Inside MANTRA DAO: Ecosystem of DeFi Services Powered by Polkadot Tech

https://blockonomi.com/mantra-dao/

Ethereum’s decentralized finance arena has seen the beginnings of breakout success in 2020, but with the rise of DeFi comes the prospect that other up-and-coming smart contract platforms and the chains and dApps they power will be able to peel off activity for themselves in the sector.

To be sure, Ethereum’s lead here is resolute for now. But that doesn’t mean there aren’t competitors already planting the seedlings for their own DeFi gardens. One of these competitors is Polkadot.

Polkadot is a multichain network, which essentially means it’s a blockchain of blockchains, where interoperability between these chains, called parachains, makes them open and interconnected rather than siloed. To this end, the Polkadot team developed Substrate, a framework for easily creating new cryptocurrencies and blockchains.

Of course, Polkadot is a young project as its initial version only just launched back in May 2020. But the network’s Substrate tech is already paving the way to DeFi services in the Polkadot ecosystem. A prime example of this dynamic is the rise of the Substrate-based MANTRA DAO.

A DeFi Platform for Polkadot

Simply put, MANTRA DAO is a community-governed decentralized application, or dApp, built on Rio Chain, a blockchain underpinned by Polkadot’s Substrate infrastructure. At its core the MANTRA platform has three pillars, which are lending, staking, and governance.

As such, MANTRA’s key offerings center around cryptonative earning opportunities like decentralized lending and saving services, as well as non-custodial crypto staking. Moreover, the project’s governance system empowers and incentivizes stakeholders to manage MANTRA into a well-tuned and effective platform.

A Hub for Staking Polkadot Assets

Since Polkadot is structured around the interoperability of parachains, it stands to reason that over time projects will proliferate atop it. Accordingly, MANTRA DAO is positioning itself to become a non-custodial staking hub for Polkadot-based assets and beyond.

Indeed, out of the gate MANTRA will support staking for Polkadot’s DOT token and KSM, the native token of Kusama, Polkadot’s community research network. OM, the governance token of MANTRA DAO, will also be supported by the group’s staking platform.

Yet MANTRA has also set its eyes beyond Polkadot. For example, the DAO also intends to provide non-custodial staking services for a range of general Delegated Proof-of-Stake (DPoS) assets, including ADA, BAND, ELA, EOS, TRX, and XTZ. Additionally, the DAO is planning to support staking around straightforward Proof-of-Stake (PoS) assets like ETH 2.0 and DASH, too.

Key Features
Key Features

Notably, the platform initially won’t charge staking service fees for Polkadot-based assets, though it will require them for DPoS assets. This dynamic could lead to MANTRA DAO becoming a premier early staking hub in the Polkadot ecosystem.

Yet the platform has another staking-centric service in the works, which is dubbed MANTRA POOL. This pool will function as a crypto savings game: the service will randomly select winners to receive weekly cuts of the staking rewards generated by MANTRA DAO Foundation, a separate legal entity focused on fostering the MANTRA ecosystem.

One-fourth of the staking rewards accrued by the Foundation will be earmarked for the savings game, and these rewards will be distributed as they come, i.e. a basket of assets like DOT, OM, KSM, and so forth. To join the game, users must either burn one OM per entry ticket, or they can qualify for automatic entries if they score high enough in MANTRA DAO’s reputaiton protocol, KARMA.

Cross-Chain Lending Bridges

Lending has been the hottest nook of Ethereum’s DeFi surge this year, and MANTRA DAO is looking to tap into that heat.

That’s because an early focus for the platform will be building “cross-chain bridges to existing open-source DeFi lending protocols, such as Compound, to offer our users access to lending interest for Ethereum-based assets.”

It’s a smart, if you can’t beat ’em join ’em approach that will give Polkadot users the ability to access the best that Ethereum’s lending sector has to offer. But this is just the start of MANTRA DAO’s lending plans.

Eventually, the platform’s roadmap has it embracing 3rd-party lending service providers “across multiple blockchains” but with the perk of all this being mashed into a simple user interface.

Even further down the road, the project is planning to build its own lending algorithm and stablecoin, a la MakerDAO has done in the Ethereum ecosystem. The difference is that MakerDAO loans can only be collateralized with Ethereum-based tokens, while MANTRA DAO will more nimbly allow cross-chain collateralized assets. This means users will be able to take out loans denominated in MANTRA DAO’s USDOM stablecoin using assets from across the cryptoeconomy.

DeFi for the Community, By the Community

Governance has been among the hottest topics in the cryptoeconomy this year. MANTRA DAO is making it the heart of its project using its OM token, which users will rely on to decide the parameters of the DAO’s DeFi offerings. The project’s builders explained in a brief shared with Blockonomi:

“In order to submit a proposal and vote within the MANTRA DAO ecosystem, a member must first hold and stake OM. Each staked OM represents 1 vote within the MANTRA DAO system. In order to propose a topic for voting, users will need to deposit $100 worth of OM as collateral. If the proposal should fail, they will lose the OM, but if the proposal passes evaluation from the council, then the vote will proceed. If the proposal receives a simple majority (51%) of the votes from the valid voters (staking OM), then the depositor will receive their OM back as well as an additional amount of KARMA for helping the ecosystem.”

This voting process takes place over the course of a month, with one week each dedicated to 1) proposals, 2) evaluation of proposals, 3) voting on proposals, and 4) proposal implementations.

Moreover, every 24 months MANTRA voters will on the members of a MANTRA DAO Council, a sort of executive branch of the decentralized organization. The body will start out at 5 members and be capped at 9, with odd-numbered membership always employed so as to prevent ties during council votes. Council members will have a 5-term term limit, as well.

This structuring will additionally allow for the creation of sub-councils within MANTRA DAO, though these lesser councils will be subject to the veto power of the main council.

Building Up the Community

MANTRA DAO’s ecosystem won’t build itself up. To that end, grants can help foster and attract talented builders around the platform’s infrastructure.

That’s why MANTRA DAO Foundation is, in fact, establishing a grants program that will boost efforts to create new applications and use cases around MANTRA’s tech and OM tokens. Accordingly, these grants will be denominated in OM or the USDOM stablecoin, and will number between $5,000 and $100,000 in value.

Conclusion

If there ever was a time for non-Ethereum platforms to throw down the gauntlet and try to gain market share in the DeFi arena, now’s it. The sector’s catching fire right currently and the best time to move on that reality was yesterday. MANTRA DAO, as a Substrate-based blockchain on Polkadot, is certainly one of these gauntlet throwers.

For now, it’s impossible to say whether projects like this will be able to seriously catch up on Ethereum’s DeFi moats, but MANTRA DAO is giving it a go, and it has a real opportunity to become an early DeFi hub in the Polkadot ecosystem. If DeFi eventually goes multichain, this DAO will be well positioned accordingly.

The post Inside MANTRA DAO: Ecosystem of DeFi Services Powered by Polkadot Tech appeared first on Blockonomi.

Governance Tokens: Surveying Ethereum’s Most Popular DeFi Projects in 2020

https://blockonomi.com/governance-tokens/

Governance tokens, which give holders the right to influence the direction of decentralized finance projects, have been among the biggest hits in the Ethereum ecosystem this year.

Indeed, at the time of writing the combined market cap of Ethereum’s top 8 DeFi governance token projects had risen to over $4.3 billion USD. For comparison, bitcoin’s market cap is currently $169 billion, ether’s is $26 billion, XRP’s is $6 billion, and bitcoin cash’s is $4 billion.

This reality suggests these governance tokens are becoming increasingly popular in the cryptoeconomy for giving users a direct stake in managing DeFi platforms. However, it remains true that many folks in the space still don’t understand these tokens and what they do. To highlight Ethereum’s reigning and rising governance tokens, let’s survey the largest ones as well as two newcomers, Curve’s CRV and mStable’s MTA.

COMP

Market cap: $1.68 billion
Current total supply: 10,000,000
Current price: $168

COMP, the governance token of the money market protocol Compound, is presently the largest governance token per market cap. The token gives its community of holders the ability to vote on key changes to Compound. COMP can also be delegated to others for voting.

In blooming as a decentralized lending and borrowing hub, Compound was already very popular in DeFi before its COMP token went live in June 2020. Since then, COMP liquidity mining, which allows users of Compound to earn COMP proportional to their activities, has helped propel Compound to being the largest DeFi dApp in general with nearly $700 million worth of assets locked in its protocol right now.

SNX

Market cap: $669.6 million
Current total supply: 194,006,803
Current price: $3.45

SNX is the native asset of Synthetix, a decentralized platform for issuing Ethereum-based synthetic assets that can track real-world assets like currencies, commodities, and more. In December 2019, the Synthetix team announced a transition to decentralized governance, wherein a few major Synthetix stakeholders would initially control the project’s treasury ahead of SNX token holders eventually taking over the treasury and protocol.

SNX already has utility beyond this governance aspect, as users can lock SNX up as collateral to create Synths like sUSD, i.e. synthetic USD. To this end, SNX is not strictly a governance token, but it is evolving toward this additional model.

MKR

Market cap: $447.4 million
Current total supply: 1,005,577
Current price: $444.93

MKR, the governance token of the popular DeFi borrowing and stablecoin project MakerDAO, was the DeFi ecosystem’s original governance token. Since then, the asset has inspired multiple other projects toward decentralized governance and has served as the early bar against which these other projects measure their tokens against.

MKR is used to vote on important changes to the Maker protocol, like the addition of new collateral types. MKR doesn’t have in-built vote delegation functionality (like COMP) for now, but plans are in motion to bring delegation to the token. Compared to many peer projects, MKR is also noticeably deflationary, as MKR fees paid to the Maker protocol get burned.

LEND

Market cap: $385.5 million
Current total supply: 1,299,999,942
Current price: $0.30

LEND is the collateral and governance token of Aave, a rising decentralized borrowing and lending protocol on Ethereum. Aave is akin to Compound in what it offers to DeFi users, though Aave provides unique features like flash loans and credit delegation, i.e. the ability to let others borrow against your collateral.

When staked, LEND confer voting rights and also earn their holders fees generated by the Aave protocol. At the same time, these staked LEND serve as a defense for Aave in the case of mass liquidation episodes.

KNC

Market cap: $333.8 million
Current total supply: 210,552,294
Current price: $1.59

KNC is the native token of the Kyber Network, an on-chain liquidity aggregator protocol that lets users make decentralized trades. In July 2020, the Kyber team rolled out the Katalyst upgrade and KyberDAO, which allow users to stake KNC in order to earn voting fee rewards and and govern the Kyber Network. Notably, Kyber is among Ethereum’s most popular decentralized exchanges as things stand.

BAL

Market cap: $294 million
Current total supply: 35,870,000
Current price: $8.20

Balancer is an Ethereum-based automated market maker (AMM) that’s somewhat similar to Uniswap. In contrast to Uniswap’s two-token liquidity pools, though, Balancer offers the ability to open up pools composed of up to 8 different ERC20 tokens. BAL is the governance token of Balancer and lets holders decide the direction of the protocol. The newly launched project is also offering a liquidity mining campaign, in which Balancer users are rewarded with BAL on a running basis.

BZRX

Market cap: $286 million
Current total supply: 1,030,000,000
Current price: $0.28

bZx is a decentralized lending and margin trading protocol, and its team is behind the Fulcrum and Torque platforms. This summer, protocol’s builders unveiled the v3 token model of BZRX, the governance token of bZx. This token can be staked to earn protocol fees, as well as Balancer fees and BAL rewards for serving as a liquidity provider in an underlying Balancer pool.

UMA

Market cap: $187.3 million
Current total supply: 100,312,319
Current price: $444.93

Launched in April 2020, UMA is the governance token of the UMA protocol, which can be used to create a wide range of synthetic, “priceless” assets. These assets are priceless because they minimize oracle use in not relying on an on-chain price feed. Accordingly, UMA tokens give holders the right to help decide important protocol parameters, supported asset types, and more. Moreover, in the case of price request disputes UMA holders step in to fulfill requests through the UMA protocol’s Data Verification Mechanism.

CRV

(Stats TBD)

Curve, a decentralized exchange protocol for efficient stablecoin trades, is currently the 8th-largest DeFi project according to tracker site DeFi Pulse. In June 2020, the Curve team announced plans to launch CRV, a governance token, and CurveDAO, an Aragon-based organization that would be used to decentralize Curve’s governance going forward. CRV, which will be rewarded (even retroactively) to Curve users, will have an initial supply of 1 billion. The token’s inflationary schedule will eventually get the supply to just over 3 billion tokens. Reportedly, CRV will be released to the public by the end of summer 2020, at which point price discovery will begin.

MTA

(Stats TBD)

MTA is the governance token of mStable, a meta-stablecoin protocol that lets users create mASSETS, e.g mUSD, using underlying baskets of stablecoins like USDC, USDT, and Dai. MTA had its initial offering on July 18th on the Gnosis-backed Mesa exchange protocol, which is focused on superior liquidity in relying ring trades. 2.66 million MTA were released during the sale, the proceeds of which were delivered to the mStable project’s associated Aragon DAO. Notably, MTA can be staked for earning platform fees and interest.

Conclusion

With the rise of governance tokens like the ones above will come factions, and from these factions will come protocol politicians, who will approach the newfound politics of these DeFi platforms in different ways.

For example, some protocol politicos for lending platforms will be more permissive toward adding a wide variety of supported collateral types, including more centralized assets like USDC, WBTC, and so forth. Conversely, other politicos will be more conservative and lean toward keeping these DeFi platforms as non-reliant on centralized solutions as possible.

This is just a taste of what’s to come, too; the potential of this political arena is now just beginning to take shape, just as the wider DeFi sector is.

The post Governance Tokens: Surveying Ethereum’s Most Popular DeFi Projects in 2020 appeared first on Blockonomi.