Edit 2023-07-29
Due to the community feedback within this forum thread and various AMAs, the snapshot vote will contain the following modifications:
The max allowance for Lido ETH staking strategies (stETH, wstETH) will be 40k ETH
Add: Proposal term #3 “Other LSD projects’ ETH staking strategies will be assessed and proposed to Mantle Governance for approval in the future.”
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This proposal is authored by Cateatpeanut and the Mantle core contributor team.
1 Background
Treasury management, specifically related to LSD and ETH Staking proposals, has generated significant discussion. While Mantle Governance is responsible for approving the macro strategy, it is recommended to establish an authorized sub-governance body to handle minor details and time-sensitive decisions. Mantle Governance retains the ability to modify or revoke these authorizations based on performance.
We propose the establishment of a specialized sub-governance body called the Mantle Economics Committee. This committee will operate under the direction of Mantle Governance, within the scope of approved strategies and allowances. Its primary responsibility will be to evaluate and make decisions regarding the allocation of Mantle Treasury assets in a risk-averse and conservative manner. The committee will function solely as a decision-making body and will not hold or custody treasury assets. By structuring it as a special-purpose committee, our aim is to enable efficient and informed decision-making, facilitate commercial negotiations, and maintain strong checks and balances among existing Mantle entities.
2 Proposal
By voting “Yes”, you endorse the following terms:
Authorize the establishment of Mantle Economics Committee as a sub-governance body of Mantle Governance, as per the terms below. The committee shall solely focus on decision-making and shall not hold any Mantle Treasury assets.
Authorize the Mantle LSD and Lido ETH staking strategies, with a combined allowance of up to 200k ETH. The committee may engage in commercial negotiations and decide on the timing and size of strategy entry and exits.
3 Terms
3.1 Responsibilities
The Economics Committee shall have the following key responsibilities:
Periodically review strategies and make recommendations to Mantle Governance to modify the Approved Strategies and Approved Allowances lists. Any such modifications require a proposal to Mantle Governance and a subsequent vote.
Make decisions on entries into and exits from the Approved Strategies within the Approved Allowances. From the perspective of Mantle Treasury, the Economics Committee shall soley act as a decision-making body and shall not hold or custody any Mantle Treasury assets.
Evaluate strategies from the perspectives of Mantle product synergy, technical risks, commercial risks, and economic risks with a strong preference for strategies hosted on top-tier and battle-tested onchain applications.
Negotiate commercial terms for strategies, prioritizing principal protection mechanisms (e.g. insurance, bonding, collateral), lower fees, and flexible commitment durations.
Take any other actions or decisions for the purpose of any decisions or proposals that have been approved by Mantle Governance, with a focus on risk management and principal protection of Mantle Treasury assets.
3.2 Approved Strategies and Allowances
The Approved Strategies and Allowances are limited to the following:
Direct staking with Tier-1 node operators for Mantle LSD (during ramp-up phase).
Construction of (w)stETH-ETH and mntETH-ETH LP pairs on Ethereum L1 and Mantle L2 DEXes.
3.3 Internal Governance
The Economics Committee shall adopt a highly conservative approach to risk, and must abide by the following rules, which can only be modified through Mantle Governance:
The Economics Committee is a sub-governance body of Mantle Governance, and its membership, internal governance rules, and authorized scope of strategies and allowances can be modified by Mantle Governance at any time.
Expansion of Strategies and Allowances shall require authorization by Mantle Governance.
Strategy entries / deployment increase: Requires majority approval from committee members, with a minimum of 3 approvals.
Strategy exits / deployment reduction: Can be triggered by any 2 committee members.
Note: the above rule set is intentionally designed to prioritize a cautious approach for strategy entries while allowing for quicker strategy exits.
3.4 Membership
Initial Membership:
The initial membership of the Economics Committee shall consist of:
One member representing Mantle Governance, for policy interpretation and administrative support (Cateatpeanut).
Two members from the Mantle community and advisors with a background in trading or asset management (Jordi @gametheorizing and one member yet to be announced).
Two representatives from Mantle product Core Contributor teams (Mantle Network or Mantle LSD).
Changes to Membership:
Changes to the membership of the Economics Committee shall require either:
A majority decision by the existing Economics Committee members, with notification on the Mantle forum.
Hell yeah I vote yes! Seed wstETH liquidity on Mantle will make it a vibrant LST ecosystem which is the largest DeFi growth segment atm. This should also bring a plethora of LSTfi products like Pendle, Ethena, Raft, Gravita etc that will only keep growing. Mantle is perfectly positioned for this should the proposal pass.
Horrible idea. The community here is against going all in on Lido. See this thread for evidence:
To further make this some secret governance thing where a few people with economic incentive privately confer with Lido is truly awful.
Lido is a huge risk, the bigger it gets. If we are not accounting for risk, we are gambling. Either mantle should make its own LST or use a mix of LSTs to mitigate risk.
Do Mantle core contributor team even care about community feedback?
If so, you would have realized as @DrDoofus has already pointed, that there was opposition to this proposal in Lido’s post. As I already said there, I’m really looking for Mantle’s launch, but it would be a REALLY big turn-off for me if this strategy and Mantle itself become the reason why Lido’s almost surpasses the 33% of staked ETH marketshare.
No, including the top LSTs would make it a “vibrant LST ecosystem”. Including JUST stETH will make it a Lido vibrant ecosystem, and we already have enough of you.
Instead, you guys could focus on fully developing your v2 and stop with these greedy expansionary strategies.
Mantle team, really do reconsider adding more LSTs to this strategy, or a big part of the ecosystem will be hesitant to your launch and doubtful about your ethos.
I completely agree with the intiative to create the Mantle Economics Committee, where the committee is responsible for the strategy and ultimate deployment of treasury assets, but only once the Mantle community has approved said strategies.
Regarding the strategy itself, it is concerning to see the Lido allocation progressing, despite the pushback seen during the original proposal. I encourage the Mantle Core Team to evaluate alternatives that can create more strategic partnerships (as described here), have the potential to provide better economics for Mantle’s staked capital, whilst also aligning Mantle with the ethos of decentralisation.
This is Glenn from Blockdaemon. Would like to share some idea we have with the Mantle community:
Objective: Enable Mantle to stake ETH natively onto the chain while it prepares for the launch of its liquid staking protocol. After launch, the foundation can enable withdrawals of its ETH to its liquid staking protocol while minimizing both Entry / Exit Queues and accompanying Fees.
Proposal: Stake ETH natively with a professional staking provider(s) without setting withdrawal credentials. Once the Mantle protocol is ready to launch, change withdrawal credentials to Mantle’s withdrawal / escrow address so it is directly linked to the protocol and already generating rewards.
Pros:
Streamlined Efficiency
Allows Mantle to enter queue now and not have to enter queue again once its liquid staking protocol is ready
No withdrawal and re-stake of ETH will be needed
Lowest Cost Option
No trading, swap or slippage fees vs. using a liquid staking protocol like Lido
Lowest risk given Mantle is not exposed to DeFi / smart contract risk
Cheapest option (native staking is cheaper than any liquid staking options out there)
Native Staking: ~5% commission
Liquid Staking: ~10% commission
Preserves decentralization for the network by not giving ETH to largest liquid staking protocol
Considerations:
When Mantle changes withdrawal address to its Mantle protocol, liquid staking tokens will need to be generated. But this may cause concern with users or auditors since it will mean that tokens can be generated by events other than staking.
Possible Mitigation: Consider having the liquid tokens generated in a “one-time” genesis event in the code (i.e., this will only happen as the protocol is initialized, and cannot be invoked again).
A sub-committee focusing on economics could be a fine idea, but the devil is in the details.
An important detail missing from the proposal is what incentives and accountability are there for members of economics committee?
Without a clear understanding of the how Mantle DAO is motivating the members to align with it’s goals, we would be relying on the economic committee members altruism or sheer blind luck to yield objectively good results.
I vote “YES” and I think it’s fair that the Committee should be purely decision-making and should not own any Mantle Treasury assets - this will help make objective decisions.
I support this proposal and would like to propose P2P as one of the Tier 1 staking providers mentioned in it.
For a better understanding of why I believe P2P could be one of the providers, I would like to refer to my recent proposal, where you can learn more about us in general, our offer, and some unique security layers we have which I believe are one of the most important things when choosing a staking provider
I represent P2P and am responsible for leading the business development team. Open to a conversation with the community and would like to hear your thoughts
I support the proposal and vote YES!
Converting treasury ETH to the LST in general and wstETH in particular is the best option in terms of return, risks, and agility. With wstETH Mantle will be able to get rewards with the market rate with minimal risk while keeping funds liquid. One of the killer features of wstETH compared to the other LSTs is ability to withdraw ETH at any time and in any amount.
Am I missing something, or is this a naive proposal?
Lido: Mantle provides $200M ETH to Lido. Gets stETH to enhance the ecosystem.
Pros:
Lido “name” draws bootstrapping liquidity.
Lido is an established LST. So safety for funds.
Mantle makes an additional 2% in ETH yields (due to Lido’s
Cons:
No Enterprise Benefit to Mantle. $LDO is not going to increase in EV value materially.
Centralization Risk. Enough has been spoken about Lido’s centralization risk. Would you want 40% of your treasury in one service?
What does “Lido” as a nametag mean? Other LSTs have been growing much faster (% terms) since April.
The value maximization framework is betting on smaller players to enhance their FDV. Many will be willing to provide a network share of their tokens to Mantle as a synergistic move. This way, you enhance ETH decentralization and make $20-40M in EV value of an LST’s governance token while retaining all your ETH rewards.
Everything proposed in the forum is what every other serious LST protocol does across L1s and L2s.
Seriously, what does Mantle even get out of this deal? I am appalled this suggestion has come from the Mantle team. Do you work for Lido or Mantle?
I’m Drew, the protocol specialist on the NOM team at LidoDAO.
The ‘decentralization’ & ‘community’ hand-waving comments do not address the actual pain points for this treasury size, it instead feels more of something else…
I recommend that the committee proceed with their current course of action. It’s been discussed across multiple threads, is likely be the simplest, and most capital efficient way to proceed with this amount of volume, at least initially.
It is appealing for the funds overall safety to have flexibility to lean on the liquidity of wstETH, in case there is a emergent need to transition, or even exit completely-- this could prove difficult to do with other solutions currently (see murathan’s lst-wars dune board).
stETH has already proven it’s flexibility with Celsius withdrawals (a larger amount than the maximum proposed).
Moreover I would like to highlight that Lido Protocol is not a centralized entity who’s business practices and business continuity need to be inherently trusted. It’s continuity and roadmap parallels Ethereum’s and does not carry the regulatory capture or economic attack risk of staking-as-a-service providers or less liquid staking protocols.
Eventually, I would love to see Mantle Governance and the Economics committee determine an even more robust holding diversification.
To answer your question, Mantle gets a revenue share agreement with Lido DAO:
The usual staking reward setup within Lido is:
Stakers: 90%
Node Operators: 5%
Lido DAO Treasury: 5%
This first-of-its-kind for Lido revenue sharing agreement would return a percentage of revenue earned by Lido DAO Treasury to BitDAO 12 months after the arrangement comes into effect.
The revenue sharing agreement would last 12 months with a possibility to extend subject to a DAO vote.
With the passing of MIP-25, the following actions will be taken:
Authorize the establishment of Mantle Economics Committee as a sub-governance body of Mantle Governance. The committee shall solely focus on decision-making and shall not hold any Mantle Treasury assets.
Authorize the Mantle LSD and Lido ETH staking strategies, with a combined allowance of up to 200k ETH, and Lido ETH staking strategies up to an individual allowance of 40k ETH.
The committee may engage in commercial negotiations and decide on the timing and size of strategy entry and exits.
Other LSD projects’ ETH staking strategies will be assessed and proposed to Mantle Governance for approval in the future.
This thread will be archived. We’d like to thank the community for participating in Mantle governance!
