- Manta Pacific saw a 52% drop in crypto asset deposits in seven days after enabling STONE and wUSDM withdrawals.
- Users faced a dilemma between waiting for the official bridge to enable withdrawals or sell depegged assets at a loss to pursue other investments.
- Despite recent challenges, Manta Network plans to introduce new technical developments and campaigns to attract capital back.
In the last seven days, the total value of crypto assets deposited on Manta Pacific, a modular Ethereum layer 2 blockchain, has fallen by 52%.
The decline occurred in the wake of the official Manta bridge enabling withdrawals of STONE and wUSDM from the blockchain on March 26.
Just one day prior, on March 25, the blockchain’s total crypto assets deposited stood at $497 million, but that number has since dropped to $245 million.
STONE represents a liquid staked version of Ethereum, positioning it alongside competitors like stETH or rETH, while wUSDM is a wrapped variant of USDM, a stablecoin offering yields derived from Treasury bills.
Kenny Li, a co-founder of Manta Network, told DL News that the significant outflow following the conclusion of its New Paradigm campaign was anticipated.
He attributed the exodus to users seeking short-term gains similar to those promised by the campaign’s airdrops.
The campaign, which began on December 14, incentivised users with NFTs that were later converted to tokens. The NFTs were awarded for bridging assets like STONE and wUSDM onto the blockchain.
However, this was a one-way bridge, meaning users had to wait until the campaign’s conclusion on March 26 to withdraw their assets.
Despite this, third-party bridges such as Rhino.fi facilitated user exits from the blockchain, though they didn’t support transfers of STONE and wUSDM.
Without the ability to withdraw STONE or wUSDM directly from Manta Pacific, users resorted to exchanging these tokens for Ether and stablecoins, such as USDC, which could then be withdrawn through the third-party bridges like Rhino.fi.
This led to a considerable strain on the value of STONE and wUSDM within Manta’s decentralised exchanges, causing their market value to deviate significantly from their supposed pegs.
Ultimately, the depegs for STONE and wUSDM created a situation where users were stuck with either a loss on the USD value of their deposits to chase investments elsewhere, like memecoins, or a wait for the bridge to open.
Many users decided to wait for the official bridge, as shown by the over $200 million in assets leaving the blockchain within the last week.
Despite the depegging on Manta, these tokens remained backed by their respective assets.
For instance, each STONE token was always supported by an equivalent value in Ether, but the challenge was that redemptions were feasible only on the Ethereum mainnet.
As long as users waited for the official bridge, they didn’t lose any value.
Reigniting interest
Manta has plans to attract this capital back. In addition to the ongoing Renew Paradigm and Restaking Paradigm campaigns, Li said his team has plans to introduce new technical developments that will bring new use cases to the industry.
He didn’t elaborate on what these use cases may look like, but he said they are expected to arrive in the next few weeks.
The hope is that the new use cases will reignite interest in the layer 2 blockchain.
Manta’s governance token, MANTA, is down 12% in the last seven days, trading at $2.80, which implies a $2.8 billion fully diluted value.
Ryan Celaj is a data correspondent at DL News. Got a tip? Email him at ryan@dlnews.com.
