MANTA NETWORK: Bringing Privacy, Speed and Interoperability to DeFi.
With the completion of a $1.1Million seed round led by Polychain, Three Arrows Capital and Almeda Research, Manta Network, a privacy-focused interoperable network, looks ready to build its Layer1 privacy solution for DeFi. Other investors in this seed round for Manta Network include Hypersphere Ventures, Defiance Capital, Multicoin Capital, BTC12 Capital, Genblock Capital, Rarestone Capital, AU21 Capital amongst others. Manta Network aims to solve the problems of Privacy, Speed and Interoperability currently faced by decentralized finance. According to Jack Platts, Cofounder of Hypersphere Ventures,
“Manta Network takes a practical approach to implementing zk-SNARKs at the blockchain level, enabling cheaper and more private financial transactions. We look forward to supporting Manta’s adoption in the Polkadot ecosystem.”
Since the inception of decentralized finance, the problems of privacy, speed and interoperability have hindered the global adoption of DeFi, hence, a non-optimal utility of the innovation. According to etherscan, the mining difficulty of the Ethereum Network hit an new All Time High of 4,855.306TH on Monday, February 8th, 2021. This rise in mining difficulty usually results in the congestion of the Ethereum Network and high Gas fees, hence, slow transactions and poor usability, as most individuals and fintech firms find this feature regressive.
Most traders and trading bots also take advantage of this network congestion to front-run highly profitable traders by viewing their unconfirmed trades and using a higher transaction fee to gain higher priority and execute trades. In the words of Shumo Chu, CEO and Co-founder of Manta Network, via an email,
“The volume is large and increasing on decentralized exchanges, but DEXs are also a hotbed for front-running opportunities due to the transparent nature of the blockchain. Someone can see your transaction before it gets written and confirmed, and make the same transaction with a higher fee to get priority and pass that transaction before you do.”
These problems including the non-interoperable nature of the Ethereum Network, has limited the operations of DeFi. With the total value locked in DeFi rising from about $550Million in March, 2020 to over $36Billion in February, 2021, the need for Privacy, Speed and Interoperability cannot be over emphasized.
On February 8th, 2021, the Federal Reserve Bank of St. Louis, released its research on DeFi and how it may lead to a new paradigm shift in the financial industry. This signals the presence of institutions, fintech companies and a new wave of adopters in the DeFi industry. Manta Network aims to expand DeFi into this wider global market with better conveniences and privacy solutions.
According to the survey by Manta Network, 73.2% respondents “have either hesitated or completely avoided making a transaction in the past because they were worried about the privacy implications of that transaction,” while, 84% of the respondents were worried about wallet addresses being linked to their real identity, due to the permissionless nature of blockchain technology. Manta Network solves this DeFi privacy problem by using zk-SNARKs, a non-interactive form of zero knowledge proofs to deliver scalability and privacy to DeFi. Manta Network would also use Substrate to build a Layer1 privacy protocol that combines with zk-SNARKs’ unintelligible feature to prevent front-running by traders and trading bots. Using Polkadot’s GRANDPA and Polkadot’s parachain architecture, Manta Network would deliver fast consensus and Interoperability to decentralized finance, giving room for a massive global adoption of DeFi.
As a parachain on the Polkadot Network, Manta Network would build a privacy-preserving Automated Market Maker decentralized exchange on Substrate, to integrate its Layer1 privacy protocol. According to Chu, this protocol would bring privacy to users, transactions and user identity.
“While you are still able to monitor your own transactions, no one else can do so anymore…..By taking this and applying it in an interoperable manner [through Polkadot], we’re able to provide a plug-and-play solution for the entire [DeFi] ecosystem in the future.”
Manta Network in December, 2020, partnered with Equilibrium, a crypto firm that offers a cross-chain money market combining pooled lending with synthetic asset generation and trading, to share its technical expertise with Manta Network on an open standard for fungible tokens, while also improving interoperability among Polkadot parachains. Manta Network in December, 2020 partnered with Tidal Finance, an insurance cover marketplace to provide insurance cover for its users. Manta Network also partnered with Reef Finance, a smart liquidity aggregator and yield engine, to increase the liquidity of Manta’s trading pools on its privacy-preserving decentralized exchange, while also exploring privacy-token modularity and new use cases for it in DeFi. Before the end of Q1, Manta Network will be delivering the first version of its testnet, while in future releases of the testnet, will introduce other assets for interoperability as well as exchange functionality.
“Our goal is to get mainnet up before the end of the year, but we recognize the importance of making sure that the security aspects of our network are thoroughly tested and addressed before we make the decision to launch the main net,” said Shumo Chu. Upon launch of the privacy-preserving decentralized exchange, Manta Network would utilize its governance token, $MA, for community governed decisions like selecting new trading pairs and selecting new trading tokens.
While Decentralized finance gradually disrupts Traditional finance, Manta Network’s solutions for Decentralized Finance might just be the much needed GAME CHANGER.
