The native token of Ethereum Layer-2 blockchain Mantle surged over 20% to reach a record high of $0.948 at one stage on Monday afternoon in Asia, according to The Block’s price page. The jump was mainly driven by the growing interest in Mantle MNT +0.53% ’s applications and the broader Ethereum Layer-2 ecosystem, experts said.

Joe Caselin, head of institutional marketing of crypto exchange BIT, said that Mantle’s “double-dose” drive — which offers double the market reference rate for staking ether — has driven its popularity.

"With Mantle Staked Ethereum (mETH), the team has cooked up ways to take market share away from category leader Lido. The unusually high 7.2% native ‘double dose’ yield serves as a clear example," Caselin told The Block. 

“As users get a taste of the mETH, developers are actively expanding Mantle's DeFi [ecosystem], enhancing mETH's utility across other apps and also securing partnerships with projects that appeal to institutional stakers,” Caselin added.

The Layer-2 network made significant growth since its mainnet launch in July last year, and is currently the seventh largest Layer-2 chain with a total value locked of over $219 million, according to CoinGecko data.

Rachael Lucas, crypto technical analyst at BTC Markets, pointed out Mantle’s correlation with ether, which grew over 30% in the last 30 days to surpass the $3,000 line.

“It’s important to note that Mantle Network functions as an L2 scalability solution on Ethereum,” Lucas said. “It employs validator nodes to compress transactions into Ethereum-compatible ‘compressed blocks,’ reducing gas fees and enhancing transaction throughput.”

Growing interest in L2

Aside from the growing interest in Mantle’s DeFi projects, industry experts said the attention the Ethereum Layer-2 ecosystem is receiving also played a part in the price increase.

“The soaring price of the Mantle token, one of the largest L2 tokens on Ethereum, reflects the market's growing interest in Layer 2,” said Greta Yuan, head of research at institutional digital asset solutions firm VDX. “Another reason for the price jump is the high anticipation of the ETH Cancun upgrade, which could further boost roll-up technology and bring fresh investment.”

Caselin of BIT said the anticipation for potential spot ether exchange-traded funds (ETFs) in the U.S. has also been factored into Mantle’s price.

“With analysts now certain that the ETH ETF approval has the same odds as a coin toss, there's a growing interest in liquid staking protocols as the most productive way to hold ETH in anticipation of positive news,” Caselin said. 

Some major asset managers in the U.S., including Fidelity and BlackRock, have applied for spot ether ETFs, with speculation that the Securities and Exchange Commission could approve them as early as May this year.