This Manta Network 2022 review gives a taste of the blockchain privacy ecosystem as a whole. So what is Manta Network, and why is it generating significant hype surrounding itself? Here is a detailed assessment of the blockchain privacy solution.
How Manta Network pushes the blockchain privacy envelope
Manta is the privacy layer for Polkadot. It uses zk-SNARK cryptography to ensure complete anonymity, retention of high throughput, and accessible communication between different blockchains or interoperability based on the Substrate framework. Because the network supports Polkadot, it also integrates with Polkadot’s parachain’s mainstream cryptocurrencies and stable coins. To be noted, Zk-SNARK is an acronym for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.” It is a cryptographic method that allows one party to prove it has specific information without revealing it.
As a solution layer, Manta Network directly addresses the need for blockchain privacy, scalability, ease of use, and Liquidity in DeFi services. Manta’s suite of products mainly includes a fully decentralized blockchain privacy payment and token exchange protocol.
Manta Network blockchain privacy products available in the Polkadot ecosystem
- MantaPay, the decentralized anonymous payment (DAP) protocol: It is an on-chain private protocol based on the zk-SNARK cryptography technique that enables users to swap Polkadot and its Parachain tokens with corresponding private tokens, pay with privacy tokens, and redeem base coins from private tokens.
- MantaSwap, the decentralized anonymous exchange (DAX) protocol: MantaSwap is based on AMM and zk-SNARK cryptography method where users can anonymously trade private versions of tokens between each other. The price formation tecnique of the decentralized private token exchange protocol is in line with the mainstream AMM.
- Besides the existing products, the platform is also developing a decentralized blockchain privacy lending and synthetic assets protocol expected to launch shortly.
The platform’s revenue model: As posted in Manta’s whitepaper, Manta’s revenue model is based on rebate and redemption. Firstly, a network fee is charged, then pooled, and can be claimed by Manta token holders; the MANTA protocol charges minting fees (0.1%), privacy-to-base token redemption (0.1%), and exchange fees for private assets using MANTA Swap (0.3% – variable).
Founded by crypto veterans, researchers, and scholars, Manta Network allows minting private tokens with stable coins and other base tokens at a 1:1 ratio.
Why is Manta driving attention from Polkadot and blockchain privacy enthusiasts?
In recent days, Manta Network has steered significant hype surrounding itself, which can be understood as the network boasts the top 6 most contributors among other Polkadot Parachain auction participants. Furthermore, the world is transitioning from Web 2.0, which involves numerous intermediaries and centralized services, to Web 3.0, wholly based on pillars of decentralization. In such a situation, security and blockchain privacy have become significant concerns for users. Manta solves two key issues that its competitors have been unable to accomplish: privacy and scalability.
Manta conducted a survey that found ‘73% of respondents hesitated or avoided a transaction at some point because they were concerned about privacy implications. In addition, 84% revealed that they are concerned about their wallet address being linked to their real identity.’ To be noted by the Manta Network 2022 review, any token transfer that users conduct on a decentralized exchange (let’s assume Uniswap) is transparent and visible to the general public, though not many users like to reveal their transactions and transfer histories to the general public.
Therefore, the network is striving to remedy these ‘blockchain privacy issues’ from existing decentralized exchanges by providing complete anonymity and security of identity through its decentralized private token exchange protocol — Mantaswap. The exchange realizes decentralized transactions between private coins (similar to Uniswap and Curve) and ensures complete recipient-sender address privacy. In this way, users can use popular assets like stable coins, renBTC, etc., while simultaneously benefiting from the anonymity of privacy coins.
Manta is the only private DeFi product that uses zk-SNARK cryptography instead of hardware to provide security and integration with mainstream assets, like stablecoins. In contrast, Manta’s competitors cannot provide any of these services. All this has steered the project to gain popularity among enthusiasts and institutions. Besides a promising concept, the platform also offers significant rewards to crowd loan participants.
Manta Network crowd loan strategy and outlook
Parachains can engage with Polkadot’s ecosystem by leasing a slot on the Relay Chain for up to two years at a time. Then, the slot is allocated through an on-chain auction, where naturally, the highest bidder wins. To be noted, Parachain teams either bid with their DOT tokens or source $DOT tokens through the community using the crowd loan functionality.
Once a user invests his money, there is a high expectation of results. Here is how users can benefit from participating in Manta Network’s crowd loan event. Stakeholders will receive their rewards or tokens immediately (note that situations may vary from project to project). If a project does not win one auction round, $DOT tokens will still be locked for the next round of auction; however, if the project fails to win a slot, the funds will be returned to their respective holders.
Overview: Manta’s total token supply is 1 billion, out of which the network has allocated 15.6%, i.e. 156 million tokens only for crowd loan rewards. Here is how crowd loan rewards are allocated to participants.
- 12% (120 million) of tokens are base rewards, earned by simply contributing DOT
- 3% (30 million) of tokens are earned exclusively by crowd loaners through participating in the MantaPay liquidity event, once MantaPay launches
- 0.6% (6 million) of tokens are exclusively reserved for Binance early-bird contributors)
Early Bird Rewards: The earlier users participate, the better their rewards. Early bird rewards are divided into two stages: the first stage, i.e., contributors who participate in the pledge before the auction of the first Polkadot parachain starts, can get an additional 10% MANTA. The second stage is where participants stake $DOT during the auctions and get an extra 5% MANTA.
NFT Rewards: Manta Network contributors who contribute using a decentralized contribution channel (e.g., Polkadot JS) will receive a special NFT celebrating their support for the first parachain auction.
Referral Rewards: Users can get their referral code from the Manta Network Crowd Loan Website. Each referral rewards 5% extra MANTA. That 5% is split between the referrer (2.5%) and the referred (2.5%).
An outlook on Manta’s partnerships and funding ahead of Parachain Auctions
As Manta is the only on-chain privacy solution for all crypto assets within the Polkadot ecosystem, it is irreplaceable for users who wish to personalize their Polkadot-based activities and transactions. While Manta has garnered significant attention from users due to its blockchain privacy features, it has also bagged significant funding and strategic alliances. As posted by the network, Manta intends to provide security to the crypto market; therefore, strategic partnerships are essential for the platform.
In October 2021, Manta closed a $5.5-million funding from more than 30 venture funds. The funding was led by CoinFund and ParaFi capital, with significant Web 3 investment funds like LongHash Ventures, MS Holdings, Divergence, and others. The funding has also featured some of the industry’s prominent individual investors from major cryptocurrency companies such as Digital Currency Group, Consensys, and Bitcoin.com, and some individual investors as well.
Earlier in February this year, Manta Network completed a $1.1 million funding round led by Polychain Capital and joined by significant industry firms such as Alameda Research and DeFiance Capital.
Manta Network 2022 Review on Decentralized Finance (Defi) sector’s explosive growth and emerging problems
According to a report from Research and Markets, the global blockchain technology market size, which is currently at $5.88 billion, could reach $395 billion by 2028 if it continues to expand at a CAGR of 82.4% from 2021 to 2028. While the growth can be attributed to the increased global cryptocurrency adoption, +880% YoY, the increasing interest of financial institutions in blockchain technology has also fueled the market’s growth at the same time.
Besides this, the nascent segment of blockchain, defi, has also posted growth like never before. Last year, the total value locked (TVL) in DeFi was a mere 5% of its current worth, $255 billion. The change means an explosive growth of 1686%. Witnessing the crazy mania, analysts claim that the decentralized finance (defi) sector may also disrupt the existing traditional financial system and establish a new age of decentralized finance industry.
‘The explosive growth in defi is less impressive than it seems.’ The last few years witnessed billions of dollars of inflows into the DeFi ecosystem and increasing security infringements across prominent platforms. For example, in August 2021, an anonymous hacker stole approximately $600 million in cryptocurrency from Poly Network, a lesser-known decentralized finance platform. However, a few days after the heist, the hacker changed his mind and returned the stolen amount to the network.
In another defi hack, Compound Finance fell victim to a flaw and accidentally distributed $70 million – $85 million worth of $COMP tokens in excess to users. The platform encountered this token distribution bug on 30 September; however, it was too late. $65 million $COMP tokens were again placed in a vulnerable vault, resulting in a cumulative of nearly $150 million COMP tokens under risk. While the platform was able to remedy the entire situation, it highlighted the nascency of the decentralized finance (DeFi) sector and how vulnerable it can be at times.
Security episodes like these are regular within the crypto world, but the growing size of hacks is a significant concern. Only during 2021, defi space lost a total of $10.5 billion to scams, per an Elliptic report. At the time of writing, the defi total market cap stands at $130.18 billion, and $10.5 billion scams translate to 8 % of its total market cap.
Conclusion
While blockchain — the underlying technology of digital assets is undoubtedly one of the greatest inventions in history, its newer segments defi is still in nascency and is prone to various problems. For example, as discussed above, numerous privacy protocols like Zcash and Monero in the crypto market promise to provide complete anonymity and security but are not scalable.
However, Manta is emerging as a unified platform for users that safeguards their digital asset holdings and brings scalability to this nascent industry. Analyst dub Manta a next-generation blockchain privacy project as in the looming time of Web3.0, where everything is going to be decentralized, it will provide institutional-grade security, anonymity as well as scalability to users.
The above reasons can be attributed to Manta network’s increasing crowd loan contributors. To be noted, Manta Network is one of the many leading projects in the Polkadot ecosystem.