Understanding Manta Network: A Comprehensive Overview

Key Insights

• Manta Network is an ecosystem of networks offering scalable execution environments for  ZK applications. Manta Network consists of two distinct networks: Manta Pacific and Manta Atlantic. Both networks offer ZK tooling simplifying ZK application deployment.
• Manta Pacific provides an EVM-native execution environment for ZK applications. The modular L2 leverages Celestia for data availability, offering cheaper transactions. It also uniquely offers native yield for ETH and stablecoins (USDC).
• Since launching the New Paradigm bridge in December 2023, users have bridged over $750 million worth of assets to Manta Pacific via the bridge, amassing over $1.5 billion in TVL.
• Manta Atlantic is a developing ZK-enabled Layer-1 on Polkadot that aims to provide a composable execution environment for ZK applications through zk-enabled SoulBound tokens (zkSBTs).

Zero-knowledge (ZK) applications promise an improved user experience with a strong focus on safety and security at scale. However, ZK applications rely on zero-knowledge proofs (ZKPs) for cryptographic verification, making them computationally intensive. As such, they require platforms that can efficiently scale their operations, enabling diverse uses without compromising performance.

Manta Network provides a flexible execution environment that natively accommodates diverse computational needs for ZK applications. Manta Network’s focus on cost efficiency and improved throughput for ZK applications has also made it a popular choice among other decentralized applications (dApps). Since launching in September 2023, Manta Network’s Layer-2 (L2) network Manta Pacific has onboarded over 150 dApps, including nearly 15 native ZK applications. With the introduction of the New Paradigm bridge in December 2023, the L2 implemented native yield generation for ETH and supported stablecoins. Barely two months into the launch, users have bridged over $750 million in assets to the L2.

Background

Victor Ji and Kenny Li founded Manta Network in 2020 with the goal of improving onchain privacy. The founding team, operating under p0x Labs, began their development journey with a Web3 Foundation grant in the same year. Since then, Manta Network has evolved into a generalized ZK ecosystem, offering an L2 network for deploying and scaling ZK-enabled dApps.

By September 2021, Manta had secured a parachain slot on Kusama for Calamari, its ZK-enabled Canary network. March 2023 marked the introduction of Manta Network's zksBT, a new asset class that facilitates secure onchain verification. Leveraging its tooling infrastructure, Manta Network also released the  Manta NPO, a platform for minting zkSBTs, and a wallet extension for storing these assets.

In September 2023, Manta Network launched Manta Pacific, a ZK-enabled L2 that offers native composability to ZK applications within the Ethereum ecosystem. As of writing, Manta Network also secured a self-funded parachain slot for its ZK-based Layer-1 (L1) network Manta Atlantic on Polkadot.

In December 2023, Manta Pacific launched the New Paradigm bridge, introducing new ways for users to earn additional yield on native yield-bearing ETH and stablecoins.

In total, Manta Network has raised over $60 million from a pre-seed, seed, community, and Series A round. The Series A round was held at a $500 million valuation. Notable investors across these rounds include Polychain Capital, Qiming Ventures, CoinFund, ParaFi Capital, Hypersphere Ventures, DeFiance Capital, and Multicoin Capital. Although the amount raised was undisclosed, Manta Network has also received a strategic investment from Binance Labs.

Technology

Manta Network’s ecosystem consists of Manta Pacific, a modular L2 for Ethereum, and Manta Atlantic, a ZK-based L1 chain on Polkadot.  On each network, Manta Network offers a novel ZK-enabled tooling infrastructure made up of Universal Circuits, zkSBTs, and Manta NPO.

Source: Manta Network Documentation

Networks

Manta Pacific

Manta Pacific, the modular L2 network, provides a scalable and cost-efficient environment for EVM-native dApps including ZK applications. As of writing, Manta Pacific operates as an optimistic rollup using Caldera's OP Stack Rollup, focusing on cost-efficient scaling. To reduce operational costs further, Manta Pacific transitioned in December 2023 from using Ethereum for data availability (DA) to adopting Celestia's specialized DA solution. This transition substantially reduced the L2 network transaction fees, saving over $1.4 million in gas fees.

Source: Manta Tokenomics

zkEVMs best suit ZK applications because they combine the familiarity of EVM development with a system that already supports opcode-level conversions to zk circuits. Manta Pacific plans to transition to a zkEVM validium to enhance its network performance. Validiums are Ethereum scaling solutions that employ validity proofs in verifying transactions while using a separate DA other than Ethereum to store transaction data. As a zkEVM validium, Manta Pacific will utilize Polygon CDK for execution while retaining Celestia for DA. This approach aims to boost the network’s throughput for deploying ZK applications, including applications with high-transaction volume like Web3 gaming and social applications.

On Manta Pacific, users could bridge yield-bearing ETH and supported stablecoins (USDC) via the dedicated New Paradigm bridge to the L2. In addition to earning native yield on these assets, users can leverage these assets on supported decentralized applications on the L2 to earn additional yield. This move addresses a significant limitation with L2 networks. Conventionally, assets like ETH and stablecoins like USDC do not accrue any yield on L2s, but ETH deposited on the L1 generates an annual yield of 4% for users.

Through its collaboration with StakeStone and Mountain Protocol, Manta Pacific offered its users a liquid staking token (STONE) and yield-bearing stablecoin (wUSDM), respectively. These integrations allowed users to deposit ETH and USDC on Manta Pacific, receiving STONE and wUSDMw, which are immediately liquid and usable across the network's DeFi applications.

As of writing, deposits via the bridge have been discontinued. However, users who have already bridged ETH and USDC to the network can utilize liquid versions of these assets across supported DeFi applications on Manta Pacific for additional yield.

Manta Atlantic

Manta Atlantic, a ZK-based L1 chain, launched in January 2024. Manta Atlantic provides a composable execution environment for ZK applications and natively hosts Manta Network’s ZK tooling infrastructure. Built on the Substrate framework, it functions as a parachain within the Polkadot ecosystem, focusing on interoperable identity verification and ZK application deployment.

Calamari, Manta’s Pre-Test Environment

Calamari, Manta Atlantic's canary network, functions as a parachain on Kusama, facilitating interoperable ZK application deployment within the Kusama ecosystem. It secured its parachain slot through a KSM crowd loan, allocating 30% (30 billion KMA) of its total KMA token supply to over 16,000 contributors. Calamari provides a pre-testing environment for ZK-enabled applications and tooling infrastructure developed by Manta.

ZK Tooling

Universal Circuits

Manta Network's Universal Circuits simplify the development of ZK applications by addressing the complexity challenges in developing these applications. Traditionally, developers faced a steep learning curve to create ZK applications. They would need to deeply understand advanced cryptographic techniques, manually build complex ZK circuits, and learn new programming languages like Circom.

Universal Circuits tackle these challenges by offering a library of pre-built ZK circuits that developers can easily integrate into existing applications, especially those built using Solidity for Ethereum. This approach streamlines the development process, allowing developers to add ZK functionalities to their applications with minimal coding and without needing in-depth cryptographic knowledge.

The ZK library consists of the following directories:

• ZKP Circuits are written in the Circom programming language and used for proof generation.
• Solidity Smart Contracts for managing onchain verification for ZK-enabled decentralized applications (dApps).
• TypeScript SDK (Alpha) contains functions for simplifying key management.
  

Universal Circuits make developing secure and efficient ZK applications more accessible to a broader range of developers. The product also unlocks ZK-enabled onchain asset verification solutions like POMP and ZK-powered onchain games like Zypher Games. The ZK library provides gaming contracts like zkShuffle, allowing developers to create trust-minimized onchain games like zkHoldem.

zkSBTs and Manta NPO

ZK-enabled SoulBound Tokens (zkSBTs) are onchain non-transferable NFTs tied to individual user identities. zkSBTs leverage ZKPs for user safety and security. These assets are well-suited for onchain gaming items, identity, and asset verification purposes. Additionally, developers can seamlessly integrate these assets into ZK applications without requiring expertise in cryptography or ZKP.

Manta NPO is a decentralized launchpad platform for minting and verifying zkSBTs. By leveraging Manta Network's zkAddress tooling and Universal Circuits, the NPO platform provides a user-friendly, plug-and-play solution for deploying zkSBTs within ZK applications.

Notably, the NPO launchpad witnessed the minting of over 1.1 million zkSBTs at the time of writing. However, most of these mints occurred in Q2'23 and Q3'23, with a significant decrease in minting activity observed in Q4'23

Tokenomics

Manta Atlantic’s native token, MANTA, is used for staking, transaction fees, and governance. Unlike Manta Atlantic, Manta Pacific uses ETH for gas fees. As of writing, tokenholders can bridge MANTA across four networks including Manta Atlantic, Manta Pacific, Polkadot, and Moonbeam. On Jan. 18, 2024, at the token generation event (TGE) an initial total supply of 1 billion MANTA was issued. Although, MANTA will inflate at 2% annually.

MANTA’s initial total supply of 1 billion is allocated as follows:

• Ecosystem: The most significant portion of the initial total supply (21.19%), is dedicated to Ecosystem development. At TGE, 23.5% of this allocation was made available, with the remaining portion vesting monthly over a two-year period.  
• Foundation: 13.5% of the initial total supply is reserved for the Manta Foundation. Starting from January 2024, this allocation will unlock linearly over six years.
• Airdrop:  New Paradigm bridge users were allocated 6.5% of the initial total supply. Of this allocation, 50 million was unlocked at TGE while the remaining portion will be released three months post-TGE. Early ecosystem participants were also allocated 5.6% of the initial total supply which will be fully available at TGE. As of writing, there are ongoing claims for this airdrop.
• Public Sale and Launchpool: Public Sale participants were allocated 8% of the initial total supply. At TGE, 40% of this allocation was made available to participants, while the remaining is linearly unlocked over a 6-month vesting period. Additionally, a Binance launchpool for MANTA was seeded with 3% of the initial total supply at TGE.
• Private Investors:  The Private Round, Strategic Sale, and Institutional allocations, comprising 12.94%, 6.17%, and 5.00% of the initial total supply, respectively, are each subject to a one-year lockup followed by a 3-year linear vesting period.
• Team and Advisors: The project team, operating under p0x Labs received 10% of the initial total supply subject to an 18-month lockup followed by a four-year vesting period. Advisors were allocated 8.1% of the initial total supply. Of this, 30% was unlocked at TGE, while the remaining 70% is subject to a 2-year linear vesting period.

Ongoing Inflation and Transaction Fees

MANTA’s annual 2% inflation entirely accrues to Manta Atlantic block producers. Only the top 63 registered Collators by total stake can participate as block producers. To qualify as Collators, users must post a minimum of 400,000 MANTA as bonds and meet the network's hardware requirements. Token holders may also participate by delegating stake (in MANTA) to Collators for a share of block rewards.

The network’s transaction fees are distributed as follows:

• 10% goes to block producers
• 18% accrues to Manta Network's community treasury to bootstrap network development
• 72% is reserved as incentives to be distributed to projects within the Manta ecosystem.
  

Governance

Manta Network's governance will evolve through two phases. In the first phase (Manta Governance 1.0) which is live as of writing, Manta Network established a community forum for stakeholders to propose and discuss project-related matters. However, the ultimate decision-making and execution of proposals rests with the Manta Foundation.

Subsequently, in the second phase (Manta Governance 2.0), the network will transition to a "Five Council" governance model:

• Legislative Council: This council, composed of MANTA tokenholders, plays a pivotal role in shaping the network's future. They actively make decisions regarding the network's direction, vision, tokenomics, and intended use.
• Executive Council: Managed by the Manta Foundation, the Executive Council translates decisions made by the Legislative Council into actionable steps. They oversee network operations, educational initiatives, and research and development projects.
• Judicial Council: Responsible for overseeing grant distribution and implementing governance tools, the Judicial Council ensures that network resources are allocated fairly, adhering to a democratic process.
• Examination Council: This council manages the election process for Manta Foundation members, ensuring that the selection process is democratic and those in positions of authority are held accountable.
• Control Council: Serving as the audit branch, the Control Council oversees the entire governance process, guaranteeing transparency, fairness, and the integrity of the network.

As of writing, the project team has yet to disclose when Manta Governance 2.0 will begin.

Network Activity

Since its mainnet launch in September 2023, Manta Pacific has processed over 10 million transactions. Despite being a relatively new L2, it has attracted over $1.5 billion in TVL, securing the top three position among L2s by TVL at the time of writing. This surge was largely driven by the New Paradigm bridge launch in December 2023. The launch reportedly attracted over 200,000 new users on Manta Pacific participants, accounting for over 70% of the network’s TVL.  

In terms of dApp activity, the over 2.5 million dApp transactions on Manta Pacific over the past three months came from:

• DeFi – 1 million (39.8%) transactions from DeFi dApps like the ApertureSwap DEX, the PacificSwap AMM, LayerBank money market protocol, and the QuickSwap DEX. As of writing, LayerBank leads this category, accounting for over 25% of Manta Pacific’s $1.5 billion TVL.
• Bridges – 651,000 (26.%) transactions from Bridges like Orbiter, dappOS,, Rhinofi, and Owlto. As of writing, Manta Pacific has seen over $900 million in total value bridged, and the L2’s official bridge has seen over 40,000 unique users.
• GameFi – 603,000 (24.1%) transactions from GameFi dApps like the Element NFT marketplace, the zkHoldem game, and the Gabby World virtual world.
• Social – 363,000 (13.6%) transactions from social dApps like the DMail Network notification service and the POMP onchain asset verifier.

A comprehensive overview of Manta Pacific’s dApp activity can be found here.

Ecosystem

At launch in September 2023, Manta Pacific announced MantaFest, a 5-week promotional campaign to bootstrap network activity. This event allowed users to engage with various newly integrated dApps in Bridging, DeFi, SocialFi, and GameFi. Participants in MantaFest could earn points, which were redeemable for MANTA rewards at TGE.

In October 2023, a month after Manta Pacific’s mainnet alpha launch, Manta Network introduced the Uncharted Grants program. This initiative aimed to bootstrap early adoption and participation in Manta Pacific by rewarding ecosystem projects building on Manta Pacific. It allocated 5 million MANTA tokens to top-ranking ecosystem projects across various categories, including Bridging, Social, GameFi, and DeFi. It also set aside 1.5 million MANTA (30% of the grant allocation) for MantaFest participants.

Source: Manta Network Medium Post

DeFi

In the DeFi category, top-ranking ecosystem projects were allocated 30% of the grant (1.5 million MANTA). As of writing, the leading projects on Manta Pacific are lending protocols (LayerBank and Shoebill V2), accounting for 42.2% and 10.5% of the network’s TVL, respectively. This surge in TVL is mainly due to the New Paradigm event boosting ETH and stablecoin liquidity on the network. Decentralized Exchanges (DEXs) like Quickswap and ApertureSwap are the next prominent DeFi category, though they collectively account for less than 5% of the network’s TVL.

Bridges

Since launching Manta Pacific's mainnet, several bridge protocols have initiated bridge support for Manta Pacific, including LayerZero, dappOS, Orbiter, Rhinofi, and Owlto. These integrations have significantly improved the network's interoperability, enabling more efficient cross-chain liquidity and enhancing the user experience for decentralized applications on the L2.

Similar to the trend observed in the DeFi sector, the New Paradigm bridge launch event in December 2023 played a pivotal role in increasing cross-chain transfers on Manta Pacific. As of writing, the Manta Pacific bridge has facilitated deposits exceeding 280,000 ETH (worth roughly $700 million) and $132 million in USDC since the event. 

GameFi and Social

Manta Pacific is positioning itself to attract performance-intensive dApps including those in the GameFi and Social sectors.  As of writing, the leading GameFi platforms, including Element NFT marketplace, Gabby World, and zkHoldem, have collectively attracted an average of 50,000 unique users monthly. In the Social sector, the DMail Network notification service and the POMP onchain asset verifier have seen over 30,000 unique active addresses in the same period.

ZK Applications

Some ecosystem projects leverage Manta Network's tools and infrastructure to build ZK-enabled applications. Notable projects include:

• Proof of My Possessions (POMP) - This platform enables confidential verification of onchain activities, identities, and assets like cryptocurrencies, NFTs, and SBTs. Operational on Calamari and Manta Pacific, POMP ensures trustless verification without disclosing sensitive information, such as user wallet addresses.
• zkHoldem - A decentralized online gaming platform available on Calamari and Manta Pacific. It uses Manta Network's zkShuffle contracts to facilitate peer-to-peer virtual poker games.
• AsMatch - Positioned as a SocialFi application on Calamari and Manta Pacific, AsMatch connects users for various purposes, including dating, social networking, and professional networking. It integrates AI-generated content, Zero-Knowledge Proofs (ZKPs), and zkSBTs to offer a unique match-to-earn model with token-based incentives.
• Aperture - An automated liquidity management tool available on Manta Pacific, designed to optimize liquidity operations.
• Zypher Games - A gaming platform on Calamari powered by Manta's ZKP tooling infrastructure and AI that provides scalable gaming infrastructure for launching onchain games.

Notably, zkHoldem and POMP are among the top three projects by dApp activity in their respective sectors, GameFi and SocialFi. This trend could suggest the emergence of new classes of onchain applications that utilize Zero-Knowledge (ZK) technology.

Onchain Identity Verification

To date, institutional users and blockchain ecosystems such as Binance, Galxe, Linea, Cyberconnect, and ReadON have issued zkCredentials via Manta’s NPO platform for secure and confidential onchain asset and identity verification. Manta has also integrated its onchain verification tooling with other networks such as Arbitrum, enabling secure onchain identity verification.

Competitive Landscape

Manta Pacific is notable for being the first modular L2 to integrate Celestia for data availability and the first L2 to support native yield for ETH and stablecoins (USDC).

Cost efficiency is an essential factor considered by developers when choosing a network for application deployment. Manta’s move to integrate Celestia for data availability offers lower transaction fees than monolithic L2s, potentially making it a considerable choice for developers. However, it could face stiff competition from other L2s moving to adopt specialized DA solutions. For instance, Celo is transitioning into an L2 using Eigenlayer’s DA, and L2s like Starknet and zkSync are building hybrid DA solutions.

As of January 2024, Manta Pacific uniquely offers composable liquidity for native yield-bearing assets. However, this position is challenged by the upcoming launch of Blast in February 2024, which has already amassed over $1 billion in TVL. While Blast's future offerings beyond base yield are uncertain, Manta Pacific currently provides multiple yield opportunities for these assets across more than 100 applications on its network. The competition dynamics between Manta Pacific and Blast will be interesting to observe post-Blast's launch.

Looking ahead, Manta Pacific plans to transition to a zkEVM validium with Polygon CDK. While not the first in this space, it aims to distinguish itself from competitors like ImmutableX with its Universal Circuits.

Roadmap

Manta Pacific is transitioning from an OP Stack rollup to a zkEVM Validium using the Polygon CDK. This transition extends the network’s ability to offer an EVM native execution environment for ZK applications while improving the network’s finality.

Source: Manta Documentation

The transition will occur in four phases:

• Phase One (Manta Pacific Alpha) - In this phase, Manta Pacific is an optimistic rollup that employs Ethereum for data availability.
• Phase Two (Manta Pacific Alpha II and Celestia DA) - In this phase, Manta adopts Celestia for data availability.
• Phase Three (Manta Pacific Beta and Transition to zkEVM) - In this phase, Manta transitions from an OP Stack rollup to a zkEVM rollup. The network may leverage a multi-prover framework that would combine both proofs before a full transition to Polygon’s ZK prover.
• Phase Four (Manta Pacific Mainnet Production I (+Universal Circuits 2.0) - Universal Circuits will feature an upgrade introducing ZK-proof aggregation. This will further reduce gas costs, improve user experience, and support more zk-enabled use cases.

As of writing, Manta Pacific has completed the second phase of its transition, operating as an OP Stack rollup leveraging Celestia for data availability. The full transition to a zkEVM validium remains a core priority for the team in 2024.

By the end of January 2024, Manta Pacific plans to conclude the New Paradigm bridge launch event, enabling withdrawals of native yield-bearing deposits on the L2.

Conclusion

Manta Network distinguishes itself in the L2 and ZK development space by offering a scalable and flexible environment tailored for ZK applications. Since launching in September 2023, Manta Network’s L2, Manta Pacific has onboarded over 150 dApps, including nearly 15 native ZK applications. With the introduction of the New Paradigm bridge in December 2023, the L2 implemented native yield generation for ETH and stablecoins. Barely two months since launch, users have bridged over $750 million worth of assets to the L2.

Manta Pacific's future strategy includes transitioning to a zkEVM Validium using Polygon CDK to enhance network throughput and finality, catering to a wider range of ZK applications. It also plans on expanding its tooling infrastructure such as Universal Circuits, which simplifies the development of ZK applications. Doing so could position it as a desirable choice for creating efficient and secure ZK applications, particularly in high-transaction sectors like Web3 gaming and social applications. To experience long-term growth and success in the competitive ZK and L2 space, Manta will need to foster continuous user engagement through initiatives like New Paradigm and MantaFest.

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