Protocol Highlight: Mento Labs

Hi Markus! Can you share about your journey with Mento Labs? How did you come to co-found Mento Labs, and what inspired you to take on this role?

For more than 6 years I have been working on Celo, as its mission was what inspired me to join the community: Building a more inclusive financial system. Stablecoins are at the core of this mission. They enable remittances, payments, saving, (micro-) lending, and functioning FX markets everywhere in the world.

As stablecoins gained more importance it became clear that we need a dedicated core development team working on the stablecoin platform, therefore I led the spin-off of the team working on this platform. Mento is a fully decentralized platform for launching & operating customized stablecoins, combined with a highly efficient virtual AMM trading infrastructure so that users can easily swap from one currency to the other. Mento allows users to directly mint KES, EUR, REAL, and more. with $-stables.

You have a PhD in Economics and now you’re working in crypto! With your deep expertise in Economics, can you tell us more about what economic principles or theories you see playing out in the crypto space? What do you think most people get wrong about crypto (if any)?

Money itself can be seen as a technology, one that hasn’t changed much over the last 300 years. Speed and cost of payments are changing but we haven't seen much change in the fundamental technology of money.

With blockchain technology the range of features money can have can be expanded significantly. You could think about cool features like a Universal basic income, if you tie money to an identity protocol. For example, in times of recession, this technology can incentivize transactions to encourage the circulation of money. That is something that is easily implementable on a blockchain.

You could also consider natural capital backed currencies. When crypto currencies came out people thought this could be fiat. But people underestimated the potential. This could be a much bigger ecology of value: local currencies, regional currencies, global reference currencies, functional currencies, medium of exchange currencies, store of value currencies, all fulfilling their own function and interoperating with one another. This technology can also allow the creation of money without creating new debt. Reaching the capacity of earth we need complementary ways to create money into existence. Some of the ideas are pretty out there, but earning money into existence through planting trees would be possible using Web3 technology.

Mento enables many of these features. The first step is bringing FX on-chain, and making credit more accessible via local currency stablecoins.

What is the original story of Mento? How has it changed over time and why?

The first stablecoin on Mento has been the cUSD, that launched shortly after Celo’s mainnet was deployed. From the beginning,  a few principles have been at the core of Mento:

• Fully transparent. The codebase is open-source. The collateral is on-chain and the governance is fully on-chain.
• Stable. These stablecoins are designed for end-users in every country of the world, requiring high overcollateralized and diversified collateral to maintain the stability.
• Decentralized. No single point of failure or control.  

Over the years more currencies have been added. Following,  USD currencies like EUR, REAL, XOF, KES have been launched on Mento, with many more to follow.

What makes Mento different from the other stablecoin platforms that exist?

Mento offers a variety of currencies. USD stablecoins are a great use case. They provide stability in countries with volatile currencies. This allows people in countries particularly in emerging markets like Kenya to save and trade in a stable currency. However, when borrowing or engaging with local merchants, access to local (digital) currencies becomes crucial to avoid losses from exchange rate fluctuations. For example, borrowing in USD in a country with a devaluing local currency can result in higher repayment costs. Mento addresses this challenge by offering a platform for local currencies, allowing the community to launch local stable assets.

Mento is decentralized and permissionless with no single company or person in control. The launch of the MENTO governance token already has been a fully decentralized launch, voted on by the entire Celo community.

What are some initiatives or use cases of Mento stablecoins you are most excited about?

Microlending is one of the most exciting use cases. Nearly 2.5bn people remain excluded from formal financial services, contributing to a global credit gap of $4.9tn. Local currency stablecoins enable local currency credit.

Also the whole on-chain FX-market is highly interesting. FX trading, FX forwards, futures & options, global FX settlement transactions.

How should institutional investors think about the tokenomics and business model for Celo?

I may be biased but from a tokenomics perspective, the Celo chain is extremely undervalued. It’s one of the fastest-growing chains from a daily user perspective, onboarding thousands of net new users to Web3 on a weekly basis through applications like MiniPay.  

If I had to explain Celo’s business model at its core, its sustainable growth driven by a focus on real world use cases in emerging markets. Given our global ecosystem and reach, this year in particular we are doubling down on stablecoins and RWAs as key growth drivers. Native deployments of both USDC and USDT are prime examples within the past six months of this plan in action.

Congrats on the recent run up on Mento stablecoins! What, in your view, drove up the increase in usage?

User friendly wallets like Valora and Opera MiniPay. Valora and MiniPay allow users easy access to mobile transactions with Mento stablecoins, with settlements within two seconds and minimal transaction fees, and create a digital ecosystem for remittances and mobile payments.

MiniPay has more than 3M users and is quickly expanding across Africa. MiniPay includes a cool feature called “pockets”, that allows you to swap stablecoins easily with zero fee, built on Mento technology.

What’s something surprising about Mento that most people wouldn’t know about?

Take a look at the Artemis Dashboard. Mento is the second most used stablecoin platform in the world [on Celo], after Tether. And with some exciting new currencies in the pipeline, there is plenty of room to grow.

Microlending, remittances, and payments are great use cases for Mento’s local-currency stablecoin, so you can expect some exciting things on the Mento side soon. Including additional episodes of the airdrop. To stay up to date on everything that is happening at Mento Labs and with the Mento Platform, be sure to follow Mento Labs on Twitter X or join the Mento community on Discord

How does the Mento Labs team use Artemis?

The Artemis dashboards are extremely important for the Mento Labs team. We constantly check the daily active addresses and # transfers for the Mento stables on Artemis to check if the infrastructure we are rolling out is supporting users to use the stablecoins. The team is also currently exploring to replace more and more of our own analytics with Artemis. The Artemis team is amazing, and the Terminal is becoming more amazing every day.

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Readers should approach this information cautiously and consider their unique circumstances before making investment decisions. The views and opinions expressed are subject to change without notice, and Artemis bears no liability for any loss or damage arising from the use of this information.

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