Mantle and Compound have announced an extensive collaboration that will allow the integration of the USDe stablecoin and the mETH token, allowing both ecosystems to collaborate and expand together.
Recently, we have witnessed a significant movement in the DeFi ecosystem: the Mantle ecosystem, a key player in blockchain innovation, has successfully completed the integration of USDe and mETH tokens with Compound, one of the most established and respected lending and borrowing protocols in the sector. This news not only marks an important milestone for Mantle, but also represents a substantial advance in the maturation and expansion of the DeFi universe, opening up a range of possibilities for users of both platforms.
This integration, which is already a palpable reality, is the result of a joint and strategic effort between Mantle Network, the operators of the Ethereum liquid staking protocol mETH, and the Compound team. The incorporation of USDe, the innovative decentralized stablecoin, and mETH, the token that represents the liquid staking Ether within the Mantle ecosystem, to the platform of Compound, means that users can now use these assets as collateral to borrow other crypto assets or, conversely, deposit them to generate returns.
This seemingly simple functionality has profound implications for the utility and adoption of these tokens, as well as the vitality of the DeFi ecosystem at large. Furthermore, discussions are underway for the possible integration of cmETH, a re-staked version of mETH, which could further deepen this fruitful partnership.
Mantle x Compound: a fusion with great possibilities
To understand the magnitude of this development, it is crucial to understand the role that both Mantle and Compound play in the crypto landscape. Mantle has positioned itself as an ever-growing blockchain ecosystem, driven by its Ethereum layer-2 network (Mantle Network) and its liquid Ether staking protocol (mETH Protocol). Its vision is focused on building a sustainable on-chain financial center, offering innovative products that combine institutional expertise with the transformative power of blockchain technology.
Compound, on the other hand, stands as one of the fundamental pillars of DeFi, a decentralized protocol that allows users to lend and borrow crypto assets safely, transparently, and without the need for traditional intermediaries. Its reputation is based on its robust infrastructure, high security standards, and decentralized governance model.
Facilitating DeFi interoperability
The integration of USDe and mETH into Compound is not a one-off event, but rather a strategic step that pursues multiple objectives to strengthen the Mantle ecosystem. First, it boosts the multi-chain expansion of USDe, a stablecoin that has shown remarkable growth, especially within the Mantle network, where it already has a significant amount of total value locked (TVL).
By integrating with Compound, USDe consolidates its position in the competitive decentralized stablecoin market, offering users greater utility and accessibility. Consider a user who owns USDe and wants to obtain liquidity without having to sell their holdings. Now, thanks to the integration with Compound, they can deposit USDe as collateral and borrow another asset, such as Ether or Dai, to cover their short-term financial needs. Similarly, another user might see USDe as an opportunity to generate returns, by depositing it in Compound and earning interest on it.
Secondly, the addition of mETH as collateral within Compound significantly expands its utility and encourages the widespread adoption of liquid staking solutions. Prior to this integration, mETH primarily represented the right to a portion of staked Ether within the Mantle protocol, generating rewards for it. Now, by being accepted as collateral on Compound, mETH holders can unlock new financial opportunities. Imagine a user who has staked their Ether through Mantle and owns mETH. Now, they can use that mETH as collateral on Compound to borrow other assets, without having to unwind their staking position and lose the accrued rewards. This not only increases flexibility for mETH users, but also incentivizes more people to explore the advantages of liquid staking.
Third, this collaboration acts as a catalyst for the growth of decentralized applications (DApps) within the Mantle ecosystem. By providing increased liquidity and new financial tools, the integration with Compound creates a more attractive environment for DApp developers and users. For example, a lending DApp within the Mantle ecosystem could now directly integrate Compound functionality, allowing its users to use USDe or mETH as collateral in a simple and efficient way. This encourages innovation and the creation of new financial products and services within the Mantle ecosystem.
Aligning visions and markets
Gabriel Foo, DeFi Growth Lead at Mantle, highlighted the importance of this integration, stating that “Trust in DeFi is built on security and stability. Compound’s long-standing reputation for security aligns perfectly with our vision. This integration marks a crucial milestone in the expansion of our ecosystem and demonstrates Mantle’s commitment to sustained growth in the DeFi space.” These words reflect Mantle’s strategic vision to partner with industry leaders who share its commitment to safety and innovation.
From Compound’s perspective, the integration of USDe and mETH also brings significant benefits. The addition of these assets diversifies the collateral options available on the platform, attracting new users and increasing overall activity. USDe, with its growing popularity and focus on decentralization, represents a valuable addition to the set of collateral accepted by Compound. Likewise, mETH, as a liquid staking representation of Ether, offers a new avenue for users to interact with the Compound protocol. Compound’s reputation as a secure and trustworthy protocol is further enhanced by the partnership with a growing ecosystem like Mantle, underlining its commitment to responsible innovation within the DeFi space.
The integration of USDe and mETH into Compound was accomplished through successful proposals within Compound’s governance system, underlining the decentralized and community-based nature of both projects. The approval of these proposals by the Compound community demonstrates the trust in the robustness and potential of Mantle’s assets. This transparent and participatory governance process is critical to the long-term sustainability and growth of DeFi protocols.
Ethena continues to push its stablecoins
It is important to highlight the distinctive features of the assets that are now part of the Compound ecosystem. USDe, issued by Athena Labs, is presented as a synthetic stablecoin backed by cryptocurrency collateral and short positions in Ether futures. It aims to maintain peg with the US dollar in a decentralized and transparent manner. On the other hand, mETH represents the Ether deposited in the Mantle liquid staking protocol. By staking ETH through Mantle, users receive mETH in return, allowing them to participate in the security of the Ethereum network and earn rewards, while maintaining the liquidity of their assets.
The mention of ongoing discussions regarding cmETH integration adds an additional layer of interest to this collaboration. cmETH, the re-staked version of mETH, could offer new opportunities for Compound and Mantle users. Re-staking is an emerging practice in the crypto space that allows users to earn additional yields by re-staking their assets across different protocols. The potential integration of cmETH into Compound could open up new avenues for yield generation and capital optimization within the DeFi ecosystem.
A win-win for the DeFi ecosystem
In summary, the full integration of USDe and mETH with Compound represents a significant milestone for the Mantle ecosystem and an important step forward for the DeFi space at large. This strategic collaboration not only expands the utility of USDe and mETH, offering their holders new opportunities to generate yield and access liquidity, but also strengthens Mantle’s position as a hub of innovation in decentralized finance. At the same time, Compound benefits from the addition of new assets to its platform, attracting a broader user base and consolidating its leadership in the sector. Security, innovation and collaboration are the fundamental pillars of this partnership, which promises to continue generating a positive impact on the future of on-chain finance.
As the Mantle ecosystem continues to grow and evolve, strategic partnerships like this one with Compound will be crucial to achieving its vision of a more open, accessible, and decentralized financial future. The focus is now on the next steps of this collaboration, with the potential integration of cmETH on the horizon, which could unlock even more value and opportunities for users of both platforms. This is a clear example of how collaboration and co-innovation are driving the maturation and mass adoption of decentralized finance.
