Our world today is by and large a digital one – an unforgiving world where we are nearly required to have digital identities for goods, services, and lifestyle needs. Cryptocurrency has traditionally taken the position that our privacy should be respected and even demanded if necessary. Privacy is paramount for not just our protection, but also because it should be deemed a human right.
Crypto was generally founded on two philosophical principles, that 1) we do not need a third party to do financial business concerns, and 2) we can do these financial concerns privately. Today, this can be achieved by setting up DeFi wallets, connecting to DEX exchanges, and money market accounts with projects like AAVE. Despite the ability to do all these things – which is revolutionary – there are elements that need to be addressed for the future. These future concerns are issues like usability, interoperability, and true privacy. For usability, basic user experiences like copying and pasting addresses are archaic and clunky. Interoperability is a key issue for “DeFi 2.0” and part of what chains like Polkadot and Substrate are trying to solve. The third issue, privacy, is the hardest to maintain. If interoperability exists and many chains are communicating with each other, it only takes one chain or application to break the privacy fence for all parties involved.
The weakest link in privacy is mainly found in exchanges. In both centralized (CEX) and decentralized (DEX) exchanges, privacy concerns are everywhere. From front running trades to data mining trading activity, exchanges can easily contaminate your anonymous presence and reveal your identity for thieves to exploit. From a decentralized standpoint, privacy-preservation is lacking further with immutable, on-chain records of transactions. In other words, an answer to this problem would require a layer-1 solution.
Manta Basics Explained
Focused as a solution for decentralized privacy, the Manta Network is a layer one Substrate protocol. Manta supports Polkadot and parachain assets. The foundation of Manta is that decentralized finance (DeFi) has not only been achieved but also proven to be tremendously valuable and thus needs privacy protection. If we lose privacy in DeFI, it will fundamentally change its value.
Some issues today that Manta intends to solve are simple – DeFi has too many vulnerabilities for transparent addresses, limitations on scalability, liquidity issues that can make whales more transparent, and the ability to trace information is easier than you might think. At best, DeFi is pseudonymous.
Manta is able to do this by offering a package of key features that are open source and auditable by third parties.
- Non-interactive Zero-Knowledge Proofs: a feature that’s quite a mouthful but represents something revolutionary to the crypto world. Also called zk-SNARK (which is an acronym for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge), this feature is a protocol that does not require interaction between one party to another (known as the prover and the verifier). This method uses Zero-Knowledge Proofs, which basically means that one party needs to offer proof that another party has what they need within their possession. The non-interactive model shows that a user doesn’t even need to be asked for such a possession, eliminating the need for personal targeting and thus an extreme level of privacy.
- Cross-Chain Interoperability: the Manta Network is able to run as a layer one protocol, meaning it operates horizontally to other chains as opposed to working as a stack like layer two blockchains. This enables Manta to work more proficiently and as intended – it can scale performance without bottlenecks from proof-of-work consensus methodologies or gas fees.
- Privacy Suite: every element to the Manta Network has privacy as its foundational feature. Manta uses a decentralized privacy payment protocol, privacy token protocols, privacy lending, and a privacy-focused synthetic asset system. This ensures that Manta can be used as a suite of features with privacy by default.
As a privacy-preserving DeFi stack, Manta Network offers two initial products: a DeFi anonymous payment protocol (called DAP) and a private token exchange protocol (called DAX). The payment protocol uses zk-SNARK to interact with other chains in order to maintain privacy. In essence, this works much like its own token swap to intentionally misinterpret the origin of the wallet being used, making use of the DEX that’s connected doesn’t take advantage of identifiable information. The DAX uses a hybrid of zk-SNARK and an Automated Market Maker (AMM) model to build a private and algorithmically operating exchange.
It’s important to know that Manta Network is a layer one solution and not a second layer application. This makes the network have an extreme advantage as it avoids bottlenecks of other layer one chains and as such can be fully decentralized and tweaked as Manta sees fit in order for privacy to flourish. This also can make it more resilient on the front-end which makes it easier for users to take advantage of the privacy features and removes any extra steps where a user’s privacy can be compromised. Last but not least, this makes it easier to integrate with DeFi and other DeFi protocols.
The MANTA Token
The Manta Network also uses a token called MANTA to help offer utility to the system. This token is a deflationary asset that allows users to take advantage of privacy protection on the network but also can be used for rewards and redemptions on the network. The MANTA token can be used for discount, redemption, governance, and extended values for participation on the Manta network. This can be done by using the MANTA token as a main source of utility for fees collected, for redeeming standard coins for its privacy counterparts, and as an exchange fee.
Conclusion, Upcoming News, Resources
Manta Network provides a real solution with privacy in DeFi. Through all the excitement of making projects and building decentralized finance, it’s easy to take privacy for granted or let it slip due to revolutionary changes. Manta is able to help maintain privacy to keep users secure and at ease. Building on Substrate as a layer one keeps the network more secure and manageable as a privacy-first blockchain that can build on top of DeFi. In addition to Manta having a full suite of privacy features, they have also teamed up with Equilibrium, a cross-chain money market project that combines lending pools with synthetic asset generation. Tidal Finance, a blockchain based insurance marketplace, has also joined forces to provide support for users.
Manta Network is focusing on privacy – something that will define the DeFi space in the next few years. Privacy is something we can’t take back on the Internet when it’s gone.
Privacy must be preserved.