Mode Network is a modular Layer2 project based on the OP Stack that focuses on the Defi track. It has implemented the Optimism’s Bedrock upgrade, which reduces costs by over 95% compared to the Ethereum mainnet.
Development Status:
Steady growth, ranking high in TVL
Airdrop in progress, interactive guide
Analysis of project dimensions
Team Background:
Mode Ecosystem
Modular Layer2 Competitive Landscape
Summary:
Mode Network, a modular Layer2 project focusing on the Defi track based on the OP Stack, received a $5.3 million donation from the Optimism Foundation in January 2024 in the form of op tokens. Mode will also donate a portion of its sorter revenue to the Optimism Collective, maintaining a good relationship between Mode and the Optimism Foundation, which is beneficial to the project’s development.
Mode went live on the mainnet on January 31, 2024, and started its token airdrop in February.
Since its mainnet launch, TVL has been steadily growing. As of March 19, 2024, it ranks 13th in TVL among all Layer2 networks, with a value of $162 million. The daily average TPS is 1.62, and the median GAS is 0.001Gwei, equivalent to less than $0.01 in actual cost. There have been 2.12 million transactions in the past 30 days.
The total supply of Mode tokens is 10 billion, with 5.5% allocated for airdrops. The specific token economics have not yet been released.
Mode started its token airdrop in February and is expected to distribute the tokens in April. Users can earn airdrop tokens by accumulating points. Participating now allows users to earn profits in less than a month.
There are three ways to earn points:
– Rewards for existing users: Web3 users will receive initial points based on their blockchain interaction records. The points can be activated by cross-chain assets (no amount requirement).
– Referral rewards: Users can earn 16% of the points of invitees using their referral codes.
– Ecosystem interaction rewards: Interacting with Mode ecosystem applications can earn points. Different types of projects will receive different point rewards.
For developers, Mode implements:
– Sorter revenue rewards
– Developer airdrop rewards
– Optimism RPG financing rewards
Developer airdrop rewards account for 5% of the total token supply and are not further explained as they are unrelated to most users.
For regular users, the specific interaction process is as follows:
1. Check the initial points on the airdrop activity page (https://ref.mode.network/MDCKN9). If no points are visible and it shows “INELIGIBLE TO CLAIM,” the user’s IP may be restricted and needs to be changed.
2. Bridge assets: Users need to bridge assets from other networks to activate points and require ETH as gas fees for the airdrop activity. They can use the official bridge or third-party bridges. Using the official bridge incurs higher gas fees and has a seven-day waiting period for withdrawals, while third-party bridges like MiniBridge (https://minibridge.chaineye.tools/) have lower bridge fees.
3. Interact with applications: Users can interact with applications on Mode to earn points. Different applications offer different point rewards. Additionally, Mode has partnered with lrt projects ether.fi and renzo, both of which have high TVL and sufficient funds, which helps increase Layer2’s TVL.
James Ross, Founder of Mode Network, graduated from the University of Sussex in the UK, majoring in economics and philosophy. He invested in eigenlayer and ethena and previously worked as a consultant at Hashflow. Federico Sarquis, the Technical Lead of Mode Network, previously organized events for Ethereum Argentina.
In terms of the team, Mode’s LinkedIn page has 15 employees, but the core team is not large. From the employees’ locations, they may adopt remote work. Founder James Ross’s ability to invest in eigenlayer and ethena suggests a good industry network.
On the technical side, Mode is a modular Layer2 network based on the OP Stack. It has launched Mode Flare, a Layer3 network supported by Optimism and Celestia, suitable for developing on-chain games and trading platforms. In addition to the concept of “modularity,” understanding OP Stack and Mode Flare is necessary.
1. Modular Blockchain: Modular blockchain focuses on handling a few tasks and outsources the rest to one or more independent layers of the blockchain. The purpose of modularity is to solve the blockchain’s “impossible triangle” of security, decentralization, and scalability. It was proposed by Ethereum founder Vitalik and is considered one of the standards for evaluating public chain projects. Projects like Bitcoin, Ethereum, and Solana have different focuses in the blockchain’s impossible triangle. Bitcoin has the strongest security and decentralization but almost zero scalability. Solana has the best scalability but lower security and decentralization. Modularity separates the consensus layer, execution layer, and data availability layer among different chains, allowing different requirements to be realized on different chains, minimizing the impact of the “impossible triangle.”
2. Op Stacks: Stack services introduced by Optimism, a top Layer2 project. Many well-known projects have adopted Op Stacks, such as Layer2 Base developed by Coinbase, Debank Chain developed by Debank, and Farcaster Stack developed by Farcaster. Op Stack services have been applied in various project domains, aligning with the Op superchain concept. Op superchain refers to decentralized Layer2s forming a network where all Layer2s share security, communication layer, and open-source technology stack. These chains must meet specific standards to enhance interchain interoperability. Layer2 projects using Op Stack services should be considered members of the Op superchain. According to L2beat data as of March 10, 2024, the top five Layer2 projects in TVL are Arbitrum, OP Mainnet, Blast, Manta Pacific, and Starknet. Optimism ranks 29th in cryptocurrency market capitalization, while Arbitrum ranks 47th. The TVL ranking does not correspond to token market capitalization due to the adoption of Optimism’s Stack services by many projects, highlighting the narrative value of Stack services. Therefore, joining the Op superchain should be beneficial for project development.
3. Mode Flare: A Layer3 network supported by Optimism and Celestia, designed for developers to deploy application chains. It features high throughput, fast deployment, EVM compatibility, and a flexible technical stack. Transaction fees are lower than $0.005. Three projects are preparing to launch on Mode Flare: DEDPRZ, a cryptocurrency casino built with $USA tokens and DEDPRZ NFTs; Liq Market, a decentralized derivatives exchange; and Macaw, a prediction market for political events or news. Other Layer2 projects have also launched Layer3 projects, such as Arbitrum’s Xai. These Layer3 projects are mainly designed for cheaper gas fees and higher throughput, targeting high-interaction games. Their application value may be slightly inferior to Layer2, but their potential is not low as a development direction.
In terms of the Mode ecosystem, it mainly consists of Defi projects with interactive value. Mode is currently focusing on collaborations with liquidity collateral projects, which benefits both parties by attracting more users and funds and providing more use cases for liquidity collateral tokens.
Mode is a modular Layer2 project that uses Op Stack services, making it suitable for comparison with other projects that use Stack services or modular Layer2.
Mode is a modular Layer2 project that uses Op Stack services and focuses on the Defi track. Op Stack has attracted many well-known projects, which helps attract users and expand the ecosystem. Furthermore, modularity is one of the key narratives of this bull market. Improving the performance of public chains cannot solely rely on a single chain. By adopting modularity, the advantages of different public chains can be utilized to the fullest extent. Therefore, leading modular projects have shown impressive performance in this round.
Overall, Mode aligns well with the current development path of Layer2, and its project achievements are worth looking forward to. In terms of competitive landscape, Mode performs well among similar projects and aims to become the DeFi Hub of the Op superchain, making it worth monitoring for future development.