Curvance x Mantle: Unlocking the Capital Efficiency of RWA-Backed Stablecoins
This is the next article in Curvance’s partnerships series, spotlighting the projects and their yield-bearing assets supporting our testnet release.
Curvance is proud to unveil our latest partnership with Mantle Network, a major step in realizing our quest to evolve into the ultimate chain-agnostic reward layer.
Curvance’s unwavering commitment is to simplify the yield optimization user journey and reduce the complexity of the DeFi landscape by allowing users to operate seamlessly from a single dApp.
The Curvance DAO wants to create a DeFi environment where capital efficiency is paramount and innovative yield-bearing assets become accessible, unlocking new use cases.
Curvance users can now use different yield-bearing assets, including LP tokens, Liquid Staking Tokens (LSTs), and Real-World-Asset (RWA) backed tokens as collateral for stablecoin loans or looping strategies while continuing to accrue native APRs on their assets.
As part of the partnership with Mantle Network, mUSD, and mETH will be integrated as collateral options in Curvance’s testnet.
On Mantle Network, mUSD and mETH
For those unfamiliar with it, Mantle’s Mantle Network is a Layer 2 scalability solution for Ethereum, standing out for its modular architecture.
As part of their suite of products, Mantle recently introduced Mantle LSP, a liquid staking protocol where users can stake their ETH and receive Mantle Staked Ether (mETH), Mantle’s version of a LST.
Mantle’s ambition for mETH is to make it one of the most adopted and capital-efficient Ethereum LSTs, usable not only across Mantle Ecosystem but also as DeFi lego across partnering protocols.
As part of their product suite, in November 2023, Mantle partnered with Ondo Finance, a protocol leader in tokenized RWAs, to launch USDY, a tokenized note backed by RWA like short-term U.S. treasuries and banks demand deposits.
USDY holders accrue yield through token accumulation in the form of increased redemption value of their assets.
To abstract the complexity of this mechanism, Mantle introduced mUSD, a wrapped and rebasing version of USDY designed to maintain its peg to $1 and distribute its interest through the creation of new tokens.
The launch of mUSD is timely, as Treasury Bills emerge as a favorable way to get exposure to RWAs.
Moreover, Mantle’s commitment to the LST market is a testament to its alignment with Ethereum. It is among the best-funded L2s with a treasury that manages nearly 43k ETH, 213k of mETH, as well as hundreds of millions worth of stablecoins, making it the largest on-chain treasury when discounting native tokens.
As part of its Treasury Management Strategy, Mantle has dedicated a substantial portion of its assets, over 40k ETH (about $65m), to be staked within Lido to diversify treasury composition and generate sustainable revenues for the protocol as well as bootstrapping DEX liquidity and integrations across Mantle.
Following the proposal to stake treasury assets in Lido, the Mantle community approved MIP-26, advocating the seeding of liquidity for RWA and yield-bearing stablecoins up to $60m.
This initiative has significantly enhanced the liquidity and composability of USDY and mUSD within Mantle Ecosystem as:
- Collateral for Lending or Derivatives Trading
- Collateral in an AMM to improve the benefits of Providing Liquidity
- Payments and settlements while continuing to earn yields
The integration with the Curvance protocol elevates their value proposition further, allowing holders to extend the use of their yield-bearing stablecoins beyond the Mantle Ecosystem.
This not only boosts the composability and wider adoption of mUSD and mETH within the broader DeFi landscape but also provides Mantle users with new opportunities to leverage their assets.
Since its inception, Mantle has achieved remarkable milestones:
- Over 500k ETH staked in mETH
- A TVL of over $2b
- 4th in TVL among Liquid Staking protocols
How will the integration work?
Mantle’s mETH and mUSD will be integrated into our upcoming testnet and later supported in Curvance’s official release.
This marks a crucial step towards broader composability and adoption of RWAs in DeFi.
Both mUSD and mETH will be supported as collateral on the Curvance protocol, opening new avenues for leveraging their yield-bearing assets while continuing to earn their regular yield of approximately 5.9% APY and 6.14% APY, respectively.
Our testnet integration is a stepping stone towards broader collaboration that will fully come into fruition with our Mainnet Launch.
The deployment of yield-bearing stablecoins within DeFi is a landmark development, as they allow native yields while maintaining their peg to $1, ushering in new use cases within the realm of LST and RWA.
This integration empowers Mantle users to leverage Curvance, allowing them to utilize their mETH and mUSD as collateral. They can borrow stablecoins or loop their assets in a peer-to-peer environment while continuing to receive native yields. Effectively, this adds another layer of rewards and broadens the utility of their assets, which can now be collateralized and borrowed against.
The partnership between Curvance and Mantle boosts the latter’s efforts to penetrate the LST and RWA market while providing mUSD and mETH holders with new avenues to leverage their yield-bearing stablecoins.
The addition of RWA-backed stablecoins is a key milestone in amplifying Curvance’s value proposition and enhancing the utility and composability of these assets across DeFi.
Mantle has already established itself as a powerhouse in the L2 market, and their plans to boost the adoption of mUSD and mETH create a perfect synergy with the Curvance protocol.
While inherently complex, LST and RWA-backed products are made accessible through innovations such as mETH and mUSD. With Curvance’s user-friendly platform, the playing field becomes leveled for all types of users, and opens up democratized access to these sophisticated financial tools, such as those created by Mantle, enabling anyone to unlock their potential across DeFi.
Through these collaborations, the Curvance protocol emerges as a robust and rich ecosystem from inception, where users can maximize the utility of their assets, unlock liquidity, and boost overall capital efficiency.
The integration of RWA-backed stablecoins is another addition to the diverse suite of products we are developing, as well as a glimpse of what Curvance will offer once it goes live on mainnet.
To learn more about Curvance and Mantle, visit:
Curvance
Twitter: https://twitter.com/Curvance
Discord: https://discord.gg/curvance
Website: https://www.curvance.com/
Docs: https://docs.curvance.com/
Mantle
Twitter: https://twitter.com/0xMantle
Discord: https://discord.com/0xMantle
Website: https://www.mantle.xyz/
Docs: https://docs.mantle.xyz/network/introduction/overview
