BitDAO Approves Rebrand and Token Swap

BitDAO, a venture armed with the second largest treasury in all of crypto, plans to throw its weight behind a Layer 2 community it has developed.

A governance vote that handed on Could 19 dedicated to rebranding BitDAO as a Layer 2 referred to as Mantle and in addition permitted plans to allow one-way conversions of the venture’s BIT tokens to MNT, the brand new community’s native token.

It’s a serious transfer by BitDAO, a venture which has a variety of assets however has operated largely out of the limelight. With BitDAO doubling down on a Layer 2, the venture is signalling that it’s going to compete in a subsector of crypto that has grow to be each crucially vital and visual in 2023 as Ethereum appears to be like to scale. Because of its treasury and a few key hires, Mantle could also be primed to be an actual participant within the scaling wars.

BitDAO, which defines itself as an “open platform for proposals which might be voted upon by BIT token holders,” controls a $4B treasury, in keeping with DeFi Llama. That’s second solely to the Arbitrum DAO, which launched earlier this 12 months with the airdrop of the ARB token.

Whereas the BitDAO treasury primarily consists of its native BIT token, it’s properly diversified — at $296M, it holds the biggest quantity of stablecoins of any DAO.

The BIT token has a market capitalization of $763M, making it a top-100 digital asset.

Regardless of its measurement, BitDAO stays a complicated venture to many. That lack of readability is a part of what’s driving the rebrand to Mantle, which was beforehand a sub-project of BitDAO.

“There’s fragmentation of communities, messaging, and mind-share between the Governance (BitDAO) and Product (Mantle) elements of the present BIT ecosystem,” reads the proposal.

With the vote, and a subsequent discussion board post exploring the main points across the conversion of BIT to MNT, BitDAO has made a definite option to affiliate with Mantle. Earlier, the venture functioned like an funding DAO, directing capital in direction of different tasks, of which Mantle was one.

Crowded Layer 2 Sector

Now, BitDAO is taking a determined step in direction of aligning itself with a Layer 2 community, a sector which has been purple scorching this 12 months with the Arbitrum airdrop and the launch of severalzero-knowledgerollups.

Seraphim Czecker, who works for the corporate behind Lido Finance, DeFi’s largest protocol, advised The Defiant he’s “fairly bullish,” on Mantle. Czecker cited Mantle’s deep pockets as one purpose he thinks Mantle will likely be a participant to observe within the more and more aggressive Layer 2 house. He additionally mentioned the engineering staff is well-versed on the earth of maximal extractable worth (MEV), probably probably the most technical subsector in crypto, which includes reordering pending blockchain transactions for revenue.

Czecker added that BitDAO’s affiliation with ByBit, a high 10 by quantity centralized alternate whose merchants are additionally lively DeFi customers, must also buoy Mantle.

ByBit Contributions

ByBit acquired 60% of the preliminary 10B BIT provide, in keeping with BitDAO’s documentation. Of these 6B tokens, 4.5B had been topic to a year-long vesting interval earlier than beginning to unlock on a month-to-month foundation.

ByBit beforehand contributed 2.5 foundation factors of its futures buying and selling quantity to the BitDAO treasury. After one other proposal, BIP-20, handed on April 4, the alternate began transferring a set quantity of BIT tokens to BitDAO on a month-to-month foundation.

The overarching purpose for the swap was {that a} predictable provide of BIT tokens will lower the emphasis on rising BitDAO’s treasury and enhance the deal with the venture’s initiatives.

The proposal additionally mentioned that by tying BIT contributions to buying and selling quantity, the token is extra more likely to legally be categorized as a “ByBit token.” The constant transfers make BIT much less of a “centralized alternate token,” in keeping with the proposal. A widely known alternate token, FTT, performed an important function in bringing down the FTX empire final 12 months.

Testnet Section

Mantle hasn’t launched but. Whereas the venture has made some compelling claims about its modular design, a faculty of thought round blockchain structure which has gained traction, it’s nonetheless within the testnet section.

Arjun Kalsy, head of ecosystem at Mantle, advised The Defiant that the staff is focusing on mid to late July for a mainnet launch.

Mantel touts different differentiating components like its decentralized sequencer, which contrasts with main scaling options like Arbitrum and Optimism, which have centralized ones. Sequencers are the specialised nodes of Layer 2s which manage and submit the scaling options’ transactions to a Layer 1 blockchain like Ethereum.

Piotr Szlachciak, the co-founder of L2BEAT, which compiles Layer 2 knowledge, advised The Defiant that L2BEAT doesn’t consider testnets. “As soon as [Mantle] goes dwell and we will see the precise code operating, a severe dialogue a couple of venture can happen,” Szlachciak mentioned, emphasizing that till the Layer 2 launches absolutely, he stays absolutely impartial on the venture.

For now, particulars of the token swap from BIT to MNT are being hammered out on BitDAO’s boards. There’s no assure that the MNT token will outperform — debate still swirls over methods to correctly worth Layer 2 tokens.

Nonetheless, with a singular connection to a serious alternate like ByBit, in addition to $230M raised in 2021 from main buyers together with Peter Thiel, buyers will possible take an extended take a look at MNT.