State of Mantle Q1 2025

Key Insights

• Mantle maintained a leading position among competing protocols in Q1 2025, with a focus on long-term infrastructure development. Despite a 36.6% QoQ decline in market cap to $2.7 billion, it outperformed ETH’s 45.99% drop during the same period.
• Usage metrics declined QoQ, with average daily active addresses falling 19.6% to 37,816 and daily transactions down 2.7% to 391,399. Despite this, ecosystem incentives sustained protocol activity, such as the Mantle Rewards Station, mETH Protocol’s Methamorphosis Season 3, the EcoGalaxy: Mantle Surge event, and a Kaito-launched “Yap” leaderboard.​
• The mETH Protocol and Function (FBTC), previously Ignition FBTC, remained foundational to Mantle’s DeFi architecture, ending Q1 with TVLs of $709.7 million and $1.2 billion, respectively, accounting for a significant share of Mantle Network’s TVL​.
• In line with broader macroeconomic trends, Mantle’s total treasury value in USD declined 10.3% QoQ, falling from $3.9 billion to $3.5 billion. MNT remained the dominant holding with 65.4% of the allocations.
• Mantle Network became the first Ethereum Layer-2 to fully integrate EigenDA, enhancing throughput to 15 MB/s, further decentralizing data availability, and securing the network with over 163,000 mETH (~$335 million) in restaked assets​.

Primer

Mantle is focused on building a sustainable hub for onchain finance by combining institutional-grade infrastructure with blockchain technology. At the heart of Mantle is its community-owned treasury, which actively funds innovative products and fosters the growth of ecosystem partners. Mantle drives financial utility and liquidity through core products like Mantle Network, mETH Protocol, Function, and MI4, enabling the development of solutions that enhance sustainable yield, deep liquidity, and composability across DeFi.

Mantle Network (MNT) is built using OP Stack Bedrock. The network has integrated EigenDA on mainnet and is slated to fully integrate Succinct's SP1 to further enhance user security. The EVM-compatible network employs an optimistic rollup mechanism to batch multiple transactions into a single transaction on the Ethereum mainnet (Layer-1). Mantle Network aims to offer lower gas fees, reduced latency, and higher throughput than Ethereum. The project’s ecosystem primarily consists of restaking, gaming, DeFi, and NFT-related protocols, which are anchored by its large community-owned treasury. Mantle’s treasury is a catalyst for asset partner growth, paving the way for protocols such as Ethena USDe, Ondo USDY, Agora AUSD, and EigenLayer restaking to provide enhanced yield options and liquidity solutions. Mantle Network aims to be the "liquidity chain" to drive capital efficiency in the onchain economy through modular architecture, data availability solutions, and zero-knowledge proofs. Mantle is building banking for the next generation by leveraging blockchain technology.

Mantle’s other core innovation pillars include:

• mETH Protocol: Mantle’s native, vertically integrated staking and restaking protocol. It combines user accessibility with scalability to offer opportunities for users to accrue Ethereum staking yields while enhancing capital efficiency.
• Function: Previously known as Ignition FBTC, Function (FBTC) is Mantle’s standard infrastructure to enhance Bitcoin’s capital efficiency, deep liquidity, and composability. FBTC is powered by core contributors Antalpha Prime, Mantle, and Galaxy Digital.
• Mantle Index Four (MI4): An institutional-grade fund that bridges decentralized and traditional finance, providing both crypto-native and traditional investors with access to crypto beta and risk-return profiles.

New offerings described within the report below include Mantle Banking and MantleX.

Website / X (Twitter) / Discord

Key Metrics

Financial Analysis

Market Cap and Price

In Q1 2025, the circulating market cap of MNT decreased 36.6% QoQ, from $4.2 billion to $2.7 billion. Similarly, the price of MNT decreased 36.6% QoQ, from $1.25 in Q4 2024 to $0.79 in Q1 2025. Mantle’s total revenue also declined from $539,676 to $376,229. In terms of MNT, total revenue fell from 646,811 to 382,893, a 40.8% QoQ decline.

Notably, the broader crypto market experienced a downturn in Q1 2025, with ETH’s market cap declining by 46.0%. Mantle’s circulating market cap, which fell 36.6% QoQ, slightly outperformed ETH.

Total Value Locked (TVL)

Mantle Network's TVL demonstrated significant growth during Q4 2024. Between Nov. 7, 2024, and Dec. 4, 2024, Mantle’s TVL increased from ~$1.69 billion to ~$2.16 billion, representing a ~27.81% QoQ increase. This growth reflects an expanding user base and heightened activity throughout the ecosystem, specifically within the network's DeFi sector through key products such as mETH Protocol and the cmETH token. mETH Protocol emerged as the fourth-largest Ethereum liquid staking token within its first year, reaching a peak TVL of ~$2.19 billion. Incubated by Mantle’s team, the protocol was deployed on Ethereum while remaining governed by Mantle. This governance model facilitated seamless integration with the broader Ethereum ecosystem, leveraging Mantle's governance structure.

As of March 31, 2025, Mantle Network’s DeFi ecosystem is led by a small group of protocols that comprise the majority of locked onchain value. Merchant Moe and AGNI Finance accounted for 51.5% of Mantle’s DeFi TVL, holding $84.4 million (34.7%) and $40.9 million (16.8%), respectively. Stargate Finance followed with $39.3 million (16.1%), while INIT Capital held $29.4 million (12.1%). Compound Finance captured a smaller share at $12.1 million (5.0%). The remaining protocols in the “Others” category, consisting primarily of Lendle, mEthLab, Omega, PumpBTC, and IntentX, contributed $37.4 million(15.3%).

Notably, Mantle’s mETH Protocol and Function (FBTC) continued to bolster the network’s ecosystem TVL during Q1 2025. As of March 31, 2025, mETH Protocol recorded a TVL of $709.7 million, reflecting its role as a liquid staking and restaking solution focused on Ethereum-native yield strategies. Function, Mantle’s BTC-based yield product, ended the quarter with a TVL of $1.2 billion, entirely backed by BTC. The protocol continues to gain traction as a high-liquidity, cross-chain Bitcoin instrument. While TVL figures represent slight drawdowns from prior highs, both protocols remained foundational to Mantle’s broader architecture, driving adoption and supporting the network’s transition towards onchain finance.

Network Analysis

Activity and Usage

In Q1 2025, Mantle Network’s average daily transaction count decreased by 2.7%, from 402,125 in Q4 2024 to 391,399 in Q1 2025. The protocol recorded an average of 37,816 daily active addresses, declining 19.6% QoQ from 47,014 in Q4 2024. The protocol also recorded an average of 7,877 daily new addresses in Q1 2025, a 9.3% QoQ decrease from the 8,685 average daily new addresses in Q4 2024. Additionally, Mantle Network’s average daily returning address count decreased by 21.9% QoQ, from approximately 38,300 to 29,900 in Q1 2025.

Key drivers of activity on the network in Q1 2025 included the Mantle Rewards Station, the launch of Methamorphosis Season 3, a collaboration between Bybit for the EcoGalaxy: the Mantle Surge event powered by Layer3, and Mantle’s Yapper Leaderboard launched by Kaito.

Mantle Rewards Station

The Mantle Rewards Station, a foundational initiative by Mantle Network, continued to incentivize user participation in Q1 by enabling MNT tokenholders to lock tokens and earn rewards from ecosystem partners. The Rewards Station offered token-locking mechanisms, allowing users to earn rewards such as Ethena’s ENA, EigenLayer’s EIGEN, UXLink’s UXLINK, and WOOFi’s WOO through structured campaigns:

• The reward pool for Ethena’s ENA token went live on Jan. 23, 2025.
• Eigenlayer’s EIGEN reward pool went live on Jan. 23, 2025.
• On Jan. 24, 2025, users who staked MNT and allocated Mantle Power (MP) rewards towards completing UXLink’s staking requirements were able to claim UXLINK token rewards.
• On March 17, 2025, Mantle established a reward pool for WOOFi’s WOO token, offering a total of 800,000 WOO for users who locked MNT and allocated MP towards WOOFi’s staking requirements.
• The addition of Demex to the Mantle Rewards Station was announced on March 27, 2025. This campaign enabled users to lock MNT for MP, earning a share of 30 million Demex Points.

Overall, users connected their wallets, selected MNT amounts to lock, and allocated MP across reward pools, with daily snapshots ensuring transparent reward calculations. Despite a 21.9% QoQ decline in returning addresses, the Rewards Station’s diverse incentives mitigated steeper activity declines, fostering onchain interactions and ecosystem engagement.

Methamorphosis Season 3

Following the success of Season 2, where the supply of cmETH grew by 214.0% to over 235,920 tokens, mETH Protocol launched Season 3 of Methamorphosis on March 26, 2025. This 180-day campaign, ending Sept. 22, 2025, focuses on deepening ecosystem alignment, rewarding users, and positioning cmETH as a chain-agnostic restaking asset.

Season 3 introduces "Powder" points, earned through cmETH holdings, application usage, and liquidity pool participation, redeemable for future COOK rewards. Users earn 5 Powder per cmETH daily for wallet holdings, 10 Powder per cmETH for application usage (e.g., PENDLE, Treehouse), and 40 Powder for YT/SYT/PTY activities on platforms like Equilibria Finance and Karak. Liquidity pool rewards offer 10-30 Powder per cmETH LP daily, depending on the pool type (e.g., cmETH/$ETH, cmETH/USD). The season integrates about 20 protocols, including WOOFi, Dolomite, Mitosis, and Omega, with new additions like Swapsicle and Hyperbeat.

Since its launch on Oct. 30, 2024, cmETH has offered users access to ETH staking yields (approximately 3-4% APY), restaking rewards via EigenLayer, Karak, and Symbiotic, and additional incentives like Powder points and partner rewards (e.g., Veda points). Season 3 aims to enhance cmETH’s composability and flexibility, supporting mETH Protocol’s goal of efficient restaking across chains.

EcoGalaxy: Mantle Surge

A key cross-ecosystem effort in Q1 was the EcoGalaxy: Mantle Surge event, a collaborative campaign between Mantle Network and Bybit. Running from March 6-27, 2025, this initiative featured a prize pool of 1 million MNT in airdrop rewards. The campaign aimed to facilitate user acquisition, align incentives among participating teams, and increase visibility across the ecosystem. Participants engaged in five competitive leaderboard rounds, earning "Wishes" by completing tasks that could be used in a raffle or leaderboard for more rewards. Interacting with the Mantle ecosystem through trading, holding, or other onchain activities unlocked additional earning opportunities. The campaign drove success for participating protocols, experiencing an approximate 675.0% increase in daily active addresses and a 146.0% rise in total daily transactions during the event.

Building off of Mantle’s collaborative efforts with Bybit, the project’s commitment to transparency was evident during critical events such as the Bybit security breach (Feb. 21, 2025), which involved unauthorized withdrawals of mETH and cmETH tokens.The mETH Protocol team responded swiftly and comprehensively:

• Paused cmETH withdrawals.
• Blacklisted the attacker's wallet addresses.
• Reduced cmETH liquidity on the Mantle Network.
• Successfully recovered $42.0 million in assets from the exploiter's address.

The mETH Protocol's built-in security features, particularly the eight-hour withdrawal delay for cmETH transactions, provided the team with crucial time to react. This delay allowed for the implementation of immediate protective measures, demonstrating the effectiveness of Mantle's multi-layered security approach. Throughout this turbulent period, deposits and staking services continued to operate.

Mantle’s Yapper Leaderboard launched by Kaito

Mantle’s Yapper Leaderboard, launched in partnership with Kaito, introduced a content-driven engagement initiative to amplify community voices and ecosystem visibility. Participants compete for a spot among the top 50 contributors by producing original content related to the Mantle ecosystem. The challenge offers a 150,000 MNT prize pool, with an additional 10,000 MNT allocated for Discord-based contributors through the “Yap Club.” The program's first phase concluded on April 16, 2025.

Treasury Value and Holdings

In Q1 2025, Mantle’s total treasury holdings denominated in USD decreased from $3.9 billion to $3.5 billion, reflecting a 10.3% QoQ decline in line with broader macroeconomic conditions throughout Q1 2025. MNT accounted for 65.4% of the total treasury holdings ($2.3 billion). The second-largest allocation was mETH, representing 14.8% ($519.2 million), followed by ETH at 11.9% ($417.6 million). Other notable positions included USDC (3.0%, $104.8 million), USDe (2.5%, $86.1 million), and a combination of USDT, sUSDe, and COOK tokens totaling 2.4% ($84.9 million). The updated distribution underscores Mantle’s continued reliance on its native token for treasury value while maintaining moderate diversification across Ethereum-based assets and select stablecoins.

According to DefiLlama, as of March 31, 2025, Mantle’s treasury ranked second among all protocols.

Technology Advancements

Mantle Network introduced several updates throughout Q4 to enhance its network, integrate DeFi innovations, and improve technological capabilities.

Mantle Network: Integration with EigenDA:

On March 19, 2025, Mantle Network completed the full integration of EigenDA, becoming the first Ethereum Layer-2 to adopt the data availability solution. The upgrade replaces Mantle’s in-house “Mantle DA” layer with EigenDA’s infrastructure to support higher throughput, improved resilience, and enhanced economic alignment.

The integration delivers three primary advancements:

• Censorship Resistance: The number of data availability nodes increased from 10 to over 200, reducing reliance on a small operator set and improving uptime guarantees.
• Bandwidth Scalability: EigenDA enables 15MB/s throughput, surpassing Ethereum’s 0.0625MB/s limit, eliminating data bottlenecks, and supporting sustained network growth.
• Security-Yield Alignment: The system is secured by over 163,000 mETH (~$335 million) restaked through EigenLayer, combining high availability with yield opportunities for stakers.

OP Succinct: Testnet Integration:
On March 26, 2025, Mantle Network deployed its OP Succinct integration to the Sepolia testnet, marking an initial step toward transitioning from an optimistic rollup to a zk-validity rollup architecture. This upgrade enables cryptographic finality using zero-knowledge proofs while maintaining compatibility with the OP Stack, allowing developers to build with minimal changes to existing codebases​.

Key improvements introduced by the integration include:

• Fast Finality: Final confirmation times are reduced to approximately one hour, reducing idle capital costs and enhancing responsiveness for institutional-grade onchain use cases.
• ZK-Proven Security: The network shifts from trust-based systems to cryptographically verified transaction finality, increasing integrity and lowering reliance on a centralized sequencer.
• Cost-Efficient Proofs: Succinct’s SP1 prover network and optimized zkVM execution lower proof generation costs using aggregation and curve-based optimizations, improving scalability under high load.

The testnet upgrade also introduced:

• Mantle Succinct Proposer: A component that submits ZK state proofs to Ethereum.
• Kona: A Rust-based state transition engine supporting block derivation.
• Alloy: A Rust library enabling efficient interaction with OP Stack modules.
• Live integration with EigenDA: Allows zkVMs to consume and verify DA layers during execution using KZG commitments​.

cmETH’s Expansion to HyperEVM:

On March 25, 2025, cmETH announced its expansion to HyperEVM by launching a pre-deposit vault in collaboration with Mizu and Hyperbeat. The HyperETH vault allows users to deposit cmETH on Ethereum. While protocols are not live yet as of March 31, 2025, cmETH will then be bridged to HyperEVM and deployed into partner protocols via Royco Markets. The reward structure includes underlying staking yields, restaking rewards from protocols like EigenLayer and Karak, and additional points from Hyperbeat, Mizu, and Veda. Existing cmETH protocol initiatives, such as Methamorphosis Season 3, expanded incentives across new ecosystems in Q1, such as HyperEVM.

Ecosystem Analysis

In Q1 2025, Mantle Network’s stablecoin market cap increased 27.0% from $369.1 million to $468.6 million. This strengthening was primarily reflected in the market cap of USDT, which comprised 72.5% of the total stablecoin market cap in Q1. This growth signals rising demand for stable, onchain liquidity within the Mantle ecosystem.

A Shift in Narrative

In Mantle’s Q1 2025 letter to tokenholders, the protocol formally introduced an updated strategic framework that repositions the project as an onchain ecosystem dedicated to changing the future of finance and blockchain scalability, bridging traditional finance (TradFi) and DeFi. This vision extends beyond its initial role as an L2 scaling solution. It reflects a broader vision to develop a modular financial stack supporting institutional-grade use cases and everyday financial activities.

At the core of this narrative is an updated six-pillar framework:

1. Mantle Network: The foundational Ethereum L2 built on the OP Stack, now advancing toward zk-rollup compatibility via Succinct integration. As the "Liquidity Chain," Mantle Network aims to solve persistent capital efficiency constraints in decentralized markets.
2. mETH Protocol: A liquid staking and restaking platform designed to offer institutional-grade yield products.
3. Function (formerly Ignition FBTC): A BTC yield instrument focused on turning idle BTC into a productive asset through wrapped, DeFi-compatible structures.

The remaining three pillars, the Mantle Index Four, Mantle Banking, and MantleX, represent forward-looking initiatives under active development:

1. Mantle Index Four (MI4): A tokenized, yield-bearing, institutional-grade crypto index targeting $1 billion in assets under management, seeded by Mantle’s treasury. It provides broad digital asset exposure (BTC, ETH via mETH, SOL via bbSOL,sUSDe) tailored for institutional-grade funds.
2. Mantle Banking: A DeFi-native approach to retail finance infrastructure, offering blockchain-based payment, lending, and wealth management tools. Inspired by platforms like Revolut, this product seeks to bridge fiat and crypto flows without relying on centralized exchanges.
3. MantleX: A research and development initiative focused on integrating AI agents into Mantle’s infrastructure. Applications include treasury optimization, social engagement, and DeFi automation (DeFAI), with use cases ranging from onchain research to capital deployment.

This narrative marks Mantle’s transition from a single-product protocol to a vertically integrated financial platform. Underpinned by its sizable treasury, Mantle aims to deliver solutions across staking, asset management, payments, and AI-driven finance.

Updates to Mantle’s Bitcoin Ecosystem

On Feb. 13, 2025, Mantle formally rebranded its Bitcoin-focused product line “Ignition FBTC” to “Function,” reflecting a broader vision to transform BTC from a passive store of value into an active reserve asset for the programmable economy. At the center of this initiative is FBTC, a liquid, composable, and yield-generating wrapped BTC product designed for both DeFi and traditional financial markets.

Function’s launch highlights several core differentiators:

• Institutional Backing: FBTC is supported by partners including Galaxy Digital, Antalpha Global, and Mantle.
• Capital Efficiency: FBTC offers minting and burning, optimized liquidity, and integration across over 25 protocols.
• Network Reach: FBTC is currently deployed across eight chains, enabling wider access and utility for BTC capital.

Function aims to address limitations in existing wrapped BTC solutions. The protocol’s vision is to replicate the transformative role stablecoins played for USD by enabling BTC to "move, earn, and power" modern financial applications.
The rebrand also marks a structural shift. “Function” now refers to the broader financial infrastructure, while FBTC is the 1:1 BTC-backed asset.

Closing Summary

The broader crypto market experienced a downturn in Q1 2025, with ETH’s market cap declining by 46.0%. In line with this broader decline, Mantle’s circulating market cap fell 36.6% QoQ, decreasing from $4.2 billion in Q4 2024 to $2.7 billion in Q1 2025, slightly outperforming ETH. Mantle maintained a leading position among competing protocols, prioritizing long-term infrastructure development​ in Q1 2025. Products such as the mETH Protocol and Function remained central to the network’s architecture, closing the quarter with $709.7 million and $1.2 billion in TVL, respectively​. Despite a downturn in network usage metrics, incentive programs, including the Mantle Rewards Station, Methamorphosis Season 3, and ecosystem-wide campaigns, like Mantle Surge and Kaito’s Yap leaderboard, contributed to sustained onchain activity​. Technological advancements, including the full integration of EigenDA and deployment of OP Succinct on testnet, reinforced Mantle’s modular infrastructure roadmap and set the stage for further scalability improvements​. With a formalized six-pillar framework positioning the network as an integrated platform for onchain finance, Mantle advances with a clear trajectory toward deepening relevance in the onchain financial space.

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