What is Mantra blockchain? OM tokenomics explained

Have you ever wondered about the importance of regulations in crypto? How can we combine the speed and low cost of Decentralized Finance with the safety and compliance of Traditional Finance? This is where Mantra comes into play!

Mantra is a “Security First” Real World Assets-based Layer-1 blockchain built on the Cosmos network.

At its core, Mantra aims to be a fully regulated DeFi platform that brings the speed and transparency of DeFi to the world of traditional finance.

Capable of both adherence and enforcement of real-world regulatory requirements, Mantra is designed for those who value the importance and safety of regulatory compliance at all times.

Built for institutions and developers alike, MANTRA offers a ‘Permissionless Blockchain for Permissioned Applications’.

But, what exactly does all that mean? Today we find out!

What is Mantra?

Mantra was founded by John Patrick Mullin in 2020, who serves as their CEO.

John is also the CEO of another DeFi project known as SOMA finance.

Mantra was created to fill a gap it sees in the Cosmos ecosystem, which is a blockchain specifically designed to provide regulatory compliance across a wide range of real-world assets, known as RWAs, and tokenised assets.

So, what are RWAs and tokenised assets exactly?

Real World Assets in crypto refers to the tokenisation of tangible assets that exist in the real world, that are brought on chain.

These are actual assets that exist in the physical world. Meaning examples could be things like art, commodities, real estate, or even Government Bonds.

As for why you would tokenise a Real World Asset, the main benefit from a crypto perspective would be to use it to earn additional APY on your staking by using it as leverage.

By tokenising a Real World Asset, you can get additional on-chain purchasing power which can be used to earn higher annual yields through DeFi.

Mantra believes that a “chain of regulated digital assets” will create a forward-thinking protocol that will attract users from diverse backgrounds, including those who may not be current participants within the crypto space.

Unlike other chains that build their infrastructure and then look for developers to build on their platform, the MANTRA Chain will already have a thriving ecosystem in place because Mantra is bringing pre-built, compliant decentralised apps from SOMA finance with them.

Consequently, Mantra also believes that future regulation will primarily focus on the application layer, rather than the protocol layer. This means with the apps themselves, and not the blockchain overall.

As such, for Mantra it makes logical sense to build a protocol that supports a variety of regulated activities, which can include on-chain identification, permissioned access to products, and connectivity to the fiat banking system.

In short, Mantra allows for the permissionless ability to build Web3 applications on a high-performance, scalable blockchain architecture, but with the toolkit to build regulated, compliant, and permissioned applications.

How does Mantra work?

Mantra was built using the Cosmos SDK, and as such is part of the Cosmos’ network of independent blockchains.

As it was built using the Cosmos SDK, this means the project is a Proof-of-Stake based network that runs a Byzantine Fault Tolerance consensus mechanism, known as Tendermint.

Additionally, thanks to the Inter-Blockchain Communication Protocol, all blockchains built through the Cosmos SDK can communicate and interact with each other as if they were one blockchain while retaining all of their independence.

Mantra works like any other blockchain platform which hosts apps, it provides a framework for developers to build applications.

So, what makes Mantra special?

What makes Mantra unique?

In short, a focus on regulatory compliance.

Whether we like to accept it or not, for crypto to truly go global it will inevitably need to be regulated in some way, shape, or form, and Mantra is looking to capitalise on that fact.

In the intro, I referred to Mantra as a “Permissionless Blockchain for Permissioned Applications.”

To clarify, a permissioned blockchain restricts access and control to a select group of participants, meaning it requires authorisation for network participation.

Alternatively, a permissionless blockchain allows anyone to join, participate, and validate transactions without needing prior approval.

This means Mantra is open for anyone to build applications, however, these applications are often permissioned in such a way that not everyone can use them.

As an example, a permissioned requirement for a Mantra application could be the basic Anti-Money Laundering and Know Your Customer verifications required by most centralised exchanges to ensure they are compliant with the various local laws of the country in which they operate.

Meaning, while cryptocurrencies can sometimes be seen as a way to dodge regulations, Mantra is one of the few blockchains that is designed to actively enforce them.

If you have a project where a specific regulation must be followed, Mantra looks to provide you with the framework and software development kits to make it happen.

It is this approach of compliance above all, or “Safety First” as their website calls it, that makes Mantra unique within the space.

Mantra is designed specifically to entice traditional financial institutions and other off-chain corporations onto the blockchain, and to achieve that, especially for companies who have never participated on the blockchain previously, it provides the set-up to ensure the rules they set are followed, without exception, keeping them from conflicting with organizations such as the SEC.

OM Tokenomics

Mantra has a total supply of roughly 888 million OM tokens, of which 836 million are currently in circulation.

As is typical for projects on the Cosmos ecosystem, the OM token can be used for payments, staking, and governance.

By the time all 888 million OM tokens have been released, which will occur in 2025, the Initial Token Distribution will look as follows:

30% will be allocated as Staking Rewards, 17.5% will be given to the Team & Advisors, 12.5% towards referrals, another 12.5% for Grants, 10% towards Reserves, 9% in the private distribution, and finally 8.5% through the public distribution.

For clarity, referral tokens are meant to be used for MANTRA DAO community and ecosystem development activities.

This can include airdrops, bounty campaigns, exchange and refer-a-friend promotions, among other promotional and community-building campaigns.

Is Mantra worth the hype?

Mantra looks to bring the perks of DeFi to traditional finance, and to achieve that it has created a platform which has compliance in mind.

Mantra looks to provide you with the blockchain, tools, and developer libraries available to build the application you wish, with all the required permissions for your local area hardcoded into the application.

It is likely a smart strategy to slowly begin to focus on compliance with the larger financial system, and consequently, by doing so Mantra should have set themselves up nicely for the future ahead.

However, as we’re all aware, it will also require expert management from the top to avoid misfortune and to ensure they stay relevant over time.

However, assuming that is the case, it currently seems likely that there is still room for growth for Mantra as a whole.

But, as always, nothing is ever guaranteed in crypto, of course.

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