Exclusive interview for Gulf Crypto Insight
Manta is a set of easy-to-use and secure open-source and verifiable protocols based on the Substrate framework. It uses zk-SNARK to provide complete end-to-end anonymity, high bandwidth, and strong inter-network compatibility (supports Polkadot’s main cryptocurrencies and stablecoins on the parachain). Manta includes a decentralized privacy payment protocol and a decentralized privacy token exchange protocol, as well as a decentralized confidential data and synthetic asset provisioning protocol to be developed in the future.
The main idea behind Manta is to issue privacy coins/tokens with stablecoins and other underlying tokens on a contract basis at a 1: 1 minting cost ratio. In addition, a decentralized private trading platform can support the privacy token exchange.
We are closely following the development of decentralized finance. In contrast to traditional finance, DeFi is publicly available, protects personal data, and is not subject to surveillance. However, current DeFi projects are still flawed: they have serious issues regarding privacy (address transparency and information traceability), scalability (limited by transaction fees and transaction speed), ease of use, and liquidity. Research shows that at this point, user addresses can only provide false anonymity, not real privacy. Commercial competitors or malicious Internet users can potentially match user IDs to addresses using transaction graph analysis.
The Manta Network addresses these issues. It is perhaps the only one on the market to provide real privacy in DeFi, as well as decent network scalability and private token interoperability. In addition, compared to the centralized dark pool, the decentralized version is more reliable and secure as it reduces the number of single points of failure.
We have talked to Kenny Li, the COO and co-founder of the Manta Network. Kenny is a serial entrepreneur with a decade of experience scaling startups. He started mining bitcoin in 2013 and worked on multiple crypto projects since then. He holds an MBA from MIT Sloan and has been a teaching assistant in several blockchain courses.
– What problems does the Manta Network solve for DeFi users?
– We are highly focused on privacy. For example, right now, you can check your bank account, look at your balance, get your credit card information. I cannot do this. I would have to fake your identity first and then do it again and again.
The most essential level of privacy and security exists in the space between two web nodes. But if I want to verify your assets, transactions, smart contracts, and networks you are active in, all I really need to know is your address. Then I could just look at your transaction history.
It is a major issue both at the user level and at the business level. Our task is to ensure the proper level of privacy for all network transactions.
– What is the total number of MANTA token holders? Could you give the approximate number of users? Who is the average Manta Network user, where do they come from, what do they do, and what amount of cryptocurrency do they operate?
– Importantly, this is not yet something actualized. These are not our primary users, only a demographic profile that we target at the first stage of the project’s development.
We definitely focus on major holders, institutional investors. They have high privacy requirements since they operate huge volumes of assets. If you try to picture what the world will look like in 3-5 years from today, you can see privacy becoming a standard requirement everywhere.
It can’t be just an option – privacy should be fundamental. For users of DeFi apps or other blockchain platforms, it must be part of the infrastructure. Basically, complete privacy must extend to anyone who looks to harness the power and potential of the blockchain.
– We’ve learned that privacy is one of the main values of your project. Could you talk about your other fundamental principles?
– I believe that other fundamental values are more about the functionality of specific products. One of the things we are doing right now is a project called MantaPay. MantaPay is a service that carries out transactions for various token assets.
Maintaining privacy is the primary goal of this project as well. It uses its own tokens. We can make any parachain asset private and conduct private transactions to conceal the origin of tokens. This is the key difference: we can make private transactions with different tokens, not just a single one.
We also have MantaSwap. MantaSwap is our own decentralized exchange. It functions similarly to any other but provides a protective layer for both the user and the provider’s identities, which is essential. The inability to see each other’s addresses makes the exchange process fully confidential.
– You’ve probably been asked this a lot. Do you have any concerns over your system of anonymity potentially serving to benefit destructive forces such as terrorists, organized criminal groups etc.?
– This definitely seems to be a very popular question. Compare it to the restroom. You see, when people go to the restroom, you can see who is entering and exiting, but nobody knows what people are doing inside the restroom itself. We do the essential part, making sure that people that get in and out have good intentions. This is our main concern. Good players can join in and keep their privacy, which is our prime feature, but we certainly do everything to prevent bad players from logging in.
– How exactly do you distinguish and identify people trying to use your system while maintaining their anonymity?
– I wouldn’t want to go into too much detail here and disclose our methods. The only thing I can say is that we work with specialized identity tracking services.
– Could you talk about network scalability implemented in your project?
– Network scalability is definitely not an issue for us since we are going to be a Polkadot parachain, similar to how Kilimo planned to be a Kusama parachain. If necessary, we will surely scale up the network because we are not like smart contracts on the PoW consensus-based network. From my point of view, network scalability is not a problem.
– What future milestones are marked on the Manta Network roadmap?
– The first milestone is definitely securing the parachains. This process is unique to Polkadot and Kusama. I’ll try to put it briefly: having our own parachain would mean that we can run on Polkadot and Kusama networks and connect to other projects on Polkadot and Kusama.
We must do this as the first stage in our development and get involved in the process. Kusama shares are going up right now, so we are hoping to get the slot as early as this month. For Polkadot, the same steps will take place a month or two from today. After we have these parachains, we can launch the Manta Network. The first phase is supposed to be the launch of MantaPay, a private transaction solution. The second phase is the launch of MantaSwap, a private decentralized crypto exchange. From that point on, we will present our developer tools, which will allow us to promote Manta as the privacy utility.
– How much overall investment has the project attracted since its inception?
– The only public announcement was made during our seed round, which officially closed in December 2020 but was extended to February-March of this year because of the due diligence process. At that point, we declared having raised a total of one million from the project’s founders. Since then, we have held several more private fundraising rounds.
– I know that at the very beginning of your career, you had to donate your blood for money in order to survive. It is an amazing example of willingness to put everything on the line. Could you please tell us about this period of your life? What were the main lessons you learned from it?
– I have learned a lot of lessons from this period, more about my philosophy than about the Manta Network. I mean, whether you like certain things or not, they are what they are. It is all relative and can change very quickly. There is no point worrying about what other people are doing, as long as their actions make sense to you.
There is another expression that stays with me: the years teach what the days cannot teach. Day after day, you may feel like you are making a lot of progress, but only as long as you keep building, creating something of value to other people.
– This fact is really amazing, it deeply impressed me. Now, let’s get back to the Manta Network. As was the case with your project, lots of others started with a lot of hype and a high level of interest but then disappeared from the radars. Are you afraid of going down the same path? What are you doing to prevent this from happening?
– This is definitely a scary prospect in the sense that you understand that the crypto market shifts very quickly. It is growing fast, and only the best innovations stay around. But at the same time, the majority of users are just amateurs.
I believe that everything DeFi-related has the highest demand levels right now. In this area, we see the advancement of different interest groups and various projects. If we familiarize ourselves with such exciting projects, we can “jump on the bandwagon” of some of them.
As for ourselves, we saw privacy as a fundamental issue from day one. It only becomes more and more evident. The more users, the more scalable DeFi projects, the more privacy becomes an issue.
Looking at the leading offers similar to ours currently on the market, it’s clear that the issue of security will also become increasingly relevant in the coming days, months, years. Therefore, we heavily prioritize those two points.
– Do you think the anonymity your product provides could be highly sought after by potential users in the Gulf countries? It is a very particular market. Even when it comes to the cryptosphere, it is quite different from the rest of the world. There is a lot of money in the region but not much trust. Perhaps you could use it as leverage to increase interest in your project? Have you ever considered it?
– I won’t pretend to be an expert on the Gulf region and its particular values. I cannot say with great certainty that I am familiar with it. But I think in general, as network adoption becomes more and more relevant, one thing stands out from business to business, a kind of synergy area, where one transaction chain is entirely transparent – and it is not just another company, not just your competitors.
Governments. This is a really significant issue. You may report your transactions to the government as part of your taxes or something like that. But then suddenly you find that other countries, other market players have full access to all these records. And it becomes a problem of the jurisdiction standing in the way of keeping trade secrets. Therefore, increased privacy for online transactions can benefit any business looking for some type of blockchain-integrated solution. Which means that it is not necessarily unique to the Gulf region, but it is in demand there, too, of course.
– At this stage, does Manta still enjoy investors’ attention? What qualities should a person or an organization have to get into your investor circle?
– This is an excellent question. I think this must be someone who believes in the importance of privacy. Most of our investors see and understand its value. When you are a large company, the more cryptoassets you have, the more you care about privacy and security. So all our investors must share our vision. This is definitely one of the main points.
Another point is the high strategic value. This is not unique to just Manta – it is a feature of the entire crypto market right now as it is a relatively “tough” place. If the project is looking for money, it is not an issue. There is more money around than the projects that want to get it. The real question is how much strategic value you can offer. It could be something on the operational side, on the hiring side, business partnerships, and so on. There is a whole bunch of different criteria that you can look at to see how valuable an investor could be as your key partner.
– Is there a danger that future growth in computing power may make the anonymity your project provides more vulnerable? Does the introduction of quantum computers lead to a likelier deanonymization?
– I believe so. Here is the thing about quantum computers: you have to think about the time when quantum computers will be not only available but also powerful enough to present a threat. And I think this is one of the things that we should be discussing. There are already quantum-simulated computers right now, and private companies are already building them. For now, though, their functionality is limited.
In the long run, the concern about quantum computers will become a broader issue, and not only for the Manta Network but also for all players in the crypto market. Hashing functions, crypto keys – these can all be potential threats associated with the emergence of quantum computers. We definitely need to be careful about the issue and monitor it closely in the future. As for the present, let us focus on the product launch.
– Those are long-term goals and long-term issues you can contemplate in days to come?
– What markets are you targeting? Do you monitor the project of the Gulf region players? Are you interested in partners from the region?
– We are very interested in partners from this region. As an on-chain project focused on privacy – this is a little more insight – we once talked about a team in North America, South Europe, South Asia. As you can see, it’s less about the region and more about different people, organizations, partners and the values we share. We are certainly looking for partners in the Middle East right now.
– A few personal questions, if we may. How does your recently obtained MIT University MBA degree prove to be useful in your work now? Does it help you handle the current situation?
– I didn’t use the knowledge I gained there for most of my life, for most of my professional career. In this regard, I have learned most of my skills and abilities from personal experience, which is especially relevant for what I do in the crypto space so far.
My familiarity with cryptocurrency blockchain projects, just like my experience in other areas, is what gives me a crucial advantage. However, I met the rest of the co-founders at MIT. One of them, Victor, studied for a master’s in economics, but he also attended an MIT class on the blockchain. Another co-founder, an A-Gram employee, was working at an engineering website.
How valuable was an MIT degree? I definitely got my MBA experience. I learned about numerous operational aspects and how to better manage people and organize a process more efficiently. And that is what I value the most about the time I spent there.
– Do you think the Chinese government’s adversity to the crypto industry will negatively affect the crypto market globally?
– I am not an expert on China, so I won’t pretend to know what is going on there. I think this is what the Brazilians have been trying in various ways over the years. It’s not just China. A variety of other countries banned, allowed, and then banned the crypto again. And we see that the markets have adapted to this. So even the measures China is taking, I don’t think are entirely unique. I mean, you know they have implemented other restrictions in the past as well. And we saw the markets respond to these restrictions.
– What do you think is in store for DeFi in the next couple of years: a fierce competition against traditional banks or rather a relationship based on cooperation and synergy? Your call.
– To be honest, I am not that good at predictions. Things can change instantly; we see this a lot in the crypto world. I try not to make forecasts. I do see that there is a kind of broader acceptance of everything blockchain and cryptocurrency-related, and it is growing year after year. The traditional world is taking it more seriously than ever.
For example, the United States advocates taxing cryptocurrencies instead of banning them. For me, this is an indicator of slow but inevitable adoption. Overall, I think this is a good sign. I don’t’ know how this will play with the banks. I know that (especially now) this is an important goal for governments – to create a central bank digital currencies, CBDC, thereby showing disregard for “traditional” cryptocurrencies, or vice versa, to cooperate with the existing blockchain ecosystem.