How Mantle is Building OS For Onchain Finance

Key Takeaways

• Mantle is building an integrated "banking chain" ecosystem that bridges TradFi and DeFi, addressing the current fragmentation that forces users to manage separate financial systems.

• Mantle combines robust blockchain infrastructure (featuring EigenDA and OP Succinct technologies) with established asset protocols like mETH and Function BTC, creating secure network and foundation necessary for its comprehensive financial ecosystem. Despite challenging market conditions in Q1 this year, Mantle ecosystem has shown remarkable growth.

• Mantle's recently announced strategy targets unification of fragmented financial worlds through innovative products. Mantle Index Four (MI4) functions like a crypto version of the S&P 500, offering simplified, diversified crypto exposure, but with yield-generating opportunities.

• Mantle Banking delivers a neobank experience that combines traditional banking features with DeFi capabilities through a seamless interface. Meanwhile, MantleX integrates AI to streamline user experiences, effectively masking blockchain complexity while delivering its benefits for everyday financial activities.

1. Bridging TradFi and DeFi

Today's financial landscape is fractured. On one side, we have TradFi - the familiar world of bank accounts, credit cards, and investment funds. On the other, we have DeFi - the innovative realm of cryptocurrencies, yield farming, and tokenized assets.

Most people are forced to live divided financial lives, managing their fiat finances in traditional bank accounts while separately navigating the complex world of crypto wallets and DeFi protocols. This division creates significant friction, with users struggling to move money between systems, facing high fees, and dealing with entirely different user experiences depending on which financial world they're accessing.

For average users, this fragmentation presents critical problems:

1. There's no unified interface to combine both experiences, forcing users to juggle multiple apps and platforms.

2. Converting between fiat and crypto remains a cumbersome process filled with delays and costs.

3. Technical complexity of DeFi creates high barriers to entry, preventing many from accessing its benefits.

Result of the fragmentation is a financial experience that's unnecessarily complicated, inefficient, and exclusionary.

Blockchain technology has long promised to solve these problems by creating more open, efficient financial systems. However, a missing piece has been a holistic user experience - an interface that makes blockchain's benefits accessible without requiring users to understand the underlying technology. This is the challenge that Mantle is addressing head-on, with a vision to become "banking chain" that seamlessly connects traditional finance with decentralized innovation.

By creating an integrated stack that combines the reliability of traditional banking services with the benefits of blockchain technology, Mantle aims to deliver what users actually need: a simple way to manage all their finances in one place, regardless of whether those assets are fiat or crypto. This approach represents a fundamental shift in how we think about financial services, moving away from the siloed systems of today toward a more connected, efficient, and inclusive financial future.

2. Mantle Ecosystem is Evolving

Source: X(@Mantle_Official)

Mantle has developed a comprehensive ecosystem built on three core pillars: Mantle Network providing robust infrastructure, mETH Protocol for Ethereum staking, and Function BTC, a protocol that enables yield generation from Bitcoin. According to recent announcements from Mantle, the ecosystem has shown steady growth throughout Q1 2025, despite challenging market conditions in the same period.

Mantle operates with a treasury currently valued at over $2.5 billion in assets, providing resources to support development, bootstrap liquidity, and back new initiatives. The treasury has been deployed to distribute EIGEN, ENA, and UXLINK tokens to over 30,000 MNT holders, and has committed funds to support various ecosystem projects, including a $400 million allocation to the upcoming Mantle Index Four fund.

2.1 Mantle Network: Robust Foundation for Onchain Finance

Mantle Network forms a foundation of the ecosystem, with recent focus on infrastructure improvements for scalability and security. A significant development has been full integration of EigenDA on mainnet, marking an improvement in the network's modular architecture. This upgrade provides substantial benefits over previous EigenDA-powered Mantle DA, including a 20x improvement in censorship resistance by expanding from 10 operators to over 200 operators securing data, significantly reducing risk of downtime.

The EigenDA integration also delivers a bandwidth expansion more than 200 times, enabling 15MB/s throughput. This ensures Mantle Network can scale without hitting data bottlenecks as usage grows. Security of this system is reinforced by over 163,020 mETH (approximately $335 million) that secures EigenDA, creating a security-yield flywheel where Mantle's data availability is strengthened while unlocking yield opportunities through Eigen Layer restaking.

Source: Mantle Network Launches OP Succinct Integration on Testnet

Parallel to the EigenDA integration, Mantle Network has launched OP Succinct integration on Sepolia testnet. This represents Mantle's transition from a traditional optimistic rollup to a zero-knowledge validity rollup. The OP Succinct implementation brings several key advantages:

• High compatibility with OP Stack, allowing developers to utilize ZK technology without significant modifications to existing code or smart contracts

• Improved finality speed, achieving final confirmation within 1 hour, which reduces capital idle costs and increases market responsiveness for institutions with high transaction efficiency requirements

• Enhanced network security by transitioning from a reputation-based optimistic model to cryptographically verified transactions using ZK proofs

• Cost-efficient proof generation through innovative design techniques like precompile/curve optimization and proof aggregation, solving the traditional high-cost issues of ZK technology

The integration with OP Succinct is particularly notable as it will be the industry's first combination of two modular components working together: EigenDA and OP Succinct. This positions Mantle to achieve a Type-1 equivalent zkEVM with data immutability secured by KZG-based verification mechanisms.

2.2 mETH Protocol: From Passive Yield to Active Asset

Source: mETH Protocol: Understanding cmETH

mETH Protocol, a liquid staking and restaking protocol on Mantle, has achieved a few distinct milestones in Q1. The launch of cmETH Fixed Vault attracted over $58 million in deposits within just a few weeks. mETH Protocol particularly appeals to both retail and institutional users with lower risk tolerance seeking simplified exposure to ETH-based yields.

Total restaked cmETH across various protocols now exceeds 224,000, distributed across platforms like Karak Network, Symbiotic, and EigenLayer. The protocol has also contributed significantly to Mantle Network's infrastructure by securing EigenDA with over 162,900 mETH.

Furthermore, mETH protocol continues to develop its governance token $COOK through initiatives like COOK Feast, with a focus on sustainable, non-dilutive reward mechanisms that balance DeFi standards with regulatory considerations. For Q2, development is focusing on cross-ecosystem expansion (bringing cmETH to new chains like HyperEVM), centralized finance integration, and simplifying user access across platforms.

2.3 Function BTC: Unlocking Yield From Bitcoin

Function BTC, which is previously know as Ignition BTC, addresses perhaps the largest opportunity in crypto: unlocking yield from Bitcoin's multi-trillion dollar asset class. Function aims to make Bitcoin productive within the DeFi ecosystem through its wrapped token, fBTC.

Function is an omni-chain BTC protocol that makes Bitcoin usable across multiple blockchain networks. Verified users who deposit their Bitcoin into Function BTC's designated address receive fBTC tokens on platforms like Ethereum, with these tokens representing the exact value of their deposited Bitcoin. A bridge or minting process is maintained through a Threshold Signature Scheme (TSS) and overseen by a security council that includes Mantle and Antalpha Prime. Users retain full rights of redemtion, allowing them to burn their fBTC tokens whenever they wish to retrieve their original Bitcoin.

Key achievements in Q1 include onboarding Galaxy as an institutional partner. Function also gained support on Bybit with an earn program incentivizing the conversion of BTC to fBTC. The protocol has reached impressive milestones with more than 14,500 BTC (exceeding $1.2 billion) in TVL and expanding its holder base to over 160k users.

Function has also expanded its reach through new deployments on top EVM chains like Berachain and Sonic, with active development underway for non-EVM chains such as Solana and SUI. Despite current market headwinds related to borrowing and lending rates, the team remains optimistic about Bitcoin's continued institutional adoption.

Each of these components contributes to Mantle's broader vision of creating a more integrated financial ecosystem. The technical advancements in Mantle Network provide a foundation, while mETH Protocol and Function BTC deliver the assets and liquidity necessary for a functional financial system. As these elements continue to evolve and integrate, they form an increasingly cohesive platform for financial applications spanning both traditional and decentralized finance.

3. Building an Integrated Stack For Onchain Finance

As traditional and decentralized finance continue to exist in separate spheres, Mantle is building a comprehensive financial stack that spans both worlds. The vision is ambitious yet straightforward: create a single interface where users can manage their entire financial lives without needing to understand the complex technology underneath. This "Banking Chain" strategy represents a fundamental shift in how blockchain technology is packaged and presented to mainstream users.

3.1 Mantle Index Four (MI4): S&P 500 of Crypto

For many investors interested in gaining exposure to cryptocurrencies, there are numerous challenges: which tokens to pick, how to manage custody, and how to navigate the technical complexities of wallets and exchanges. Mantle Index Four (MI4) addresses these concerns by providing a simple yet powerful solution.

MI4 is a tokenized index fund that gives investors diversified exposure to the crypto market's major assets. In partnership with Securitize, which is known for their participation of tokenization of BlackRock's BUIDL fund, MI4 provides a professionally managed portfolio with institutional-grade security and compliance standards.

MI4's composition is designed to be uncontroversial and represents major sectors of the crypto market:

• BTC: 50% (Bitcoin, the original cryptocurrency)

• ETH: 26.5% (Ethereum, leading smart contract platform)

• SOL: 8.5% (Solana, a high-performance blockchain)

• Stablecoins: 15% (Dollar-pegged assets for stability)

What sets MI4 apart from traditional crypto ETFs is its yield-generating capability. While many traditional finance products like BlackRock's Bitcoin ETF provide exposure but no yield, MI4 stakes the assets where possible to generate additional returns. The fund utilizes yield-bearing versions of these assets, including mETH for Ethereum, bbSOL for Solana, and sUSDe for stablecoins.

For institutional investors coming from traditional finance, the yield from MI4 represent substantial value that they actively seek rather than leave on the table. The fund launches with a $400 million commitment from the Mantle Treasury, demonstrating a strong confidence in the initiative.

For investors, MI4 offers two paths to participation:

1. Traditional finance onramp through standard subscription channels

2. Tokenized version that can be purchased onchain through Securitize

The tokenized version adds another layer of utility as the tokens themselves can be used as collateral in DeFi protocols, creating an asset that moves freely between traditional and decentralized finance.

MI4 is expected to appeal particularly to family offices and investors who are interested in crypto exposure without getting deeply involved in technical aspects. These investors seek quality assets with yield components in a simple package.

By packaging the crypto market's major assets into a familiar index fund structure while adding yield components, MI4 creates a compelling bridge between traditional asset management and DeFi innovation. This approach addresses both the access challenges for newcomers and the yield opportunities sought by sophisticated investors.

3.2 Mantle Banking: One App for All Your Financial Needs

Source: Letter to Token Holders Q2 2025

While MI4 aims to simplify crypto investing, Mantle Banking takes a more comprehensive approach by reimagining the entire banking experience. Today's financial landscape forces users to manage their finances across disconnected systems – traditional bank accounts for fiat and separate crypto wallets for digital assets. Mantle Banking eliminates this fragmentation with an all-in-one solution.

Mantle Banking is designed as a crypto neobank that helps users spend, save, and invest across both fiat and crypto finances from a single account. The goal is to create a user experience as familiar and intuitive as popular fintech apps like Revolut, but with DeFi capabilities working behind the scenes. While maintaining the self-custody philosophy of crypto, it removes technical barriers that typically make crypto intimidating for mainstream users.

The platform leverages Mantle Network as its foundational infrastructure, enabling a unified experience where users can maintain bank accounts that settle onchain, access multicurrency cards for daily spending, and manage both on/off-ramps for major currencies through a single interface.

Key features of Mantle Banking include:

• Seamless Onboarding: Unlike traditional crypto experiences that require seed phrases and complex wallet setup, Mantle Banking offers a streamlined onboarding process where users can get a bank account and multicurrency debit card in just a few steps.

• Fiat-Crypto Integration: Seamless conversion between traditional currencies and crypto assets, with initial support for Euro and USD. This allows users to deposit their salary directly into their account and either spend through virtual cards or allocated to yield-generating opportunities.

• Global Spending: Each account comes with virtual cards that work anywhere traditional payment cards are accepted. This means users can spend their crypto-backed funds for everyday purchases across multiple currencies with competitive exchange rates.

• Yield Generation: Based on user preferences, funds can be automatically allocated to yield-generating protocols. For example, a portion of incoming salary could be directed to mETH protocol for yields, or to MI4 for broader market exposure.

• Credit and Borrowing: Mantle also plans to support users to access credit by using their crypto assets (mETH, fBTC, or MI4) as collateral. This creates a powerful financial tool where yield income can potentially pay down credit lines or be used as cashback.

Mantle Banking represents a fundamental shift from the current fragmented experience where users must actively manage transfers between TradFi and DeFi systems. The banking interface serves as an abstraction layer that hides the complexity of blockchain technology while delivering its benefits.

By creating this unified interface between traditional and decentralized finance, Mantle Banking aims to make crypto accessible for everyday use while maintaining the financial sovereignty and yield opportunities that make DeFi valuable.

3.3 MantleX: Harnessing AI to Revolutionize User Experience

The last component of Mantle's financial stack is MantleX, which focuses on integrating AI to enhance user experience across the ecosystem. As AI adoption accelerates, transaction patterns will increasingly be determined by AI systems that will naturally gravitate toward chains offering the most seamless liquidity, easiest use, and lowest fees.

MantleX is positioning itself to capitalize on this AI-driven future in three key areas:

• Enhanced Content Creation and Education: AI can dramatically improve how users learn about and engage with crypto products. MantleX is developing tools that generate educational content and marketing materials, making complex concepts more accessible. These tools will first be used internally for Mantle's own marketing and community engagement before being offered more broadly.

• Simplified DeFi User Experience: One of the biggest barriers to DeFi adoption is complexity of interface. MantleX has observed that many DeFi actions, like selecting yield options or managing farms, require excessive clicking and decision-making.

• Future Narrative Exploration: Mantle is also positioning itself to capitalize on emerging AI-crypto intersections by collaborating with promising teams in the AI space. This ensures Mantle will be prepared as new AI-related narratives and use cases emerge in the blockchain sector

Integration of AI into Mantle's stack serves a crucial purpose: abstracting away the complexities of DeFi to deliver simple benefits and experiences to users. Rather than requiring users to understand complex protocols or navigate multiple interfaces, AI can serve as an intermediary, which translates user intent into optimal onchain actions.

3.4 Integrated Stack of Onchain Finance: How It All Works Together

What makes Mantle's approach particularly powerful is how these components work together as an integrated financial stack. Rather than being isolated products, each element enhances the others, creating a seamless ecosystem that spans from infrastructure to user-facing applications.

The foundation is Mantle Network, functioning as secure, high-performance ledger system with its optimal blend of EigenDA for data availability and Succinct's ZK proofs for security and performance.

Asset layer comes next, with products like mETH and fBTC providing liquid, yield-bearing assets that can move efficiently throughout the ecosystem. These asset protocols create essential liquidity needed for a functional financial system.

Above this sits an application layer with Mantle Banking and MI4, providing intuitive interfaces for users to interact with the ecosystem. These applications abstract away the complexities while delivering the benefits of both traditional and decentralized finance.

Tying everything together is MantleX's AI capabilities, which enhance user experience across all touchpoints and enable increasingly sophisticated automated financial strategies.

This integration creates a powerful flywheel effect – each component strengthens the others, with users benefiting from the combined capabilities. For example, a user interacting with Mantle Banking can seamlessly access yield opportunities from mETH Protocol, use fBTC as collateral, and invest in MI4 – all while the underlying transactions execute efficiently on Mantle Network. The user experiences one cohesive system rather than disconnected protocols.

Consequently, Mantle is building a complete operating system for onchain finance. Through this system, blockchain becomes the core foundation of everyday financial activities without users even realizing it, functioning as powerful infrastructure.

4. Conclusion

Mantle's integrated approach to onchain finance represents a significant step toward bridging the divide between traditional and decentralized financial systems. By creating a comprehensive stack that spans from network infrastructure through assets to user-facing applications, Mantle addresses the fragmentation that has long limited mainstream crypto adoption. The combination of Mantle Network's technical advancements, MI4's simplified investment approach, Mantle Banking's unified interface, and MantleX's AI integration offers a coherent vision for making blockchain technology accessible without sacrificing its core benefits.

As traditional finance increasingly moves toward tokenization and digital assets, Mantle's positioning as the "Banking Chain" offers an intriguing model for what mainstream financial services might look like in a blockchain-enabled future. Upcoming quarters will reveal whether this comprehensive approach can successfully attract broader audience necessary to fulfill Mantle's vision of making crypto truly accessible for everyday financial activities.