Mantle Index proposal

Preface

The Mantle ecosystem has been developing since the start of the year. Among new Layer-1 and Layer-2 networks, Mantle L2 stands out due to its large treasury storing over $800M in bluechip assets alongside $3B in their MNT governance token.

When it comes to transparency, Mantle comes undefeated providing detailed breakdowns of their treasury assets and monthly expenses. Everything is verifiable at: https://treasurymonitor.mantle.xyz/

Our investment thesis for the Mantle ecosystem is simple: a large treasury combined with a lot of power MNT holders have over managing that treasury, poses Mantle for explosive growth.

Overview Mantle Index is an index of LP and lending strategies involving Mantle’s MNT governance token, ETH and its Mantle-wrapped version mETH, multiple Mantle-native altcoins and stablecoins. Mantle already hosts multiple ambitious projects, namely Ondo with their RWA-backed stablecoin USDY, an innovative lending protocol Init Capital and a synthetic stablecoin issuer Ethena among many others.

Each of the above mentioned parts is balanced out:

• Bluechip assets (MNT and ETH) account for 60% of the overall index
• Volatile Mantle altcoins (MOE, LEND) constitute 20% of the index
• Remaining 20% are reserved for stablecoins (USDC and USDY) to smoothen the volatility

Below is the current index composition:

• 20% wMNT-mETH LP
• 20% mETH-WETH LP
• 25% MOE-wMNT LP
• 15% LEND-wMNT LP
• 10% USDY-USDC LP
• 10% Init Capital USDC Lending

Expected return: the APY for each strategy fluctuates significantly, alongside the prices of underlying tokens. Excluding all asset volatility, the average APY in liquidity farming rewards currently sits above 100%.

Chain: Mantle The index is deployed on Mantle, making it cheap to interact with even during the times of high load.

Vault safety score: 3/5 Simplicity: 3/5 Longevity: 3/5 Protocol safety: 3/5

The whole Mantle ecosystem is fairly new, with only a few months of security record. While protocols included in the index are required to be audited, the audits do not eliminate all the risks of investing in DeFi products.

Combined with a meaningful allocation towards volatile Mantle altcoins, the index can be considered a high-risk investment.

Strategy management The strategies are expected to be rotated relatively often. A strategy will be replaced due to: incentives drying up An exploit affecting an active strategy A new promising protocol launching on Mantle

Rebalancing

On top of that, Locus ensures the funds are always equally distributed between bluechips (MNT and ETH), stablecoins and high-risk altcoins to provide diversified exposure. If any strategy deviates from its intended allocation by 10 percentage points, it will be brought back to target allocations upon harvest.

Points distribution Strategies utilizing mETH actively earn Eigenlayer points. Due to the index architecture, users do not earn points directly. Instead, the vault claims tokens upon TGE and airdrops them to users according to their contributions.

Snapshots of user balances are taken daily in order to distribute airdrops in a fair manner.

Fee structure 10% performance fee is charged ONLY on yield and is taken upon harvest. Asset price fluctuations are NOT subject to any fees. 1% annual management fee is charged on all deposits upon harvest.

Audit links and detailed information about the utilized protocols will be provided upon launch.