Ishan Pandey: Hi Kenny, welcome to our series “Behind the Startup.” Please tell us about yourself and the story behind Manta Network?
Kenny Li: Hi Ishan! It is a pleasure to be here. I’m Kenny, one of three co-founders of Manta Network, a protocol built for Web3 on-chain privacy. We’re building in the Polkadot ecosystem to start, and have a decentralized team of approximately twenty people around the world. I am a serial entrepreneur with a decade of experience in scaling startups. I started mining Bitcoin in 2013 and worked on crypto projects.
I received my MBA from MIT Sloan and was a teaching assistant for several blockchain courses. I met Shumo Chu and Victor Ji, the other co-founders of the project while doing my MBA. Victor was studying for his Masters in Economics at the time at Harvard, and Shumo was working on building out the smart-contracts layer for Algorand.
Ishan Pandey: Can you tell us a little bit about the protocol and elaborate on what exactly is a polkadot parachain?
Kenny Li: The core issue that we see today is that the blockchain lacks privacy, interoperability, and usability, which leads to a slew of additional problems. That’s why we’re developing Manta Network, a DeFi stack interoperable and private protocol with a privacy-preserving decentralized exchange as its first use case. We’re designing it as a layer-1 solution that implies that privacy will be built into the fundamental architecture rather than adding another blockchain. We make use of Polkadot’s interoperable ecosystem by utilizing Substrate.
Based on the Substrate framework, Manta is a suite of easy-to-use and safe open source and fully transparent code based protocols. It uses zk-SNARK to enable total end-to-end anonymity, high throughput, and great interoperability between chains. It supports Polkadot and its parachain mainstream cryptocurrencies and stable coins. Eventually, it will contain a decentralized privacy payment system, a decentralized privacy token exchange protocol, and a decentralized privacy loan and synthetic asset protocol. Many US cryptocurrency veterans, academics, and researchers make up Manta’s founding team, having past experience at Harvard, MIT, Algorand, and other organizations.
Manta’s main premise is to issue private coins/tokens at a 1:1 minting value ratio with stable currencies and other base tokens on the contract. Besides that, the trade of these privacy tokens would be supported via a decentralized private swap platform.
The zk-SNARK technology is used in the Decentralized Anonymous Payment (DAP) system. Users can exchange Polkadot and Parachain tokens to match private tokens, pay with privacy tokens, and redeem base currencies.
AMM and zk-SNARK are the foundations of the Decentralized Anonymous Exchange (DAX) system, which we call MantaSwap. On the platform, users will anonymously exchange tokens. The decentralized private token exchange system uses the same price creation approach as the mainstream AMM. Manta token economics strategy is based on the rebate and redemption of swap use and transaction fees. Manta Network is also in the early stages of designing the ZKVM, a turing-complete environment for decentralized app development with the underlying zero-knowledge proofs technology to provide privacy as a base layer.
Ishan Pandey: What makes Manta Network different from the other market privacy projects?
Kenny Li: I think there are many things that set us apart based on technology and our vision. First and foremost, we are building privacy as a utility for Web3. What this means is that we want to essentially be the utility provider of privacy for blockchain. Think about it like this–when you turn on your faucet, water comes out. But you don’t have to think about where your water comes from or the details about its shipping logistics. All you do is turn a nob when you need water, and water arrives. We want to do the same with Manta Network; as a utility, people don’t even have to be aware that they’re using Manta Network, all they need to do is toggle on privacy and it’s there.
With this approach, our goal isn’t to design our own privacy token; in fact, our token is just a public token like most other cryptocurrencies. Instead, we are focused in designing the technology around privatizing other cryptocurrencies. This means that we can privatize assets like Polkadot, Bitcoin, and Manta. By using Manta Network, any token can become a privacy token–that’s the goal.
Taking a utility approach, we also believe privacy is a fundamental human right, not a luxury. By creating this as a layer-one network, we are able to also manage the costs of the network, which will ultimately mean more inclusion into privacy activities, transforming privacy from a luxury into the vision of the fundamental human right that we strive to achieve.
Ishan Pandey: Parachains are an integral feature of the Polkadot vision and framework. What are Parachain auctions and how do they work?
Kenny Li: If a layer-one project (such as Manta Network) building on the Substrate framework wants to leverage the cross-chain communication and security of the Polkadot ecosystem, that project must secure a parachain. A parachain allows the network to launch and connect directly with other parachain projects, building on the Substrate framework. On Polkadot, a parachain slot is a restricted resource, and only a few will be accessible. just a few slots become available every few months.
To obtain a parachain slot, projects must bid for one in an auction. To gather the funds (in DOT on Polkadot or KSM on Kusama), projects crowdfund from the community. DOT or KSM holders can bond their cryptocurrency to support the project they feel should obtain a parachain slot during a parachain auction. The project may promise to provide supporters with airdrop tokens (or other benefits) in exchange. To randomize the exact instant an auction’s winner is selected, parachain auctions employ a method known as a candle auction.
It’s worth emphasizing that, because the protocols are permissionless, any project can buy a parachain slot on the secondary market from anybody who won one in an auction.
Ishan Pandey: What is Manta community’s goal behind coming up with the Squid Game? Can you give us a detailed description of the event?
Kenny Li: Manta Network had raised $28.8 million in funding after selling 80 million $MANTA utility tokens during Tokensoft’s Squad Game token generation event. The idea was built around a deflationary utility token burnt through network usage, providing holders with on-chain community governance rights and incentives for MantaPay and MantaSwap usage fees.
The token sale, which represented 8% of the 1 billion fixed supply of $MANTA tokens, drew a large number of participants from the Manta community, assisting the project in moving forward as Polkadot parachain auctions begin.
Squad Game was a community-only, invite-only event that took place in two rounds. All-round participants were notified via email and must complete KYC in order to participate. The registration and KYC processing window commenced on October 19 and ran through November 9. The purpose of the Squad Game was to recognize and thank Manta community members for their continued support in the past, present, and future of the Manta project. As a result, Squad Game is meant to increase the number of Manta token holders by allowing as many community members to participate as possible.
Ishan Pandey: What new trends do you see in the blockchain industry?
Kenny Li: Not to sound biased, but I think the biggest emerging trend in the blockchain industry is one of privacy. Privacy in Web3 is a problem that only grows larger, it doesn’t go away without a solution. That is because all of transactions on-chain are both immutable and public. Anyone can see every transaction that is made, every interaction that you have on every decentralized application. Whether it’s a transaction that happened 5 minutes ago or 5 years ago, it is still viewable, traceable, and can be linked by to your wallet address, which can be linked to your personal identity. The conversation around personal privacy is no longer about how centralized organizations like Facebook or Google own all of your data; instead, anyone with an internet connection now has access to all of your data.
Based on the sentiment we see in the space, we noticed that the conversation around privacy is really becoming more focused and elevated. From here, I think it’s our responsibility as a community to make sure that privacy is a critical piece for Web3 development moving forward. It’s an imperative fundamental human right.
Disclaimer: The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence, asking the right questions, and equipping readers with better opinions to make informed decisions.