Overview
Following the prior assessment conducted for the Mantle deployment, this analysis presents an updated set of recommendations reflecting the expanded set of assets proposed by TokenLogic. Since the initial review, the proposed deployment has evolved from a limited set of core assets to a broader configuration that includes LRTs, yield-bearing stablecoins, and additional ecosystem tokens. The scope of this update focuses on assets that are either already listed on Aave across other networks or have been extensively analyzed in prior research. Accordingly, the analysis does not revisit underlying protocol mechanics or asset-specific technical risks. Instead, it emphasizes current onchain liquidity, buy-side depth, and observable supply dynamics on Mantle, which are the primary determinants for parameter calibration at launch. Additionally, for assets such as wrsETH, syrupUSDT, and USDT0, where recommended caps are based on anticipated rather than observed liquidity, post-launch conditions will be closely monitored. The same applies to assets with existing but expected-to-expand liquidity, such as WETH and USDT0, with parameters to be adjusted if realized liquidity falls short of pre-launch assumptions and commitments.
Assets
As the asset set for the upcoming Aave v3 deployment on Mantle has expanded beyond the initial configuration of WETH, USDT, USDC, and USDe to include LRTs such as wrsETH, yield-bearing stablecoins including sUSDe and syrupUSDT, wrapped BTC such as fBTC, and additional ecosystem assets, a refreshed assessment is required. This review focuses on the current state of onchain liquidity, market efficiency, and general activity, as the prior recommendations were formulated over five months ago, and broader market conditions on Mantle may have changed materially since then.
WMNT
Unlike most Optimistic Rollups, where ETH serves as the native gas asset, Mantle Network uses MNT as its gas token. WMNT represents the wrapped ERC-20 compatible version of MNT. At the time of writing, MNT has an approximate market capitalization of 3.4 billion USD, with around 3.2 billion tokens in circulation. The asset was initially issued on the Ethereum mainnet, with roughly 10% of the circulating supply currently bridged to Mantle through the native optimistic bridge. As a result, a significant portion of the tradable supply is available on Mantle, although the majority of liquidity and price discovery still occurs off-chain, primarily on Bybit. A comprehensive assessment of MNT, including its economic role within the Mantle ecosystem and broader risk considerations, is covered in prior Chaos Labs research and is not repeated here.
At present, buy-side liquidity for WMNT on Mantle is relatively constrained. Aggregate depth across the main pools supports approximately $550,000 of buy-side liquidity within a 5% price impact. Liquidity is concentrated primarily in WMNT-USDe pools, with an additional pool against USDT. Across these venues, total liquidity is approximately $13 million, which is primarily composed of WMNT. As a result, effective executable liquidity remains modest due to pool composition.
Given MNT’s role as the native gas asset and its importance to the Mantle ecosystem, inclusion of WMNT as a listed collateral asset is justified from a strategic perspective. However, the current onchain liquidity profile supports a conservative risk posture at launch. This is reflected in the proposed configuration, where WMNT is effectively enabled as collateral, with stablecoin borrowing access restricted to an isolation mode with a debt ceiling.
sUSDe
sUSDe is a yield-bearing stablecoin that is already listed across multiple Aave v3 deployments and has been extensively covered in prior Chaos Labs research (see analyses [1], [2], [3], [4], and [5]). As such, this section does not revisit the underlying mechanics or protocol-level risks associated with the asset.
On Mantle, sUSDe has been live for almost 2 years and has maintained stable onchain liquidity, which is provided mainly by a single entity. Although more than half of this liquidity was withdrawn a couple of months ago, it remains relatively deep. The current circulating supply on Mantle is approximately 6.5 million units, with 99% of this supply deployed in DEX pools against USDe. Due to the depth and concentration of liquidity in sUSDe-USDe pools, the asset supports up to approximately $4.5 million of buy-side liquidity within a 5% price impact when routing into stablecoins such as USDC and USDT. As a result, sUSDe currently represents one of the most liquid yield-bearing assets on Mantle from an onchain execution perspective.
It is important to note that native staking of USDe into sUSDe and redemption of sUSDe back into USDe are not supported on Mantle. Users must stake or redeem on Ethereum and subsequently bridge the resulting asset to Mantle using LayerZero’s OFT standard. As a result, supply dynamics on Mantle are driven by cross-chain flows rather than local staking or redemption activity.
Given its liquidity profile, long operating history, and prior risk coverage, sUSDe is positioned to support inclusion under a stablecoin-focused E-Mode configuration with a comparatively high capital efficiency at launch.
USDe
USDe is a synthetic dollar issued by Ethena and, similar to sUSDe, has been extensively covered across prior Chaos Labs research. The analyses referenced in the previous sUSDe section also apply to USDe and are therefore not repeated here. The asset is already listed on several Aave v3 deployments, most notably on Ethereum and Plasma; its core design and risk considerations are therefore not revisited in this analysis.
USDe was deployed to Mantle approximately 2 years ago. Native minting and redemption are not supported on Mantle; instead, the asset is bridged from Ethereum using LayerZero via its OFT standard. The current onchain supply of USDe on Mantle is approximately 142 million tokens. A significant share of this supply, roughly 60%, is deposited into Bybit.
USDe maintains a reasonable level of onchain liquidity. Aggregate buy-side liquidity sits at approximately $5 million with an estimated 5% price impact when routing into stablecoins. This liquidity is distributed across several pools, where the main paired assets are represented by sUSDe, USDT, and WMNT, with the total liquidity across these venues standing at approximately $60 million in TVL. The existing pool depth is sufficient to support controlled usage across the dedicated E-Modes.
WETH
WETH on Mantle is bridged from the Ethereum mainnet through the native optimistic bridge. The current onchain supply of WETH on Mantle is approximately 84,000 units.
From a liquidity perspective, WETH exhibits a constrained execution profile when routed directly into stablecoins. Aggregate buy-side liquidity in stablecoins stands at approximately $800,000, with a 5% price impact. Total liquidity across WETH-related pools is roughly $5 million in TVL. However, direct WETH stablecoin pools are limited, and stablecoin access for WETH largely relies on routing through cmETH-paired pools, particularly cmETH-USDe. Due to this structure, effective stablecoin liquidity for WETH is indirectly derived and subject to additional routing. As a result, executable liquidity into stable assets remains materially lower than what headline liquidity TVL might suggest.
Given these constraints, a conservative approach to protocol WETH exposure is warranted at launch. The proposed parameterization reflects the current liquidity limitations on Mantle and is designed to limit risk exposure until deeper and more direct stablecoin-based liquidity is established. While the stablecoin liquidity is currently limited, the Mantle team has committed to bootstrapping substantial DEX pool depth prior to the deployment of Aave. While such accommodations reduce liquidity risks, we aim to limit the use of WETH as collateral by utilizing an isolation mode with a debt ceiling aligned with the stablecoin-WETH liquidity profile.
fBTC
fBTC is a cross-chain Bitcoin wrapper issued by the Function team and is already listed on Aave v3 Ethereum Core. A detailed assessment of the asset’s design, custody model, and risk considerations has been covered in prior Chaos Labs research and is not repeated here.
At present, fBTC usage on Mantle is limited, with a circulating supply of approximately 256 units. More than 60% of this supply is deployed in DEX pools, primarily paired against cmETH and mETH. Similar to WETH, fBTC does not benefit from deep direct liquidity against stablecoins. Stablecoin access is largely indirect and relies on routing through (c)mETH-USDe pools. Under current conditions, aggregate buy-side liquidity into stablecoins is estimated at approximately $800,000 USD within a 5% price impact. Total liquidity across the relevant cmETH pools is roughly $16.5 million in TVL.
The price dislocation distribution highlights a clear divergence between fBTC/cmETH and fBTC/mETH pool dynamics. fBTC/cmETH pricing has remained tightly anchored across venues for the majority of the observation window, with dislocations generally confined within a ~1–1.5% range. This behavior reflects deeper, more consistent arbitrage in cmETH-based pools, which function as the primary price discovery venues for fBTC on Mantle.
In contrast, the fBTC/mETH pool exhibits higher and more frequent dislocations as compared to a normalized fBTC/mETH oracle feed, with deviations exceeding 10% during Q3 2025. These episodes do not indicate structural inefficiency in fBTC pricing. Rather, they are explained by venue-specific liquidity constraints. Importantly, these deviations are neither persistent across venues nor synchronized with cmETH-based markets, indicating that they stem from isolated pool mechanics and limited liquidity rather than systemic mispricing. Additionally, while the dislocations exhibited both significant magnitude and frequency, both metrics have decreased substantially since September 2025, indicating an increase in market efficiency.
Given the limited absolute supply and indirect, constrained stablecoin liquidity, as well as the moderate efficiency of the market, fBTC is suitable for onboarding only under a conservative configuration. This supports an approach with limited supply caps and segregated access to stablecoin borrowing through dedicated E-Mode, ensuring controlled usage aligned with the current onchain liquidity profile on Mantle.
wrsETH
wrsETH is an LRT that has been covered extensively in prior Chaos Labs research and is already listed across multiple Aave v3 deployments. As such, this section does not revisit the underlying protocol mechanics or address specific risk considerations related to restaking.
At the time of this assessment, wrsETH is not yet live on the Mantle network. Deployment is expected to coincide with the provisioning of a significant amount of DEX liquidity, with approximately $8-10 million committed ahead of launch. The proposed parameterization for wrsETH is therefore based on these pre-deployment liquidity commitments rather than observed onchain execution data. Given the absence of live market data, onboarding assumptions rely on the expectation that committed liquidity is deployed as indicated at the time of launch. Under this framework, wrsETH is suitable for inclusion with a correlated E-Mode configuration against WETH, while maintaining conservative initial caps. Post deployment, onchain liquidity and usage should be closely monitored, with parameters adjusted as needed to reflect realized liquidity and execution depth.
syrupUSDT
syrupUSDT is a yield-bearing stablecoin issued by Maple Finance and has been covered in detail in prior Chaos Labs research. The asset is already listed on Aave v3 deployments on Ethereum and Plasma; therefore, its underlying design and risk characteristics are not revisited in this update. syrupUSDT was deployed on Mantle approximately 40 days ago; the deployment of the asset has been facilitated by Chainlink’s CCIP, which can be observed here. Although the deployment has occurred, the market cap of the asset on Mantle remains negligible, with a supply of under $10. While the token has not grown on the instance yet, the team has made a commitment of over $20 million in initial liquidity to bootstrap the listing of the asset. The proposed reserve parameters and E-Mode configuration are therefore calibrated based on these stated liquidity commitments rather than observed onchain data. Additionally, we recommend conservative initial caps and segregated access to stablecoin borrowing through a dedicated stablecoin E-Mode.
USDC
USDC is a well-established stablecoin that is listed across multiple Aave v3 deployments and is widely used as a core unit of account across DeFi.
On Mantle, however, USDC supply and onchain liquidity remain relatively limited. The current circulating supply is approximately 27.5 million units, while total liquidity across DEX pools is around $4 million. The majority of this liquidity is concentrated in USDC-USDe pools. Given these conditions, USDC supports controlled usage on Mantle, with parameterization aligned to its current liquidity depth and concentration profile.
USDT0
USDT0 is a LayerZero OFT-wrapped representation of USDT, deployed on the Mantle network. The asset has been listed on multiple instances of Aave, notably the Plasma instance, where the cumulative deposits have reached over 2.2 billion tokens. The OFT standard facilitates a unified option to deploy and bridge assets from mainnet, which, in the case of USDT, is Ethereum, by locking the assets in an adapter contract with an equal amount of the token emitted on the destination network.
USDT0 liquidity has been deployed on Mantle relatively recently. As can be observed from the chart above, USDT0 is primarily deployed in the USDT0/USDT pool, indicating that a strategic shift from USDT to USDT0 is being prepared. Such dynamics explain the imbalance between the observed USDT0 and USDT liquidity depth, which currently surpasses its OFT-representation, mainly due to the $9 million USDT/USDe pool. Nevertheless, the Mantle network team has committed to substantially increasing the presence of USDT0 on the network, allowing for significant initial supply caps.
Considering the widespread adoption of USDT0 and its successful listings on several instances, we recommend aligning the asset configuration to USDT0 on Plasma while also including it in a list of E-Modes.
GHO
Chaos Labs supports launching GHO on the Aave v3 Mantle instance. Considering the substantial amount of lending activity projected for the instance, the strategic placement of GHO in the list of initial assets paves the way to broader expansion and adoption of the stablecoin. We also support the proposed risk parameters, as they align with those of previous deployments, such as Plasma, Arbitrum, and Base.
GHO Performance
GHO’s price performance has been strong on the Ethereum network, as empirically observed pricing data extracted from the GHO/USDC Uniswap v3 pool indicates high peg stability, with maximum dislocations of only 20 basis points compared to its anchor price of $1.
GSM Implementation
We support implementing a stataUSDT0-based GHO Stability Module, as onchain USDT liquidity is currently highly available. With ample supply and market liquidity, stataUSDT0 is well-positioned to serve as an effective stabilization asset for the GSM, absorbing fluctuations around GHO’s underlying value of $1. A substantially larger and expanding USDT0 market will also facilitate the maintenance of stable borrowing and lending rates, reducing the likelihood of rate volatility.
Steward Authority Framework
The governance framework grants GHO Stewards substantial authority to adjust parameters within established boundaries, thereby achieving a balance between flexibility and risk management. Such a configuration enables timely updates of the interest rate, supply, and borrow caps, along with the parametrization of the GSM within predefined constraints, allowing for prompt reactivity and effective governance oversight. Previous GHO deployments demonstrate that this approach effectively maintains stability during early launch phases and supports orderly growth.
IR
We recommend aligning the target interest rate of GHO with that of USDT0 and the broader stablecoin market, while introducing a meaningful base rate, thereby maintaining competitive debt pricing at optimal utilization within the instance.
Oracle/Pricing
This section outlines the recommended pricing configuration for the proposed assets on Mantle. The objective is to ensure consistent, robust, and conservative price formation aligned with existing Aave v3 standards, while accounting for asset-specific characteristics such as yield accrual. All referenced oracle feeds are available on Mantle at the time of writing, with the sole exception of the wrsETH-ETH exchange rate oracle, which would need to be deployed prior to enabling wrsETH.
WETH
WETH pricing is recommended to use the standard ETH-USD oracle feed.
WMNT
WMNT pricing is recommended to use the MNT-USD oracle feed. As WMNT is the wrapped ERC20 representation of Mantle’s native gas token, direct pricing against USD is appropriate.
USDe
USDe pricing is recommended to use the USDT-USD oracle feed, consistent with configurations applied across other Aave v3 deployments. In addition, a stable CAPO adaptor is recommended to constrain upward price movements.
sUSDe
sUSDe pricing is recommended to use the USDT-USD oracle feed in conjunction with the sUSDe-USDe exchange rate oracle. A dynamic CAPO adaptor is recommended to account for time-varying yield accrual while constraining extreme price movements.
fBTC
fBTC pricing is recommended to use the BTC-USD oracle feed. Direct pricing against BTC-USD provides a robust valuation reference consistent with existing Aave v3 configurations for Bitcoin correlated assets.
wrsETH
Pricing is recommended to use the ETH-USD oracle feed as the base price, combined with an wrsETH-ETH exchange rate oracle to reflect reward accrual. At the time of this assessment, the exchange rate oracle is not yet available on Mantle and must be deployed prior to activation. A dynamic CAPO adaptor is recommended to constrain extreme price movements while allowing gradual exchange rate evolution.
syrupUSDT
Pricing is recommended to use the USDT-USD oracle feed as the base price, combined with a syrupUSDT-USDT exchange rate oracle to capture embedded yield accrual. A dynamic CAPO adaptor is recommended to allow gradual exchange rate growth while constraining extreme price movements.
USDT0
USDT0 pricing is recommended to use the USDT-USD oracle feed. In addition, a stable CAPO cap is recommended to bound upward price deviations.
USDC
USDC pricing is recommended to use the USDC-USD oracle feed. A stable CAPO cap is recommended to constrain upward price movements.
GHO
GHO pricing should be anchored to a value of one USD, consistent with its design as Aave’s native stablecoin and existing oracle setups.
Recommendation
We support listing GHO at launch to establish its role as a core asset on Mantle, given the network’s growth orientation, clear demand for stablecoin borrowing, and GHO’s demonstrated peg stability. The proposed interest-rate curve and initial caps are consistent and comparable with previous Aave deployments. The remaining assets are configured with conservative risk parameters under Mantle’s current liquidity conditions. Core assets (WETH, USDT0, USDC, and USDe) provide the primary liquidity and borrowing rails, with parameters reflecting established onchain availability. Ecosystem and yield-bearing assets (WMNT, sUSDe, syrupUSDT, wrsETH, and fBTC) are included with conservative caps, restricted borrowability, and dedicated E-Modes to mitigate concentration and liquidity-adjacent risks. Additionally, for assets (wrsETH, syrupUSDT, USDT0) whose caps are being recommended based on not-yet-materialized liquidity commitments, we will closely monitor post-launch conditions and adjust parameters if realized liquidity falls short of pre-launch assumptions.
Specification
| Parameters | Value | Value | Value | Value | Value | Value | Value | Value | Value | Value |
|---|---|---|---|---|---|---|---|---|---|---|
| Asset | WETH | WMNT | USDT0 | USDC | USDe | GHO | sUSDe | fBTC | syrupUSDT | wrsETH |
| Isolation mode | Yes | Yes | No | No | No | No | No | No | No | No |
| Borrowable | Yes | No | Yes | Yes | Yes | Yes | No | No | No | No |
| Collateral Enabled | Yes | Yes | No | No | No | No | No | No | No | No |
| Supply Cap | 30,000 | 5,000,000 | 50,000,000 | 10,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 50 | 70,000,000 | 18,000 |
| Borrow Cap | 28,000 | - | 47,500,000 | 9,500,000 | 17,500,000 | 18,000,000 | - | - | - | - |
| Debt Ceiling | 30,000,000 | 2,000,000 | - | - | - | - | - | - | - | - |
| LTV | 80.50% | 40.00% | - | - | - | - | - | - | - | - |
| LT | 83.00% | 45.00% | - | - | - | - | - | - | - | - |
| Liquidation Bonus | 5.50% | 10.0% | - | - | - | - | - | - | - | - |
| Liquidation Protocol Fee | 10% | 10% | 10% | 10% | 10% | - | 10% | 10% | 10% | 10% |
| Variable Base | 0.0% | - | 0.0% | 0.0% | 0.0% | 2.0% | - | - | - | - |
| Variable Slope1 | 2.50% | - | 5.0% | 5.0% | 5.25% | 3.0% | - | - | - | - |
| Variable Slope2 | 8.00% | - | 10.0% | 10.0% | 12.0% | 40.0% | - | - | - | - |
| Uoptimal | 90.0% | - | 90.0% | 90.0% | 85.0% | 90.0% | - | - | - | - |
| Reserve Factor | 15% | - | 10% | 10% | 25% | 10% | - | - | - | - |
| Stable Borrowing | Disabled | Disabled | Disabled | Disabled | Disabled | Disabled | Disabled | Disabled | Disabled | Disabled |
| Flashloanable | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Siloed Borrowing | No | No | No | No | No | No | No | No | No | No |
| Borrowable in Isolation | No | No | Yes | Yes | Yes | Yes | No | No | No | No |
| E-Mode | 5 | - | 1, 2, 3, 4 | 1, 2, 3, 4 | 1, 2, 3, 4 | 1, 2, 4 | 1 | 3 | 4 | 5 |
E-Mode Configurations
sUSDe Stablecoins #1
| Parameter | Value | Value | Value | Value | Value |
|---|---|---|---|---|---|
| Asset | sUSDe | USDe | USDT0 | USDC | GHO |
| Collateral | Yes | Yes | No | No | No |
| Borrowable | No | No | Yes | Yes | Yes |
| Max LTV | 90.00% | 90.00% | - | - | - |
| Liquidation Threshold | 92.00% | 92.00% | - | - | - |
| Liquidation Bonus | 4.00% | 4.00% | - | - | - |
USDe Stablecoins #2
| Parameter | Value | Value | Value | Value |
|---|---|---|---|---|
| Asset | USDe | USDT0 | USDC | GHO |
| Collateral | Yes | No | No | No |
| Borrowable | No | Yes | Yes | Yes |
| Max LTV | 90.00% | - | - | - |
| Liquidation Threshold | 93.00% | - | - | - |
| Liquidation Bonus | 2.00% | - | - | - |
fBTC Stablecoins #3
| Parameter | Value | Value | Value | Value |
|---|---|---|---|---|
| Asset | fBTC | USDT0 | USDC | USDe |
| Collateral | Yes | No | No | No |
| Borrowable | No | Yes | Yes | Yes |
| Max LTV | 75.00% | - | - | - |
| Liquidation Threshold | 79.00% | - | - | - |
| Liquidation Bonus | 8.00% | - | - | - |
syrupUSDT Stablecoins #4
| Parameter | Value | Value | Value | Value |
|---|---|---|---|---|
| Asset | syrupUSDT | USDT0 | USDC | GHO |
| Collateral | Yes | No | No | No |
| Borrowable | No | Yes | Yes | Yes |
| Max LTV | 90.00% | - | - | - |
| Liquidation Threshold | 92.00% | - | - | - |
| Liquidation Bonus | 4.00% | - | - | - |
wrsETH Correlated #5
| Parameter | Value | Value |
|---|---|---|
| Asset | wrsETH | WETH |
| Collateral | Yes | No |
| Borrowable | No | Yes |
| Max LTV | 93.00% | - |
| Liquidation Threshold | 95.00% | - |
| Liquidation Bonus | 1.00% | - |
CAPO
| Asset | maxYearlyRatioGrowthPercent | ratioReferenceTime | MINIMUM_SNAPSHOT_DELAY |
|---|---|---|---|
| syrupUSDT | 8.45% | Monthly | 7 |
| sUSDe | 15.19% | Monthly | 14 |
| wrsETH | 6.67% | Monthly | 14 |
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this recommendation.
Copyright
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