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Celo has been grabbing the attention of many new users, especially those that are interested in “greener” blockchains. To this day, Celo has managed to attract almost $750M in crypto assets but the main driver of this liquidity is certainly Mento.Finance. A quick look at the protocol should easily explain its popularity.
CELO has a native stablecoin labeled cUSD and Mento.Finance plays a key role in maintaining the peg of this token. When demand for the stablecoin increases the CELO protocol mints cUSD and ‘sells’ them for CELO through Mento. Newly acquired CELO is then stored as collateral for the minted cUSD. The process works in reverse when demand for cUSD drops.
The platform itself is designed as an ordinary automated market maker but it can also facilitate large swaps through Granada Mento.
If you use the “Swap” function on Mento you will be able to perform CELO/Stablecoin swaps like on any other AMM but if you want to swap sums larger than $500,000 the Granada Exchange can be of use.
Such large trades would cause users to lose funds due to slippage so Mento solved this problem with Granada. The swap process is completely the same as with the swap function, but these larger trades will require users to lock their funds and allow the protocol to execute the swap during the course of a few days.
To get started with Mento you will need to connect to the CELO blockchain and acquire some CELO tokens. The easiest way to do so is through a centralized exchange that allows direct withdrawals to CELO. Alternatively, you can purchase the tokens on a different chain and bridge them over through the Optics bridge.
To set up your Metamask wallet click on the dropdown menu, “add network” and enter the following:
Network Name: Celo (Mainnet)New RPC URL: https://forno.celo.orgChain ID: 42220Currency Symbol (Optional): CELOBlock Explorer URL (Optional): https://explorer.celo.org/
Click “save” and your Metamask wallet will be ready to interact with dapps on CELO. After funding it with some tokens it should be very straightforward to mint stablecoins on Mento. Connect your wallet, select CELO as the first currency and choose the stablecoin you want to mint.
Mento.Finance is a one-stop-shop for stablecoins on CELO and so far, it seems to be working as intended. The peg for cUSD and many other stablecoins is maintained without issues and with more liquidity the protocol should be able to facilitate much larger trades without the need to process them for a few days.
References:Granda Mento | Celo Docs. (n.d.). Celo. Retrieved January 4, 2022, from https://docs.celo.org/celo-codebase/protocol/stability/granda-mento
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