Manta Network's Crypto Asset Deposits Dive 52% After Bridge Activation

Crypto asset deposits on Manta Network plunged 52% in seven days following the enabling of withdrawals for STONE and wUSDM. This outflow was attributed to users seeking short-term gains and concerns over the tokens' depegged status. Despite these challenges, Manta Network plans to rekindle interest through new technical developments and campaigns.

Manta Network Experiences Significant Crypto Asset Deposit Decline Following Bridge Enablement

Manta Network, a modular Ethereum Layer 2 blockchain, has witnessed a substantial 52% decrease in the total value of crypto assets deposited on its platform within the last seven days. This decline follows the recent activation of the official Manta bridge, which allows for withdrawals of STONE and wUSDM from the blockchain.

On March 25, prior to the bridge enablement, the blockchain's total crypto assets stood at an impressive $497 million. However, this figure has since plummeted to a mere $245 million.

STONE, a liquid staked version of Ethereum, competes with the likes of stETH and rETH, while wUSDM is a wrapped variant of USDM, a stablecoin that generates yields from Treasury Bills.

Kenny Li, co-founder of Manta Network, acknowledges the significant outflow of assets following the conclusion of the New Paradigm campaign. He attributes this exodus to users seeking short-term gains similar to those promised by the campaign's airdrops.

The campaign, which commenced on December 14, rewarded users with NFTs that were later converted into tokens for bridging assets like STONE and wUSDM onto the blockchain. However, the bridge was unidirectional, meaning users were unable to withdraw their assets until the campaign's conclusion on March 26.

Despite this restriction, third-party bridges such as Rhino.fi facilitated user exits from the blockchain, although they did not support transfers of STONE and wUSDM.

Unable to withdraw STONE or wUSDM directly from Manta, users resorted to exchanging these tokens for Ether and other stablecoins, such as USDC, which could then be withdrawn through third-party bridges like Rhino.fi.

This led to a significant strain on the value of STONE and wUSDM within Manta's decentralized exchanges, causing their market value to deviate significantly from their supposed pegs.

The depegging of STONE and wUSDM presented users with a dilemma: either accept a loss on the USD value of their deposits in order to pursue investments elsewhere, or patiently await the opening of the bridge.

Many users opted to wait for the official bridge, as evidenced by the over $200 million in assets that left the blockchain within the last week.

Despite the depegging on Manta, STONE and wUSDM remained backed by their respective assets. For example, each STONE token was perpetually supported by an equivalent value in Ether. The challenge lay in the fact that redemptions were only feasible on the Ethereum mainnet. Users who patiently awaited the official bridge were not subjected to any value loss.

Manta Network is actively working on regaining the lost capital. In addition to the ongoing Renew Paradigm and Restaking Paradigm campaigns, Li reveals that his team is developing novel technical advancements that will introduce fresh use cases to the industry.

While the details of these use cases remain undisclosed, their introduction is anticipated within the next few weeks.

It is hoped that these new use cases will rekindle interest in Manta Network's Layer 2 blockchain. The network's governance token, MANTA, has experienced a 12% decline in the last seven days, currently trading at $2.80, representing a $2.8 billion fully diluted value.