This proposal is co-authored by Cateatpeanut and the Mantle Network team.

Context

BIP-21 has approved the brand and token merger, with pre-authorization for a token conversion plan. It is recommended to hold a formal discussion and vote on key issues concerning the token conversion plan.

Proposal

By voting “Yes”, you endorse the following terms:

1. The Mantle token, $MNT, shall incorporate functions analogous to the “Upgradability” and “Mint” functions of the $ARB and $OP tokens.

2. The one-way token conversion ratio shall be set at 1 $BIT token to 1 $MNT token.

3. The Mantle core contributor team shall be authorized to determine the optimal timing and sequence for the delisting of $BIT tokens, listing of $MNT tokens, opening of conversion channels, and the Mantle Network Mainnet.

4. A DEX liquidity pool for $MNT-ETH may be created, utilizing the proceeds from the deconstructed $BIT-ETH pool, and with reference to the intent of BIP-10.

5. A temporary conversion treasury may be established to provide support for the token creation and conversion process.

Supporting Information

Disclaimer: Please note that the following supporting information provides additional context and aspects related to the token plan. While it is not an official component of the proposal, any modifications must conform to the proposal’s terms.

Token Ticker Symbol

• The token ticker symbol $MNT has been chosen due to its distinguishability and availability across major exchanges and aggregators.

Token Functionality

Key design recommendations include:

• Upgradability: the L1 $MNT token will be upgradable using the OpenZeppelin Transparent UpgradableProxy contract, which is also used by the $ARB, $AAVE, and many other reputable protocol’s tokens. This enables the Owner (Mantle Governance) to maintain the $MNT token functionality to support future product and governance use cases, reducing the need for a future token migration.

• Mint: the Mint function allows Mantle Governance to authorize potential future inflation of the $MNT token to support long-term ecosystem development. The $MNT token will be minted on L1.

  • The recommendation is for $MNT to permit Mint once per year with a default setting of 0%. While we see the benefits of this functionality, we do not yet have foreseeable needs for future inflation.

  • This also allows the Mantle community to propose burning Treasury $MNT without as much concern for multi-decade future requirements.

  • As a reference, other L2 tokens such as $ARB permit Mint of up to 2% of token total supply once per year upon governance approval.

• No Special Supply Synchronization Between $MNT on L1 and L2: $ARB and $OP can be minted on both L1 and L2, and require a “bridgemintburn” token function to synchronize total supply. The Mantle R&D team’s recommended approach is a more simplified version where the $MNT token can only be minted on L1. The $MNT token minted on L1 can be bridged to L2 via the canonical bridge without the need for additional supply synchronization.

For more technical details and to provide feedback, please see the following document which will be updated by the Mantle R&D team from time to time: https://hackmd.io/@-KOCYYc7QJeaaCqGkwHGhw/Bkv1lVfEh

Sequence of Delistings, Listings, Conversion Channels, and Mainnet

• The main goal is to ensure a successful launch of the Mantle Network, engagement for the Mantle ecosystem, and smooth transition for the $MNT token.

• Delisting of $BIT tokens and subsequent listing of $MNT tokens on DEX and CEX platforms may have a time gap due to various listing requirements and technical considerations.

• The Mantle Network Mainnet requires $MNT price feeds.

• Potentially controversial decisions will be subject to discussion and consultation with the community through official channels.

Protocol Owned Liquidity

• The $BIT-ETH pool, as referenced in BIP-10, will be deconstructed and replaced with the $MNT-ETH pool on Uniswap v3.

• ETH proceeds resulting from the deconstruction process will be gradually utilized for the construction of the $MNT-ETH pool.

• Any excess $MNT, $BIT, $ETH will be returned to the appropriate Treasury.

• The asset flows will be periodically updated on the Treasury Monitor.

Temporary Conversion Treasury (TCT)

• A TCT may be established to support the token creation and conversion process.

• The TCT will receive all initially created $MNT.

• The TCT will swap $BIT for $MNT with significant holders such as the previous BitDAO Treasury (now Mantle Treasury), and Mantle Network budget multisig.

• The TCT will send $MNT to conversion channels, including a L1 conversion smart contract “L1CSC”, and centralized exchanges who have been approved to support the conversion.

• Please note that the TCT itself does not function as an official conversion channel, and users are strongly advised not to send $BIT to the TCT. Instead, they should rely on the L1CSC frontend to be hosted on mantle.xyz or officially participating centralized exchanges.

• The TCT will receive $BIT before 1x $MNT, reducing escrow risk, with the exception of the L1CSC.

• The final ratio of “total received $BIT units” versus “total sent $MNT units” by the TCT will be 1:1.

• $BIT held in the TCT will be burned, and the TCT will be decommissioned after the completion of conversions.

• The asset flows will be periodically updated on the Treasury Monitor.

Next Steps and Expected Timing

The following actions will be carried out concurrently, all of which need to be completed before the $BIT to $MNT conversion channels can become operational:

• Assessment and incorporation of any feedback into $MNT token functions and the conversion plan.

• Approval of this proposal, with a minimum 7-day discussion and 7-day voting period.

• Conducting an audit of the $MNT token, and the audit report is made available to the community.

• Deployment of the $MNT token on L1, with initial supply under the custody of the TCT.

• Conducting an audit and testing of the L1 Conversion Smart Contract.

• Securing support from select centralized exchanges for the $BIT to $MNT conversion.

• Implementation of the $MNT token on Mantle Network testnet and mainnet.* $BIT held in the TCT will be burned, and the TCT will be decommissioned after the completion of conversions.

• The asset flows will be periodically updated on the Treasury Monitor.