[DISCUSSION] [EC Proposal] Second Capital Call and Updates

This proposal is co-authored by Mirana Ventures and the Mantle Core Contributor Team.

Background

This proposal presents an update on MIP-24: Mantle EcoFund, which authorized the establishment of a US$100 million Mantle EcoFund capitalised by the Mantle Treasury. This update will provide an overview of Mantle EcoFund’s investments from the first capital call of US$10 million, changes to existing governance processes, and expansion of the investment mandate of Mantle EcoFund.

Proposal

By voting “Yes”, you endorse the following terms with reference to details below:

  • Authorize the second capital call of US$30 million (in USDC) from Mantle Treasury.
  • Authorize the updated governance processes and expanded investment mandate of Mantle EcoFund.

Updates on Mantle EcoFund’s Investments

From 1st September 2023 to 15th January 2024, the Mantle EcoFund team reviewed 252 projects for potential investments. Amongst these, 58 (23%) projects were selected for deeper due diligence across multiple areas, such as the founders’ experiences, product and roadmap, traction, financials, tokenomics, and their strategic value towards Mantle Network. With a high degree of selectivity, only 10 (3.9%) projects were eventually selected for investment, and the projects are:–

S/N Project Name Project Description
1 Valent Valent is a next-generation lending/borrowing protocol. It is oracle-less and provides fixed-rate, dynamic-term lending/borrowing for all types of assets. It uses both an on-chain matching and off-chain matching engine to optimize price discovery and interest rate determination.
2 Range Protocol Range Protocol is building a permissionless infrastructure for on-chain asset management through non-custodial vaults where sophisticated vault managers can run their automated strategies with transparent on-chain execution.
3 LiquidX LiquidX is a venture studio concentrating on building Web3 companies designed for long-term sustainability. They are currently working on Pixelmon, a gaming-first IP studio, Gvrn (“Govern”), a blockchain-to-legal bridge SaaS company, and a stealth anime publishing and licensing company.
4 TsunamiX TsunamiX is a gamified spot and margin trading protocol that enables traders to trade crypto-assets. Through TsunamiX, traders climb the ranks of the leaderboard as they earn points with every trade they make.
5 Mufex MUFEX is a Decentralized Perpetual Exchange deployed across multiple chains, while also offering a trading experience akin to a CEX, ensuring swift order processing and a variety of order types. Additionally, MUFEX boasts unique features such as copy trading, telegram integration and leveraging on influencers for a multifaceted promotional strategy.
6 Butter Butter.xyz is an exchange tailored for degens, emphasizing trend-driven opportunities and fostering a transparent, fair environment. With unique features and exclusive markets, they aim to redefine the traditional trading experience in the crypto realm.
7 INIT Capital INIT Capital is building the next generation of money markets - liquidity hook money market, similar to Uniswap V4 Hooks for DEX. Any DeFi protocol can write their smart contracts to easily plugin and borrow liquidity from Init Capital permissionlessly.
8 Merchant Moe Merchant Moe is a decentralized exchange (DEX) that features the innovative liquidity book protocol that will transform the on-chain trading experience for its users. It is a franchise of Trader Joe and is uniquely positioned as a core trading and liquidity driver in Mantle. Merchant Moe also empowers traders by offering yield-accumulating opportunities, notably through its $MOE staking program which offers real yield derived from protocol fees through $sMOE, as well as voting power via $veMOE.
9 Renzo Renzo is a Liquid Restaking Token (LRT) and Strategy Manager for EigenLayer. It is the interface to the EigenLayer ecosystem securing Actively Validated Services (AVSs) and offering a higher yield than ETH staking. The protocol abstracts all complexity from the end-user and enables easy collaboration between users and EigenLayer node operators.
10 (To be disclosed) (To be disclosed)

These projects have each generated substantial growth and traction for Mantle Ecosystem. For instance, Merchant Moe recorded 4,700 active users on launch day, and attracted US$25 million TVL within the first week. Another EcoFund portfolio company, INIT Capital, attracted an impressive $49 million TVL in the first two weeks of their launch.

Catalyzing external capital and resources into Mantle Ecosystem

Crucially, the impact of the EcoFund was amplified by bringing external capital into the ecosystem. **In total, the above 10 portfolio companies raised more than US $30 million on top of the Ecofund’s investments, translating to more than 3x of the EcoFund’s initial US$10 million capital call. This outcome is a positive demonstration of the EcoFund’s efficacy in attracting and incentivizing reputable investors to invest in and support Mantle Ecosystem.

In particular, the above projects saw strong participation from the EcoFund’s Strategic Ventures Parnters (SVPs), who share a commitment towards supporting top-tier founders within Mantle Ecosystem. For example, SevenX, Bankless Ventures, Figment Capital, IOSG Ventures, Dragonfly Capital and Selini Capital co-invested in the above companies. Other reputable VCs such as Electric Capital, Robot Ventures, Nomad Capital, Tangent and Maven11 also participated in these funding rounds.

These investors not only provide independent validation of the EcoFund’s due diligence processes, but also offer invaluable post-investment support. They bring in-depth knowledge of the industry, product experience, and their extensive networks to fuel the continued growth of the EcoFund’s portfolio companies.

Updates to Mantle EcoFund’s Governance Processes and Strategies

Market dynamics have shifted significantly since the inception of Mantle EcoFund. In order to continue attracting quality projects/founders to build on Mantle, adjustments need to be made for greater operational efficiency and competitiveness. The following amendments are proposed such that the EcoFund can continue to achieve its objectives.

Changes to Investment Committee (IC) membership and approval framework

  • The Members of the full Investment Committee will be updated to the following:

    • 3x Representatives from Mantle Core Contributor team, Mantle Economics Committee, and advisors
    • 1x Major $MNT holder
    • 1x Representative from Mantle EcoFund operator (Mirana Ventures)
  • The IC Approval Framework will be updated to the following:

    • Each IC member must vote [Yes, Abstain, No] on each deal, and votes of each member will not be revealed publicly
    • For investments ≤ US$500,000, it requires at least 2 “Yes” votes by the IC
    • For investments > US$500,000, it requires a simple majority of “Yes” votes by the IC

Changes to Capital Call requirements

  • Subsequent Capital Call for the Mantle EcoFund is subjected to the performance review and approval by all members of the Investment Committee.
  • A quarterly report for the EcoFund will be shared with the Mantle Community.

Expansion of Investment Mandate

  • The EcoFund has always been the “first money” for high-quality and innovative early-stage projects building on Mantle. This also includes offering liquidity support and/or follow-on investment to portfolio companies that have demonstrated significant traction and adoption.
  • Moving forward, it is proposed that the Mantle EcoFund shall have an expanded investment mandate to invest into Accelerators, Incubators, Venture Studios and Funds selectively. These investments are subject to the same updated IC approval framework as described above, and capped at the maximum of 20% of the total US$100 million fund size.
  • The rationale for this expansion is that strategic investments into Accelerators, Incubators and Venture Studios (platforms that build, finance, and accelerate the growth of startups) would provide Mantle Ecosystem with a steady flow of projects that are native and exclusive to Mantle. Similarly, investments into Venture Funds would create opportunities for deeper strategic partnerships, leading to an expanded pipeline of deals, and greater involvement of Strategic Venture Partners (SVPs) in supporting founders that build on Mantle.

Conclusion

With the successful deployment of $10M from the first capital call, this proposal seeks approval for the second capital call of 30 million USDC in accordance with MIP-24, to update the governance processes, and expand the investment mandate of the Mantle EcoFund.

Additional Resources:

Note:

When the proposal is passed by the Mantle community through a “Yes” vote, the project team(s) are authorized to take all necessary actions to accomplish what is contemplated in the proposal, including without limitation, forming one or more legal entities and executing necessary legal documents. All legal and operational structures and documents shall substantially reflect the terms and conditions that are set forth in the proposal. Any material deviation from or inconsistency with such terms and conditions, except where such deviation or inconsistency is more favorable to the Mantle community, shall make the legal structure and documents voidable by the community. For the avoidance of doubt, terms that provide more governance rights, investor rights, deploy less investment amount for substantially the same stake or interest, or otherwise provide more economic benefits for Mantle shall be deemed as “more favorable terms”.

4 Likes

I completely disagree. You guys have really used the treasury too wastefully. The MANTLE ecosystem currently has not seen a single project listed on spot platforms

2 Likes