Head of Communications, Bybit
Mantle Explained: Everything You Need to Know Before Investing by Founder Igneus Terrenus
Igneus Terrenus, currently leading the charge with Mantle, a cutting-edge Layer 2 solution, shares his journey through the digital ...
About Igneus Terrenus
Igneus Terrenus, formerly Head of Communications at Bybit, now leads Mantle, an Ethereum layer-2 scaling solution. In a December 2024 interview, he described Mantle as "a way to scale Ethereum" and stated that Ethereum "has established such a dominant position going forward." He said that layer-2 networks have become "how people with less capital to start will interact with Ethereum." Terrenus also discussed meme coins, stating they are "really interesting because they don't promise anything" and that they are "the best way to feel invited" into crypto. He predicted that Bitcoin would at least double or triple from its current price, saying "we are looking at Bitcoin at least doubling if not like even higher 2x 3x of its current price." In earlier appearances, Terrenus discussed the rebranding of BitDAO into Mantle, which he said would make Mantle "the single largest treasury in the world." He has described the BitDAO treasury as holding approximately $3.9 billion in crypto assets. While at Bybit, Terrenus spoke about the company's security practices, stating that 100% of funds were stored in offline cold wallets and that Bybit spent around 25% of its budget on security. He also discussed an NFT project where Bybit "blew up a Lamborghini" in the Nevada desert, creating 999 charred pieces that were sold as NFTs, with proceeds reaching nearly $2 million.
Transcript (80 segments)
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Interviewer0:12
You maybe not, but for most people who are watching, fairly technical question. Let's try to talk as if we're talking to maybe not your daughter because she's 8 months old, but let's say she's 10 years old, or let's say you talk to your mother. Everything should be understandable as much as possible by people who don't really understand these things.
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Igneus Terrenus0:33
Mantle is a way to scale Ethereum. Ethereum is the world computer. That's the shortest way of saying it. And then I think a lot of times, you don't actually want to give an answer that explains everything, but you put the broad strokes on and then encourage them to ask more questions. I think that's the best way.
Going forward, it is the world computer. It is where the premium smart contracts are going to run for retail, for DeFi, for a lot of that. When people want to hunt for 100x, 1000x meme coins, Solana is a good choice. But especially with the Dencun upgrade that happened two or three days ago, depending on what time zone you are, now layer 2s are so cheap. Layer 2 is actually cheaper than Solana itself. So it really opens so much opportunity for the Ethereum ecosystem. And because this upgrade actually benefits layer 2 more than Ethereum, you could say this is the beginning.
To truly be the internet computer that everyone uses for every transaction, you obviously still need to increase the throughput. On layer 2, you make the transactions, execute off-chain, and then only batch them up at the end of a block and publish back down to L1. That way you can really grow exponentially, and still, because it's built on Ethereum, ensure the security is not compromised. It's like instead of paying for every drink, you get a tab and then you pay at the end of the night. That's the simplest terms.
Bybit, BitDAO, and Mantle. People understand that this project has a really solid background and that there is a reason why it's starting to become really big today and it is in a big momentum. The first incarnation of Mantle was called BitDAO. BitDAO is a decentralized autonomous organization, and at its height it was the largest in the world in terms of treasury. It was started by a lot of us who actually worked at Bybit. We were moonlighting, working on a side project, and received a lot of support. Bybit actually contributed more than a billion dollars worth of ETH and stablecoins to BitDAO.
Early partners of BitDAO bought into the idea: Peter Thiel of PayPal fame, Founders Fund, Spartan, Dragonfly, so on and so forth. BitDAO managed to raise hundreds of millions and then received the largest from Bybit. It became the largest treasury and was investing in all sorts of cornerstone, keystone infrastructure that will become important as mass adoption comes. So it was a fund initially. It acted as an investment DAO, even though it had much loftier ambitions, but in manifestation it manifested as an investment DAO.
We know who is excited about all the VCs, right? Absolutely. So we needed to make something that we are actively contributing to instead of just signing checks. Looking at the lessons we learned from the last cycle, we thought Ethereum has more or less established this dominant position, so we want to be Ethereum-aligned as much as possible. But Ethereum has its problems. All the alternative layer 1s are right in at least one thing: Ethereum has a bottleneck that prevents it from better scalability. So we were trying to do something that has the same or comparable level of security as Ethereum but really allows it to hyperscale. With blobs nowadays, you have a lot of cost savings.
a16z, one of the most recognized brands in crypto VC funding, raised $100 million from a16z alone in the last round. They didn't even need money from anyone else. They had this product called EigenDA, which is a data availability layer. When you have transactions on layer 2, the vast majority of the cost even for layer 2 Ethereum scaling solutions is when you publish data and when you retrieve data back on Ethereum layer 1, because you're still competing with all the other transactions that want to fit in the block. EigenDA does it in its own DA layer, which really allows a significant cost reduction. And because EigenDA is backed by...
You get ride-sharing like Uber and Netflix, or Grab because we're in Singapore, for liquidity and security. Mantle is also interesting in the sense that it is the first modular L2. Monolithic chains like Ethereum, especially before the merge and before the blobs, everything—execution, data availability, consensus, finality—was done in the same layer using the same block. This is good when there's not much traffic, but when there's surging activity, you see gas prices go to hundreds of dollars. Same for Solana. It's all monolithic. Whereas we actually build it in a modular way. We take the best of...
Change the code when we need to have an upgrade. Like we did yesterday, we had the Mantle V2 technical upgrade. We only need to change the parts we need to change; everything else can stay the same. For Ethereum, they've been working on the Dencun upgrade for two years and it took months of planning, months of scheduling. They need to test on multiple testnets to make sure, because a monolithic chain is like a wood block. In order to print something new, a new book, you need to carve a new wood block. You can't just smudge some words off. Whereas a modular chain is more like movable type, like the Gutenberg Bible. You can just rearrange the letters and then you can just print it. That makes it a lot more agile, able to adapt.
Another thing that Mantle excels at is because Mantle inherited the large treasury from BitDAO. I think it's more than $3 billion now. The treasury itself is more than $3 billion. It's the single largest on-chain treasury when you discount native tokens. There are some other treasuries that claim to be bigger, but 99% of that treasury is denominated in their own token. For Mantle, it has 270,000 ETH or ETH equivalents and hundreds of millions of stablecoins, making it the single largest on-chain treasury, even bigger than Ethereum itself. So of course we're going to have...
You're able to consolidate and build when the bear market comes. That is hugely important when you have a large treasury at your back. Mantle has a larger treasury than basically all the other L2s combined.
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Interviewer10:30
So you guys are rapidly gaining momentum because you have one key product.
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Igneus Terrenus10:39
Aside from the core product, which is the Mantle Network, we also have an Ethereum staking protocol called Mantle LSP. The token is METH. We've been totally abusing...
Breathing down the neck of Binance. We already leapfrogged Frax and Coinbase months ago. In the past, within the first three weeks, we already leapfrogged Coinbase staking and Rocket Pool, the second largest staking protocol, is not that far. Currently we're actually limiting the cap because Mantle liquid staking protocol is actually giving users double the market yield. The average market yield for Ethereum staking protocol is about 3.6%, and Mantle is offering about 7.2%. The level of enthusiasm is just great. People really love METH. The reason...
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Interviewer12:13
Is it purely the mechanism or are you able to generate a better yield through other ways?
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Igneus Terrenus12:20
We have 270,000 ETH in the treasury. We're actually taking our own ETH and giving the rewards from those ETH to the users. It is only something that someone who already has a large ETH holding is able to do. That is the biggest kind of gateway drug into METH. But when people actually start to use it, they really feel the UI and UX are just so smooth. It's also because...
You can actually put ETH into the beacon chain, you can withdraw afterwards. It was started after the merge and after all the kinks were ironed out. So it's a new generation, a modern design that really takes advantage of all the new technological advancements and weeding away the lessons we learned from the previous generation.
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Interviewer13:38
600,000 staked ETH, which is about $2.4 billion in total value locked. If the main way to get people addicted to Mantle is incentives, how do you...
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Igneus Terrenus14:11
First of all, you want to use some kind of incentive to lure people in, to attract people. But once they come and really like the product itself, it makes it a lot easier. You know what happened with Uber and Grab in the early days. There was fierce competition, they needed to give incentives, they subsidized the cost. Nowadays, ride-sharing in Singapore is all Grab. They're not giving those incentives anymore. We will try to give it as long as possible. The benefit of having a large treasury is...
They're really fragile. If any of the variables change, it makes it very difficult for the enterprise to make sense financially and economically. But for Mantle, we have very deep pockets. We have a large financial cushion to really allow us to make those decisions and to be less absorbed by the whims and momentary fads. We're able to build more deliberately, think in much longer terms. There was this recent meme from Dune: 'We make our plans in centuries.' Something like that.
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Interviewer16:10
In 5 years, consolidation evidently. It's for every technology.
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Igneus Terrenus16:16
I think in a way, having a lot of layer 2s... I just saw two layer 2s announced their launch or announced plans after a successful fundraising round. One is called Zero and the other is called Ten. They're even too lazy to have an interesting name; they just name them after numbers. But having all of them is actually not bad. It's a social proof that we're on the right track. This is something that has captured people's imagination and is going to be an integral part of Ethereum. As I said, layer 2s are Ethereum now.
Who is in a good position financially? Who has made good decisions to ensure that the community they have acquired sticks around even though a lot of the incentives are going to be gone? And they still have enough runway to sustain both the engineering side and the marketing and community building side. A lot of times when both share the same budget, it becomes a very difficult decision to make. You still need to retain your users, but are you just going to cut the engineering cost? Mantle has always separated those budgets. Mantle has always had the benefit of a lot of support.
EigenLayer and so on and so forth. We also repay those help handsomely. EigenDA contributed a lot of the codebase. It's about making good decisions, making sound financial judgment, and building solid partnerships. A lot of times, the greatest asset you have is not necessarily the money in the bank, but the people you come into contact with. We really view the likes of EigenLayer and Bybit with such esteem and respect and really appreciate them so much. A lot of great deployments like Uniswap Finance...
We are one of the first chains outside of Ethereum to have Ondo Finance's USDY. Mantle has a Mantle-exclusive version called mUSD. We're working with Ethena. Ethena is a stablecoin built out of futures positions on centralized exchanges. In a bull market, there's so much money to be paid to be in a short position, so they can actually give people really good returns by holding this synthetic US dollar called USDe, like 20% APY. That's completely different from how Terra Luna did it because they just gave...
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Interviewer20:11
What made you guys decide to transform BitDAO into Mantle and become an Ethereum layer 2? Is your thesis that the layer 1s would fade away and Ethereum basically consolidated as the main layer 1? Why are so many layer 1s still launching? Maybe we can put that... I mean, you mentioned before for the layer 2s, it's a good sign because it means people are very creative. But I also see, by being not too naive...
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Igneus Terrenus21:10
I interview a lot of them. I won't say all of them are going to fade away. They need to find a niche to occupy. It doesn't matter that you don't become the dominant smart contract platform. The internet is so great, the world is so big, that if you just occupy a very small niche and have very passionate users, it's actually enough. But in terms of being the sort of commonwealth of the internet computer, we really do not see anyone challenging Ethereum's supremacy. At least as we project, we just extend the current trajectory out to the next bull cycle. We still think Ethereum is going to...
Catering to a slightly different audience. People are going to try new things. One thing about human endeavor, or really any endeavor, even the endeavor of evolution, is that it throws all possible ways at it. When you look at cells, there are so many interesting choices made. Everything living on Earth at this moment shares a common ancestor all the way back. We share a common ancestor with the lunch we ate, because the only thing we eat that has never been alive is salt. Everything else has been alive at some point. And how many...
98.2% of our DNA with a gorilla. People like to talk about how different cultures are, when all that difference and all the things we are able to achieve—the monuments, the cathedrals, sending a man to the moon, creating blockchain—is just in that 1.8%. I should never be too quick to judge other people's choices. They are just throwing different solutions at the problem and seeing what sticks. Having more projects launching is actually a positive sign of people seeing opportunity in the space. Their enthusiasm will bring more people in, because there's nothing so magnetic as...
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Interviewer24:10
It's actually kind of booming right now, especially because of the meme coin mania. You said with these upgrades, layer 2s are actually cheaper than Solana. But cost is not everything. I'm going to challenge the layer 2s a bit, because that's my job. I understand crypto, I've been in crypto probably six to seven years, but I'm not a very technical person. I'm kind of lazy. I see some people writing things on Twitter that make sense to me and that I want you to...
Going to ETH is like when I first got used to ETH and then had to go back to Bitcoin. Going back to BTC, the slowness and fees feels like you're moving gold. With ETH, it's just annoying. Many such cases. What's your honest take on that? Obviously there is good and bad everywhere. Maybe you can give us both aspects.
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Igneus Terrenus25:38
I think those considerations are very valid. But I think also because the industry is still so new, people are comparing Ethereum, Bitcoin, and Solana. In 20 years time, if all three are still thriving, they will be doing very different things. It's because we are at such...
An elephant or a whale, even though they're all mammals, it will be the same. With enough time, you're already seeing a divergence between the audience for Bitcoin, Ethereum, and Solana. Of course, there are people who use them all and people who use them for different purposes. As time progresses, as more choices are made, you will see those divergences become even greater. As of this bull run, especially since the start of the year, Solana has really captured people's imagination with its great meme coin culture. Ethereum tends to have more whales. Whales are not going to be chasing every meme coin.
Less capital to start will interact with Ethereum. A few months down the road, their transactions will be eventually included in a blob on Ethereum. But how they deal with it, especially with the help of account abstraction and the abstraction of multiple chains, they will just look at it like a Coinbase user. They will just look at, 'Oh, I can get something from Ethereum ERC, but Base chain is the cheapest and fastest solution, I'll just use Base.' But ideally, these people don't even have to make that choice. It's made for them because there's another layer on top that's making the best decision for them.
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Interviewer28:10
I'd rather pay the fees than deal with the brain damage of understanding the liquidity fragmentation landscape and bridging. To be very honest, at some point there are so many layer 2s doing different things. To bridge, you use your MetaMask, it's not that complicated to click a button. A year or two ago it was more complicated to add Arbitrum or Polygon. Now you just click a button, you go on a dApp and say switch network. But you still need to do all that stuff, and you need to fund your wallet with the right coin to pay the transaction fees. This is a problem.
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Igneus Terrenus28:46
This is a problem, and this is a completely valid criticism. It shouldn't be on the users to figure that out. The user experience should be made for them that is better. The re...
Abstraction. A lot of people are working on that with what they call smart wallets. You don't need to have all that technical know-how, understanding the difference between multiple chains. The user interface should just give you the best choice given the time and the decision you're trying to make. One thing that's truly a great investment thesis as well is that Mantle has its Eco Fund, which is catalyzed capital of $200 million. It's investing in a lot of great projects. It's already completed its first run of $10 million, asking for the second capital of $30 million now. One of the things it is investing in is intent-based protocols. What it does is that it...
The status of various blockchains, find the best route. It's like using a travel agent or AI to figure out the optimal route. There's this famous mathematical problem from the 17th century in the city of Königsberg, which is now in the Russian enclave surrounded by the Baltic countries and Poland. It was also the birthplace of Immanuel Kant. There are famously seven bridges in the city, and mathematicians were trying to figure out if there's a way to cross all seven bridges without repeating your path. It remained unsolved for hundreds of years. Then Google came along, used machine learning, and they decided it's impossible not to trace back. So in a way...
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Interviewer31:15
Incidentally, so to that kind of comment, you're not going to say 'I don't really care.' You're going to say it's valid, but it doesn't really matter because the current state of technology advancement and progress in crypto regarding these layer 2s and even layer 1s is that there's a layer on top that should make the decision for which one is being used for the user. But it's not there yet. Therefore it's completely valid, but then it poses a challenge for the layer 2s.
Currently this layer on top is not really there. But if you want to survive, obviously you have a big treasury, but you want adoption. You still need to have the users. Probably the METH one is really smart. How do I get people addicted to my platform and have more TVL? It's almost like everything in life. There's the main... Let's think about someone who works in a corporation with a lot of politics. It's the same: do I think about the big vision of the company or do I think about myself and make the best decision short term that will lead me to my goal long term? But I need to take all these other things into account which are not optimal for long term but that are the case. So probably one of the key challenges for...
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Igneus Terrenus33:10
User experience. They don't want to use it. I think it's just a momentary thing. Even the CEO of IBM in the 40s said the market for personal computers in the world is like four. He was just looking at the moment. Nowadays, with the hindsight of 80 years of advancements, everyone has a personal computer in their phone. Those challenges will eventually be overcome. People will be using all those layer 2s. They will be interacting with Ethereum primarily through layer 2, but they wouldn't even need to notice that. But when you talk about brand building, it's great to have a recognized brand, but you don't need to be a recognized brand to be successful.
Even to talk about fashion brands, I don't even remember the name, but something like Luxottica. They actually produce sunglasses for almost everyone, including Ray-Ban, Chanel, all those. It's produced by the same company, but you barely heard the name. They are now working on smart glasses. They already had a partnership with Ray-Ban and Meta with the Meta smart glasses, and they are now working on hearing aids. One of the problems with hearing aids is that it's so obvious, so it comes with a lot of stigma. People don't want to use it. But with new sunglasses, you wouldn't know they're wearing it. That's a great way to...
Register in their mind the Mantle brand. What we think is that we are building a technology platform on which you can build the killer apps. For example, account abstraction, ultimate routing, intent-based routing. It doesn't need to be built by us, but we will work with dApps trying to build that. Mantle is one of the best when it comes to enticing, encouraging, and supporting dApps. When you talk to different ecosystem partners, they always say Mantle gives them the best support. The Mantle BD team, the Mantle...
Ecosystem fund is denominated in stablecoins, unlike most other ecosystem funds which are in their own coin. So when we give money to others, there's no price pressure on Mantle's own coin. We really believe that we don't have to find a solution for everything. We just need to create a great incubator working environment for the brilliant minds who will come up with those solutions by building their dApps, to entice them into Mantle and then to build it out.
If we're able to build all that and then people forget about Mantle altogether, but people...
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Interviewer37:11
These dApps, obviously every layer 1, every layer 2 needs a lot of applications. That's what you derive your value from. These dApps come solving some specific issues. They work or they don't. There's also another specific kind of project, not really applications, and obviously I'm referring here to meme coins. The reason why Solana is basically so successful is meme coins. If I talk about the meme coin thing, it's really interesting. In the beginning in crypto, you think it's dumb, but the more you...
Meme coins are the ones in the middle that don't understand think it's dumb. If you talk to the people on the right curve, the big brains, one of the things they say is: 'I think meme coins are really interesting and I like them for one reason: they don't promise anything.' That is true, which is a lot of the problem of a lot of crypto projects. When you have these cycles and people want to surf the wave, they promise a lot of things and talk about narratives that they're not necessarily even in. So what's your big brain take on meme coins?
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Igneus Terrenus38:49
I wouldn't call myself a big brain, but I think meme coins are definitely something that no one should just think is stupid.
In a way, it has the best technology. It's a technology called 'prices go up.' It captures people's minds more than rollups or L2. The greatest mind-concentrating technology of blockchain is called 'prices go up.' When you think about it, any technology needs that option for it to really go parabolic. We live in a society. Coming back to what gives anything value: it's because humans value it. Why does anything have value? Because humans value it. If humans weren't here, if there's not another species that comes up with society, nothing is going to have value. The whole thing about supply and demand is only because humans decided we're going to...
Transmutable, virally transmutable. It has the other compelling case: price go up. It's a great way of putting that in front of people's minds. Those people who come, just as most people came to our space in the first place for speculation. I was about to say that Bitcoin price, when it goes up like crazy in 2013 or 2017, that's what attracts people to the space.
With a few autistic spectrum people aside—I have huge respect for those people—99.99% of people came to this space, the first thing is speculation. Then when they look around, they find...
That meme coins are able to capture people's imagination and bring them in. It's actually great because then a portion of those people will stay for the technology. I would even say maybe technology is third. You have 'price go up' first, best technology second, and the actual memes third. Meme coins: you came for price go up, okay I got wrecked, fine, but I stayed for the memes because I have so much fun. If you think about it, METH is exactly that. You have your rate that's higher, but how do you capture people's attention in the beginning? 'Hey, let's do something about working bad.' METH and you have...
Now you put both of them together and you get these meme coins. If you understand that, you realize it's pretty amazing. There are still a lot of people who are very smart in crypto who are kind of mid-curving memes or are starting to say, 'Okay, maybe I'll dodge.' But now you have a lot of different flavors. When you're deep in the meme rabbit hole—I'm not talking about the meme coins on Solana, I'm talking about a few meme coins that have a certain market cap, maybe in the billions—you actually start to realize it makes sense. You also start to realize, if you want to be very honest...
People actually gamble, but it's much more fun. I studied psychology in university. I actually evaluated why people gamble. It's not necessarily that they always want to win. Sometimes the adrenaline itself is what they're after. When you ask them, they say they're chasing the big win, but at the end of the day, a lot of them playing the slot machine just want that rush of excitement. Even for meme coins, it's not just gambling. It's storytelling and finding a community. It sounds like a cliché, but when...
We tell stories at the end of the day. When it's dark, we need the human need of warmth and community. Meme coins are the best way to feel invited. Otherwise, it's 'my campfire' and 'other people's campfire.' Meme coins are so welcoming. It's like 'come to our campfire, we'll tell some silly stories.' You don't need to have any prior knowledge, you don't need to have any skills, you don't need to belong to this group. As long as you decide, 'Oh, this campfire, I want to belong to this group,' it's just a very welcoming thing. A lot of people just want to find the group they belong to. This is the innate human need to find belonging and to find their community. Then, of course, if they...
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Interviewer45:11
Chastise meme coins as 'Tom.' I love that. We have a section in this podcast where we talk about the guest's favorite projects and teams. You have a few projects you're really bullish on. We talked about two already: EigenLayer and Ethena. We'll go through them separately again. But because we're talking about meme coins, I know there is a meme coin that just launched recently: BOME. Are you talking about BOME? I was talking about no, on Mantle: Puff. Let's talk about BOME first, then talk about Puff the Dragon on Mantle.
100 coins. By the time we finish our recording, if we looked at CoinGecko, maybe it's already winning 100x. How do you explain that?
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Igneus Terrenus46:21
You can't explain it. It's just the power of... Of course, because it came after sort of WIF and all that, people are already primed to think that if this is the first meme coin in this season, they wouldn't be so successful so fast. But it definitely pays to be on the right trend, having the momentum. A lot of times, meme coins are actually launched by very smart people. That segues to Puff the Dragon.
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Interviewer46:52
What about Puff the Dragon? First meme coin on Mantle.
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Igneus Terrenus47:10
It's so great. It takes math and the UI/UX is just great. When you look at it, you just know a lot of work and heart was put into it. Our own esteemed colleague, Chief Alchemist Jordi Alexander, is involved in his personal capacity. It's a completely community-run meme coin. But when you look at the level of attention, the level of PR preparation and thought deliberation put into it, it's almost like a work of art. They have a lot of interesting...
Next chapters they have planned. It just can't help but be super bullish about it. Coming back to what I said a while ago, there's nothing as infectious, magnetic, and dedicated as passionate people at work.
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Interviewer48:27
Do you think that's the most important thing for a meme coin to be successful? If you look at WIF, it's a cute dog with a hat. That's one of the... Obviously then you have some mega influencers. I even chipped in for the Las Vegas Sphere because I'm also a holder. I was like, 'Man, this makes so much sense. It's going to be fun to have the freaking dog with the hat on the Sphere.'
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Igneus Terrenus49:13
Tangent. If you go to European museums, you see those medieval paintings of babies that are so ugly. Do you know why? Most of them are actually depicting Jesus, and they're trying to depict Jesus as fully formed, complete. Medieval paintings are not for aesthetics; they're for storytelling. Back then, most people were illiterate, so all the art was made for churches to tell the story and teach morals. A baby like this is a long way of saying it doesn't have to come out fully formed. We love Renaissance babies who are killed. It may have started as a silly idea, 'Oh, it's a dog with a hat, it's cool.' But the success it has had since...
Important. But I think any success involves a lot of hard work, grit, and stick-to-itiveness. For something that is more than a flash in the pan, a success that will sustain, you basically see this curve: silly inventiveness starts to diminish in its importance, and grit and stick-to-itiveness grow in importance throughout the times.
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Interviewer50:44
There are these two other protocols that we talked about before, but let's go one by one. Imagine you're talking to your mother. What is EigenLayer?
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Igneus Terrenus51:13
Liquidity and security. It's like Uber for ride-sharing for mobility. One of the biggest initial challenges for a lot of project owners and founders is that when they try to build something new, they need to bootstrap liquidity and security, and they don't have that. What EigenLayer allows is like the joke: 'New economy: Uber has no cars, Airbnb has no rooms.' A lot of those founders have a brilliant idea but don't have the entire...
Restake on your protocol and then supply you with the security and liquidity. The way Ethereum is already built gives you access to the greatest liquidity and security of any smart contract platform in the world. Why is this so important for the space and why was this not invented before? The second question is, I don't even know. A lot of times, when you have something of this caliber, you just think, 'Oh, this is such a simple idea.' But a lot of it is that people can have ideas, but execution and grit and stick-to-itiveness matter. Why is this so powerful? Because now you...
Someone building a new layer 1 needs to figure out how not to get 51% attacked. Nowadays, you can just build on a layer and even if you don't have any startup capital, you can do it. You're going to be as secure as Ethereum. It's essentially the same way the internet evolved. Everything became much easier, and you started to have platforms that enable you. It's less a problem of security. The cloud, for example, you have a few companies running the cloud, and you don't really have to worry too much about security. I can build my own stuff and rent cloud from out there.
It basically abstracts away two of the greatest blocks, like writer's block or starter's block, and allows the project developer to focus on the problem they're trying to solve instead of the problems they need to address before they can solve it.
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Interviewer54:33
You're also hyper bullish on Ethena. I don't think you're the only one. What is Ethena if you had to explain it to your mother, and why are you and pretty much your entire space so excited about what Ethena is building?
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Igneus Terrenus54:50
It's a synthetic dollar built with...
The vast majority of people in the crypto space still use centralized exchanges. Centralized exchanges are far more powerful. We love all the innovation in decentralized space, but we cannot admit that centralized exchanges have the lion's share of liquidity. 90% of liquidity that goes through the space goes through centralized exchanges. There's money to be made there. Some of the biggest players in the space, market makers and investors, make money by market making on centralized exchanges, earning a funding rate. Especially for futures, for perpetual contracts, in order to have the price anchored to the spot price...
A lot of people love leverage. You can make much more if you're right, obviously you can lose much more if you're wrong. If the price of Bitcoin goes up, or any altcoin that has perpetuals, people will anticipate it's going to go up more on average. Therefore they're going to long more. But at some point, because long and short is a market in itself, you need to have a mechanism that incentivizes not everyone to long. That's the funding fee. To make it very simple, that's the funding fee. But obviously a lot of traders or retail traders don't necessarily know that.
I just want to pocket the difference on the funding fees. During a bull market, everyone is long. Most people are very long, therefore funding fees are very high and pay the people who short very well. That's the mechanism underlying Ethena's stablecoin. They're able to give people almost 20% APY by holding their synthetic dollar USDe, while making millions every day.
That also tells you how much centralized exchanges actually make. They're able to afford sponsorships like Red Bull. The amount of money centralized exchanges make is...
People know about the potential, but I think a lot of people still don't understand how crazy the money is in those specific verticals. For a lot of other people in crypto, it's much harder to make money. If you think about the best ways to make money in crypto today: market making, exchanges. Then you have these projects that are sitting on a huge treasury and generate yield from that treasury.
In crypto, the capital is huge. The Nobel Prize, after more than 200 years, is still giving prize money of a million dollars for a win in chemistry, just from the inventor's savings from all those years ago. They're not touching the principal; they're just giving the interest. In this sense, Ethena is doing something similar to what Mantle does. We are just taking the interest we are earning to fund development. Ethena is building something that is truly groundbreaking. The product itself is, but the concept behind it is not necessarily new. It's just that we have a lot of money to throw around, and the money that grows from that large capital is...
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Interviewer1:10:10
As compared to the price, we are looking at Bitcoin at least doubling, if not even higher, 2x or 3x of its current price. Very excited about the bull run that we are already in. Absolutely amazing. Thank you so much for doing this. That was a helpful conversation.
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Igneus Terrenus1:10:27
Proud to be here. Thank you for having me.