recent data shows impressive adoption rates, with millions of users conducting hundreds of millions of transactions monthly. Unlike traditional financial systems that require intermediaries, stablecoins operate independently of banks and central authorities, similar to physical cash or gold. Furthermore, crypto applications typically offer more competitive interest rates compared to conventional banking services, with earnings accumulated in real time.
However, in terms of onboarding difficulty and security, there are many issues to resolve. Crypto remains challenging and insecure for both retail users and institutions. Mantle Banking is an initiative to build financial infrastructure with a crypto-first approach. It aims to eliminate fees taken by centralized entities in traditional finance, incorporate DeFi yield opportunities, and offer services like lending.
Nut much detail about Mantle Banking have been released yet, but it's expected to receive support from both Bybit and the Mantle network. Bybit has 60 million users with trading volumes that are consistently in the top 5 of all centralized exchanges. The experience of running such an infrastructure, combined with the synergy of the DeFi-specific Mantle Network, will make it easier for more people to experience the benefits of DeFi.
*Mantle Banking aims to deliver fully blockchain-based services — from payments to lending and wealth management — enabling users to manage their finances securely and effortlessly.
— Mantle
2. Takeaway - Fintech is Entering Crypto, Why Aren’t Crypto Entering Fintech?
Stripe acquired Bridge.xyz for $2.1 billion to build full-stack stablecoin infrastructure. Robinhood developed its own crypto wallet and now lists numerous assets on its exchange. Revolut offers crypto asset purchases and plans to launch its own stablecoin. Klarna, a Buy Now Pay Later company with $100 billion in yearly volume, is preparing to embrace crypto.
Fintech companies are entering crypto to make their financial services better, from trading to asset management. However, crypto companies haven't yet focused on capturing fintech customers. While protocols like LIFI provide DEX and bridge aggregation APIs to Robinhood wallet, few retail or institutional-facing products have emerged.
Now this is changing. Crypto projects are developing better services for everyday retail and institutional users. For example, Utopia Labs (acquired by Coinbase) offers AAVE yields to US retail users, legend is building a simplified DeFi onboarding application, and Mantle's Mantle Banking will be providing streamlined DeFi onboarding, led by Bybit Co-Founder Yaxi Zhu. DeFi's benefits are clear—cheaper cross-border payments and real-time high yields among them. We can expect increased crypto adoption, with both fintech companies and crypto projects competing for users.
My framework for understanding the financial system is this: Traditional Finance (TradFi) prioritizes security and regulatory compliance; fintech pushes regulatory boundaries to improve the system; and crypto operates outside regulation to experiment with new financial models. While crypto was once volatile with few proven protocols, today's DEX, lending, and liquid staking projects have achieved product-market fit and can handle significant volume.
The time is ripe for broader crypto adoption, which makes Mantle's Enhanced Index Fund and Mantle Banking well-timed to accelerate this growth. These products will serve as two critical steps to onboard non-degen users.
Source: Mantle | Innovating the Future of On-Chain Finance
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