What is Mangata, who is behind it and why $MGA $MGX

The one-stop shop for dotsama tokens!

Unbiased notes of Dotsama ecosystem.

In collaboration with WagMedia and PolkaHaus

General Info

Decentralized exchange is expensive, prohibitive and unfair. Mangata mission is to tackle these problems. Tokens that will be used are $MGA for Polkadot and $MGX for Kusama. There is no trading at the moment. With 1.8k+ members in TG and 3.3k followers in Twitter the project is kinda under the radar (for now), while there is no WP at this moment nor a full-detailed roadmap.

DEX problems

• High gas fees
• insider trading
• private mempools
• too much power to miners (MEV)/ front running bots
• high slipage

Gas fees are high and Flashbots auctions are capturing the slippage of DeFi users, resulting in users moving to private mempools. Also while ETH moving to PoS, another question is crucial: Stake or DeFi? PoS is removing liquidity but DeFi needs it!

What is Mangata?

Easy and secure DEX for Ethereum and Polkadot that will be connected to Polkadot as a parachain.

We believe the long-term success of a DEX is determined by becoming the most capital-efficient DEX.

The three main pillars of the DEX-chain:

1. A No Gas Economy: There are no gas fees for transactions. You only pay 0.3% exchange commission.
2. Prevent Front-Running and MEV (where bots and nodes are stealing value from traders; this is commonplace in Ethereum). They prevent this with Themis protocol
3. Proof of Liquidity: Stake once, earn twice.With Mangata, you don't have to choose between staking and liquidity provision. Instead, on Mangata you stake LP tokens and let your capital generate trading fees in the meantime.

Capital efficiency and PoL

Capital Efficiency is the relationship between how much someone is spending to grow revenue and how much they are getting in return. Less gas fees to perform a transaction, less slippage when swapping tokens, less transactions to achieve what you want, mean more capital efficiency... A protocol is said to be capital efficient if it has little friction, little overhead costs and provides the most value for the capital invested.

Paying less to get more will be THE key driving factor to decide which DEXes are the most successful.

So with PoL: Instead of a single asset, you stake LP tokens: Instead of just staking the native token like in other networks, you first obtain liquidity pool (LP) All staking assets are paired against MGA: Every asset is paired against MGA to create stakeable LP tokens Staking LP tokens keeps the corresponding pools liquid: LP tokens are staked with nodes and will automatically be used in the corresponding liquidity pool Security: only assets whitelisted by governance will be allowed as Proof-of-Liquidity base assets. Stake once, earn twice: Rewards are much more attractive. As users can be stakers and liquidity providers at the same time, they will profit from block rewards AND trading fees.

Risks: Impermant loss + slashing risk (be advised)

Future/Backers/Achievements

In the (near) future Magata will implement

• on-chain limit orders
• new UI
• Analytics
• Hardware wallets
• new Defi Apps

Backers:

Achievements: recently completed their first milestone in Parity’s official Substrate Builders Program and are about to close the second milestone.

MangataX

Mangata will first deploy in Kusama as parachain with $MGX. By their blog:

It is an Innovation Lab that fully embraces the spirit of Kusama: Innovation, Experimentation, Chaos.

Tokenomics: Max supply after 5 years: 4.000.000.000 MGX Supply at TGE: 1.000.000.000 MGX 80% community alloc 140 mil MGX for first crowdloan (3.5%): 20% unlock at TGE 80% vested KSM cap: 50.000 KSM Token sink: Buy and burn Token source: Liquidity mining and staking rewards Exchange commision: 0.3% which divided: 0.2% trading fees (liq providers) +0.05% burn +0.05% treasury

A Crowdloan is basically paying the rent for security and access to the Kusama network. Currently slot prices are <50k KSM, equalling about 15m USD. If a chain does not self-fund but asks for a crowdloan, network users expect at least the opportunity cost of 15% Kusama staking rewards in exchange. Currently they expect quite a bit more as many projects are offering pretty cheap tokens for the value they are actually providing. Effectively some projects are outbidding themselves at how cheap they can give away their tokens.

So will all projects be successful? NO! Some will suceed, some will die. In 1-2 years, the situation will be different, as we will know much more precisely what actually contributes best to a successful project and what not. Long term play...

More info in tokenomics paper of Mangata-X Roadmap of Mangata-X: January: Campaigning for the Crowdloan, release of the Crowdloan Website and more information

February: Crowdloan and Parachain Slot Auction. TGE.

March: transition to governance, remove Sudo key, bootstrap the first MGX pool

Moving forward: open channels and build bridges

There is no intention from the team to have a stable Mangata coin. They will allow other stables in Mangata X like MIM and they do fancy OHM, ROME and other DeFi 2.0 tokens!

Team and The End Game

Company is based in Slovakia and team is international, consisted of 13-14 experienced developers and 2 advisors. The CEO Peter Kris is co-founder of Block Unison and OG in the space from 2012. Yeap, no big names here and no multi million dollar companies created, but Tommi Enenkel (Communications) caught my eye to be honest. End Game for Mangata? Simple: The most capital efficient DEX in Dotsama!

More content? Yessir!

I managed to get Tommi (Alice And Bob for dotsama lovers) straight from Mangata Labs for a chat, and i was impressed by his knowledge and his humbleness. Lets get to it!

• Hello Tommi! Me, WagMedia and PolkaHaus are honoured to have you explain what Mangata is all about. A little background of your work, how u got involved with mangata and why to be bullish on the team?

They seem honest, with vision but not made any big companies as back round.

I have a background as CTO for a medium size organization. My previous organization was very volunteer-driven and so we always had a heavy focus on communication-driven technology like websites, newsletter, content marketing etc. I became more involved in Polkadot and especially Kusama when I started running a validator node for Kusama in April 2021 and then started to create explainer videos and news for Kusama and Polkadot. I got involved with Mangata when co-founder Peter Kris reached out to me. He has seen my video and wanted someone for Mangata who could explain the complex tech in easy terms, who could build a community and create more public exposure for Mangata. I decided to become part of Mangata because Mangata is solving a very specific and important problem that affects DeFi: Capital Efficiency. Capital Efficiency is when you spend less to get more. In the current state of DeFi, virtually all blockchains ask for Gas on top of transaction fees while at the same time front-running bots and nodes steal your slippage when you trade. This makes trading crypto more expensive than it needs to be. Mangata fixes this by creating a DEX-specific Parachain that solves these problems on the consensus level, maximizing capital efficiency and leveling the playing field for everybody.

• CEO introduced mangataX as experimental, chaotic, innovative. How the kusama version of mangata will be different from polkadot? Wouldn't be beneficial to have 1 token in both ecosystems ( less work? Maybe deeper liquidity)

The Kusama and Polkadot have two different demographics. This is not even about "institutional" vs "retail". This is about innovation and risk taking vs. consolidation and stability. Both sets of values have their merit and different investors have different investment profiles.

The Kusama network speaks to innovators and risk takers. The community consists of people who are actively seeking out new opportunities, taking on risks, making their bets, getting involved and driving technology forward. They embrace the chaos that can be accompanied by cutting-edge technology. We want to provide them with Mangata X, a platform that offers new tokens from innovative protocols and that listens to their suggestions on new features. The community should also have a choice on which tokens the network incentivices for liquidity mining. The Polkadot network offers stability and a more conservative approach. It offers a more streamlined experience and features that have been battle-tested already. You maybe can think of it like Mangata for Polkadot and Mangata X being the Pro version for Kusama. I don't believe that having the same token for both networks is beneficial. The different communities will have different risk profiles and I expect them to show this through the choice of liquidity mining incentives paid to liquidity pools. If the Mangata X community decides to support the newest DeFi 2.0 token liquidity pools, they should have the freedom to do so without too much coordination requirements with the Mangata community on Polkadot.

• Several detailed posts in discord, tackled tokenomics behind mangataX but let's be honest, community will find 3% for crowdloans a bit small. Are there any plans to change anything regarding MGX distribution?

If you only do a surface analyis of tokenomics by looking at a single number, you might come to that conclusion. If you do the work of an actual investor, dyor, dig deeper and run the numbers, I am certain you will find Mangata X to have a very good value proposition. Allow me to give you the exec summary:

• We are not only building a DEX, we are building a community-owned DEX of intelligent and active investors who build a shared mental model on how to solve the big problems of DeFi. Mangata X is for Pros: We are not for the "spray and pray" type of investor, but for people who actively manage their portfolio to maximize returns.
• MGX Tokenomics are designed to actively guide progressive decentralization over a period of 5 years. Within 2-3 years more than 50% of tokens will be in the hand of the community. This means that we cannot give out excessive amounts of tokens in the beginning to please crowdloaners and hope everything turns out well. Instead we want to provide incentives along that path that make sure Mangata wins in the long-term also.
• 80% of the final supply of MGX tokens are reserved as community incentives.
• Our Proof-of-Liquidity "stake once, earn twice" model allows token holders to provide liquidity and earn two types of rewards: liquidity mining rewards (37.5% of final supply) and ALSO staking rewards (30% of the final supply).
• Crowdloaning, especially for the Kusama community is only a small part of the journey. We know that crowdloaners tend to do more research and get more involved. Crowdloaners who get convinced of a project tend to stick with it to become part of the journey. We are looking for people who develop enough conviction in Mangata and Mangata X to decide to become part of the journey and get rewarded along the way. Community-owned also means that community participation should also be rewarded: 4.25% of the final supply is reserved in the Ecosystem Development Fund for community members who contribute to the ecosystem in a meaningful way. We want to engage the tipping system as much as possible.
• Finally: We might have a smaller relative percentage of the final supply, but the crowdloan rewards are 140m MGX, which is 14% of the initial supply of 1bn MGX. Additionally, slot auction prices have gone way down in recent months and we actively monitor prices. By setting a low cap, relative rewards will be sufficiently high to ensure that even on a 1-year time horizon a decent ROI can be expected. Everyone can and should run the numbers themselves and we are happy to discuss this on Discord and provide the proper frameworks to run the numbers

• Mangata/composable collaboration. Do you guys intent to use the vault parachain strategy? Any other partnerships/talks with other dotsama teams?

We built some relationships with other teams and are in the process of reaching out to more teams. Most of it is behind the scenes at the moment. We have seen some new relationships being established by inviting teams to our Mangata Monday call where we get experts onto our weekly community event to discuss and learn from each other. The latest one was with RomeDAO where we discussed how DEX-owned liquidity could work out. I have talked with MarmiteToast from Composable to set up a call in the next weeks. We aim to have special guests more often!

• Recently you made a proposition to kusama treasury for 10mil ksm/eth liquidity. Any news regarding this?

We got some feedback from different people that they value the trustless approach we are taking: We are not asking for KSM to be handed over to us, but rather that Kusama governance itself aquires and deploys 10m USD worth of KSM-ETH liquidity on Mangata X. This would be a complete novelty in our space and there are still some technical hurdles that need to be overcome together, the most important one being that we finally get a working ecosystem bridge between Kusama and Ethereum that allows capital to flow freely between both ecosystems. We know that Kusama Governance has it on the agenda and are optimistic that we will make this happen together. Composable created a similar proposal so we might also collaborate on drafting a common framework for Kusama Treasury to support DeFi in the Kusama ecosystem.

• Testnet is currently live. Is the community incentivized to test things out? when we could expect the mangataX auction to start?

We want to join the Kusama Crowdloan Batch starting in February. We are valuing actual feedback but don't want to incentivize people trying to "game" any potential airdrops. We will try to reward honest participation but don't want to make guarantees that might lead to hard feelings. If you like Mangata, come, be part of the journey and see how the ecosystem development fund will unfold.

• Thank you! Anything last you willing to share with the Dotsama community?

We think for a next-generation DEX that wants to win the endgame, innovation doesn't end at the network launch. It actually starts during the launch of the network. We envision Governance that is a lot more active. A community that discusses policy and drives new initiatives that are then incentivised by governance. DeFi moves fast and a chain needs to adapt to new tech, new reward schemes and new challenges. Early participation is important and we are keeping a list of people who contributed meaningful suggestions that help es expand our mental model.

A few problems we are currently trying to solve:

• We think we found a way to have on-chain limit orders that work together with AMMs. We are currently investigating this.
• We are thinking about way to have DEX-owned liquidity. Treasury could aquire by simple governance action and it could create deeper liquidity pools on important pairs.
• We will need people to participate in governance and solve early problems with us. In my opinion, Treasury should tip good proposals and active community members, similar to how Olympus is paying contributors.

https://twitter.com/andreas_seppy