Mantle Ecosystem Tokens Drop on Bybit Contagion Concerns

Mantle, the fifth-largest Ethereum Layer 2 (L2) by total value locked (TVL), is facing tumultuous price action after a closely affiliated centralized exchange (CEX), Bybit, was hacked for $1.5 billion.

Mantle’s MNT token is down 17% since the hack was reported, and other tokens in its ecosystem, such as COOK and PUFF, are down 9% and 3% in the same period.

The hack occurred around 10:30 am EST following a multi-signature wallet compromise, resulting in nearly $1.5 billion in staked ETH assets being drained from the exchange and sold for ETH via decentralized exchanges (DEXs). ByBit is experiencing record outflows as a result, and more than $2.2 billion has left the CEX today.

Despite the sharp drop, MNT maintains the largest market capitalization of all L2 tokens, with a $2.9 billion valuation, compared to Arbitrum’s $2 billion and Optimism’s $1.7 billion.

Mantle merged with BitDAO, which had the largest DAO treasury at the time, in 2023. Consequently, Mantle now touts the second-largest treasury in DeFi at $3.3 billion, only trailing Uniswap.

There has not been any suspicious activity reported on the chain yet, but users have been quick to flee to safety before being unwillingly wrapped up in any unforeseen contagion effects of the hack.

Veer, a contributor to Mantle, posted on X, “Mantle and mETH Protocol are safe. Users are safe. Bybit's ETH cold wallet is an isolated security breach. We are monitoring the incident closely and working with the top security experts @_SEAL_Org.”