Introduction to mETH and LSP

In the evolving landscape of Ethereum and its Layer 2 solutions, Mantle introduces a game-changing element to staking - the Mantle Liquid Staking Protocol (LSP) and its associated token, mETH. This system redefines the staking experience, providing value and liquidity in a way that aligns with the ethos of decentralization.

mETH in the Mantle Ecosystem

Mantle Staked Ether (mETH) is a representation of staked ETH that accrues value over time. As a permissionless ERC-20 token, mETH is designed to be easily integrated into applications, offering a straightforward way for users to participate in the rewards of staking.

Key Features of mETH

• Rewarding Staking Experience: mETH is crafted to be the most adopted and capital-efficient ETH staking token in the ecosystem, with a focus on Mantle L2 DeFi applications, technology partners, and exchanges.

• Simplified Architecture: Following the Ethereum Shanghai Upgrade, mETH features a streamlined design emphasizing the integrity of the ETH to mETH process on L1, avoiding the complexities associated with other Proof of Stake tokens and chains.

• Risk Management: The non-custodial nature of the core smart contracts ensures that the staked ETH is securely held within the protocol. With enforced sanity bounds and risk limits, mETH introduces robust risk management into the staking process.

  mETH as a Mantle Core Product

As an integral part of the Mantle ecosystem, mETH benefits from the resources of the Mantle Treasury, the expertise of Mantle’s engineering team, and the growth capabilities that come from being a Mantle core product. It adheres to the Mantle Governance process, ensuring that its progression is aligned with the community’s interests and the overall direction of the Mantle ecosystem.

Using Mantle LSP

The Mantle LSP offers a modern, permissionless staking solution that stands out for its simplicity and modern architecture:

• Stake ETH, Receive mETH: Users can stake ETH and instantly receive mETH, which reflects the value of the staked ETH plus any accumulated rewards.

• Unstake with Ease: When unstaking, users receive their principal staked ETH and rewards. The Mantle LSP ensures this process is seamless, with mechanisms in place to synchronize with the Ethereum network’s conditions.

  Product Status and Roadmap

Mantle LSP has progressed through several stages since its proposal:

• Launched initially with a permissioned closed alpha, it gradually transitioned to a permissionless system with expanding mETH capacity limits.

• The Mainnet v1 launch established a permissionless staking system, with an initial cap that ensures stability and security as the system scales.

The Mantle LSP represents a holistic approach to staking within the Ethereum ecosystem, offering an innovative, efficient, and secure way to earn rewards through staking.

In the next section, we will explore the underlying mechanism of liquid staking that powers the Mantle LSP and mETH, delving into how this system enhances the functionality of staked assets and integrates with the broader DeFi landscape.

The Mantle Liquid Staking Protocol (LSP)

Venture into the heart of Mantle’s innovation, where the Liquid Staking Protocol (LSP) transforms the concept of staking. The LSP is not merely a static process of locking in assets; it is a dynamic, fluid system that encapsulates the principles of decentralization and liquidity that are so prized in the blockchain world.

The LSP’s Core: A Harmonious Symphony of Technology

The LSP functions as a complex yet harmoniously orchestrated system where each component has a distinct role that contributes to the protocol’s integrity and efficiency. Users interact directly with the staking contract, a sophisticated piece of blockchain engineering that serves as the portal to Mantle’s staking universe. Here, the exchange of Ethereum for mETH is just the beginning of a relationship that extends far beyond a simple transaction.

Upon this engagement, the user’s ETH is not merely held but is put to work within the Ethereum Beacon chain. The node operators, meticulous in their duty, ensure that these assets are staked responsibly, generating rewards that are the lifeblood of the staking process. This is where the strength of the network meets the individual’s quest for growth, creating a symbiosis that fuels the Mantle ecosystem.

The chart represents the flow of operations within the Mantle LSP, from user interaction to reward distribution.

1. User Interaction
   Users begin the process by sending Ethereum (ETH) to the Staking Contract and in return, they receive mETH. This exchange is facilitated by the staking contract, which acts as the point of entry into the LSP.

2. Staking Contract Functions
   There are several functions within the staking contract marked as I1, A2, and A3, which likely represent different operations such as initiating staking, allocating ETH for unstaking requests, and allocating ETH for compounding (reinvesting) rewards.

3. Security Systems
   The protocol includes several security mechanisms:
   Pausers have the ability to pause the protocol in case of irregularities.
   Guardians can also pause the contract as a preventive measure.
   Mantle Security Roles are responsible for unpausing the contract once any issues are resolved.

4. Oracle System
   Oracle Contract and Oracles provide external data necessary for the LSP, such as the current exchange rates.
   The Oracle Quorum Manager ensures that a consensus is reached among the oracles before the data is used.

5. Node Operators
   These are entities responsible for the actual staking of the ETH on the Ethereum Beacon chain, performing validation services for the network.

6. Return on Staking
   The Consensus Layer Receiver collects the staking rewards (issuance rewards + principal ETH) and other incentives (like MEV and priority fees).
   The Execution Layer Receiver might handle additional operations related to executing transactions or smart contract interactions.
   Both layers’ rewards are then sent to the Returns Aggregator.

1. Returns Aggregator
   This is where all the rewards from the consensus layer and execution layer are pooled together. After accounting for service fees, the remaining rewards are distributed to mETH holders.
   The legend in the chart indicates the flow of assets
   The green paths represent the core asset flow, which is the flow of ETH.
   The blue paths might represent other asset flows or data flow within the LSP.

   Ensuring Security and Trust

The robustness of Mantle’s LSP is underpinned by a multifaceted security framework. The pauser and guardians, akin to vigilant sentinels, ensure the protocol’s operations are seamless and secure. They have the capability to swiftly intervene, preserving the protocol’s integrity against any operational irregularities. Mantle Security Roles stand ready to act, empowered to maintain the protocol’s resilience in the face of challenges.

Oracles, the bearers of knowledge, bring in the essential data that dictates the nuanced operations of the LSP. They form a quorum, a collective that reaches consensus on vital information, ensuring that the LSP operates with the most accurate and current data. This is critical in maintaining the protocol’s efficacy and in ensuring that the staking experience is as rewarding as it is secure.

An Ecosystem of Yield and Opportunity

Within the LSP, the returns aggregator plays a pivotal role in consolidating the rewards generated from the consensus layer and execution layer, determining the yield that will be distributed among mETH holders. This system is not just about accruing returns but optimizing them, ensuring that the rewards of staking are maximized and that the value generated is reflective of the network’s success.

The Mantle LSP is, at its essence, a product of thoughtful design and a testament to the capabilities of modern blockchain technology. It is an ecosystem that offers users the opportunity to participate in the network’s validation services, to contribute to the network’s security, and to share in the successes of the network’s operation.