Things are looking up for the Ethereum Layer 2 (L2) network, Mantle, as its native utility token MNT has surged to a five-month high of $0.93. This represents a 23% increase in the past week, and if we were to cast the net wider to a 30-day timeline, we’d see an impressive 63.6% gain. Over the past year, the token has risen by more than 55% and now boasts a weighty market cap of $3.13 billion. This impressive growth makes Mantle the largest L2 by market cap, according to CoinGecko, a popular crypto market data provider.
What’s driving Mantle’s success?
Many experts believe the recent surge in Mantle’s value can be attributed to increasing network activity and anticipation around UR, a new app built on the Mantle platform. UR is set to exit its beta phase on August 8, and represents Mantle’s first major effort to cater to everyday users by combining Swiss bank accounts and Mastercard debit cards with crypto self-custody features.
Mike Marshall, Head of Research at Amberdata, a well-known blockchain and crypto analytics firm, agrees that the impending deadline for the beta phase of UR likely fuelled investor interest. He of the opinion that it created a sense of urgency among them and they chose to invest before the product launch. This urgency has been amplified by the rapid institutional adoption of Layer 2, according to Marshall.
Promising growth in network activity
Marshall highlighted the significant growth in network activity in the past month. Mantle’s daily users skyrocketed from 7,000 to 137,000- a robust increase of 1,600%, while trading volume shot up by 450%. Furthermore, the broader L2 sector is gaining significant traction, up around 7% on the day as a category, making it the third-best-performing category on CoinGecko, a credible platform for blockchain and cryptocurrencies.
Callum Clark, co-founder of Alvara, a blockchain development company, agrees that the buzzing market conditions and the launch of UR likely charged MNT’s surging value. The combination of the first consumer-facing product launch from Mantle and renewed interest in Layer 2 technology have propelled their token to new heights.
Mantle’s long-term commitment to Ethereum (ETH)
Danny Nelson, a research analyst at Bitwise, a cryptocurrency index fund, said that Mantle’s long-term Ethereum holdings are another key factor behind its growing popularity among investors. Nelson pointed out that public companies are increasingly establishing strategic crypto reserves. In the case of Mantle, this has been reversed. As a Web3 company, Mantle has pioneered this practice for years and currently holds around $388 million in ETH. Nelson explained that Mantle’s strategic Ethereum reserve was recognized last week, lending more credibility to the company.
According to Nelson, this isn’t signaling a sudden mission change for the Layer 2 chain. Instead, it’s a refocusing on how Mantle leverages its ETH holdings. Today, the company is keen to remind the market that its investment in Ethereum is not only substantial, but also long-term and purposeful. With this, Mantle is setting a new context for how the market sees MNT.
