Introduction
This proposal seeks to allocate 1 million MANTA tokens from the Manta Foundation to enhance liquid staking of MANTA on-chain through BiFrost’s vMANTA and establish a stable MANTA/vMANTA pool on Firefly DEX. This initiative aims to support and maintain a stable peg for liquid staking tokens like vMANTA.
Enhancing liquid staking on Manta Network benefits both users and the overall network. Traditional staking involves locking up MANTA for a set period, limiting the flexibility for users who may want to utilize MANTA for other purposes such as providing liquidity on a DEX or borrowing against this capital.
From the network’s perspective, liquid staking contributes to stability and security. Increased staking participation leads to a more decentralized network, making it more resistant to attacks and manipulation. Liquid staking lowers the entry barrier, as users do not have to worry about the opportunity cost of locking their assets for extended periods.
BiFrost
BiFrost offers convertible liquid staking of MANTA through vMANTA. It has played a significant role in supporting Manta Network’s liquidity, with $4.1M in TVL (as of this writing) on its liquid staking platform for Manta Network.
Users can stake their MANTA directly on Manta Pacific via omni.ls on BiFrost. After receiving xcvMANTA on Pacific, users can provide liquidity in the MANTA/xcvMANTA pool on a DEX to earn rewards.
Allocating 1 million MANTA tokens for liquidity will solidify the collaboration between BiFrost and Firefly, the leading native DEX on Manta Network, creating compelling use cases for xcvMANTA.
Firefly DEX
Firefly DEX is the leading native DEX on Manta Pacific, utilizing concentrated liquidity (CL) to help maintain the peg of liquid staking tokens like vMANTA.
About Concentrated Liquidity (CL)
Uniswap V3 introduced concentrated liquidity, allowing liquidity providers (LPs) to allocate their capital within specific price ranges, rather than distributing it uniformly. This enables LPs to concentrate liquidity where they expect trading activity, increasing their APRs and reducing token price slippage.
For example, if an LP believes a token pair will trade between $1,000 and $2,000, they can allocate funds within this range. This concentration enhances liquidity depth and stability.
Firefly DEX, optimized for Manta Network, is the only native DEX on Manta Pacific with Uniswap V3 CL functionality.
How CL Helps Maintain Stable Pegs
Concentrated liquidity is crucial for maintaining stable pegs for stablecoins and pegged assets like Liquid Staking Tokens. By focusing capital within a narrow price range, CL ensures substantial liquidity to support the peg, buffering it against market fluctuations.
For instance, with $1M of MANTA/vMANTA liquidity on a V2 Uniswap fork DEX, a $100,000 trade might move the vMANTA price by 10%. On a V3 Uniswap fork DEX like Firefly, with CL, the same trade might only move the price by fractions of a percent. This low slippage is key to maintaining stable pegs and is useful beyond just dollar-pegged stablecoins.
In the case of BiFrost’s vMANTA, tied to MANTA’s price, LPs can allocate liquidity close to MANTA’s trading price. This concentrated liquidity ensures even large trades do not significantly impact vMANTA’s price, maintaining its 1:1 peg with MANTA.
Conclusion
A stable vMANTA/MANTA peg, achieved through Firefly DEX’s concentrated liquidity, provides users with greater confidence to stake MANTA, securing the network and enabling further earnings through Manta Network’s DeFi ecosystem via lending and liquidity provision.
Voting
This proposal is now open for community voting. Your participation is crucial!
Voting Period
The voting period will commence on Manta Atlantic. We encourage all community members to participate.