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

Background

Mantle Network is a high-performance Ethereum layer-2 network built with modular architecture and aligned with Mantle strategic interests via the $MNT token.

Ecosystem funds have historically served as an important catalyst of growth for new emerging protocols and ecosystems, in particular, developer and decentralized applications (dApps) adoption of a new protocol.

This proposal represents an updated version of the previous Mantle EcoFund Proposal. It has been enhanced by incorporating valuable feedback from both the Mantle Community and Strategic Venture Partners.

Proposal

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

1. Authorize the establishment of the Mantle EcoFund with $100M from Mantle Treasury.

2. Authorize the establishment of the Mantle EcoFund Investment Committee.

3. Authorize the first capital call: 10 million USDC from Mantle Treasury.

Note: When the proposal is passed by the Mantle community by 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".

Overview

Our proposal aims to catalyse a capital pool of $200 million, to be deployed within the Mantle ecosystem over the next 3 years through the collaborative efforts of the Mantle EcoFund and Strategic Venture Partners. This $200 million capital pool consists of two components:

1. 100 million USDC provided by Mantle from its Treasury and managed by the Mantle EcoFund.

2. As the Mantle EcoFund's investments are matched typically 1:1 with the Strategic Venture Partners, the remaining $100 million will be comprised of the external matching capital from Strategic Venture Partners when they co-invest with the Mantle EcoFund opportunistically.

Objectives

The Mantle Ecofund's key objectives are:

• Supporting founders and protocol technology partners building within Mantle Ecosystem

• Driving adoption of Mantle Network among developers and dApps

• Incentivizing reputable Strategic Venture Partners to support and invest in Mantle Ecosystem

• Ensuring sustainability of the Mantle EcoFund through fund performance and returns

Summary

Details

Investment Mandate

The Mantle EcoFund aims to be the "first money" into high-quality and innovative early-stage projects building within Mantle Ecosystem, providing support alongside the Strategic Venture Partners.

Beyond initial investments, the Mantle EcoFund has the flexibility to offer liquidity or follow-on investments to portfolio companies that show traction and robust use cases involving $MNT. These decisions are subject to review by the investment committee.

Investment Committee (IC)

To ensure adherence to industry best practices and rigour for venture investing, we propose that an independent Investment Committee be set up for the Mantle EcoFund to enhance transparency, accountability, and the overall quality of investments made by the Mantle EcoFund.

Policies - IC Membership

Policies - IC Approval Framework

Strategic Venture Partners

The Strategic Venture Partners should be independent, qualified and reputable venture funds and individuals (e.g., founders, subject matter experts, key thought leaders, etc.) that can provide in-depth knowledge of the industry, product experience, strong networks, and have demonstrated commercial success and returns from previous investments. Crucially, these partners should share our belief in supporting aspiring founders within Mantle Ecosystem.

We believe that a diverse mix of venture funds and individuals as Strategic Venture Partners will create exciting opportunities for future growth in the web3 ecosystem. By supporting innovative products developed by ambitious founders, driven by real market needs and sustainable business models, we can better catalyse growth within the Mantle ecosystem.

Venture funds who have expressed interest in being Strategic Venture Partners include Alumni Ventures Blockchain Fund, Animoca Ventures, Bankless Ventures, Cadenza Ventures, Dragonfly Capital, Figment Capital, Folius Ventures, Ghaf Capital Partners, Hashed, Hashkey Capital, Leadblock Partners, Lemniscap, Pantera Capital, Play Ventures, QCP Capital, Republic Crypto, Selini Capital, SevenX Ventures, Shima Capital, Spartan Group and Whampoa Digital.

Policies - Strategic Venture Partner Membership

Structure, Fees, and Incentives

The deployment period for the Mantle EcoFund is targeted to be 3 years with an optional 2-year extension. To ensure accountability and monitor progress, the Investment Committee will conduct reviews of performance and key metrics twice a year.

Regarding management fees, we propose adhering to the industry standard of a 2% annual management fee. This fee will be based on the capital called and be used to support the operating requirements of the Mantle EcoFund team, such as sourcing, due diligence, legal, portfolio support, fund admin, etc.

Incentives - Strategic Venture Partners

To foster meaningful capital deployment and strengthen post-investment support within the Mantle ecosystem, we propose a profit-sharing mechanism wherein 20% of the investment returns generated by the Mantle EcoFund are shared with the Strategic Venture Partners. Note that this distribution will only occur after the initial capital contributed by Mantle has been returned, and each Strategic Venture Partner's incentives shall be calculated independently based on their matched investments.

This incentive structure aims to create greater financial alignment between the Mantle EcoFund and the Strategic Venture Partners, which translates to a stronger joint commitment to support founders and projects building on Mantle. Additionally, the Mantle EcoFund reserves the right to request support from the Strategic Venture Partners in due diligence processes and divestment activities as needed. This collaborative approach ensures a mutually beneficial and collaborative relationship between the Mantle EcoFund and the Strategic Venture Partners.

Incentives - Mantle EcoFund Operating team

To incentivise the Mantle EcoFund Operating team, we propose to implement a 10% carry on returns (reduced from industry norm of 20% to 30%) after the $100 million investment principal has been returned to Mantle.

Note that this carry incentive applies to the total portfolio of the Mantle EcoFund and not the sub-portfolios of each Strategic Venture Partner. For additional clarity, there will be no carry for the Mantle EcoFund Operating team until the entirety of the $100 million investment principal has been returned to Mantle.

Policies - Fund Structure and Operator Incentives

Simplified Example - Using Two Strategic Venture Partners

Key Performance Targets

• Developmental target of >40 Projects deployed in Mantle Ecosystem over a period of 3 years

• Financial returns target of >1.5x MOIC (Multiple on Invested Capital)