Through the optimization of Rollup, Mode Network greatly improves the transaction efficiency and scalability of Ethereum, providing users and developers with a faster, more economical, and more scalable platform.
Mode Network is a modular Layer 2 network focused on the DeFi sector, built on Optimism’s Bedrock upgrade. It supports the fast development and deployment of Ethereum Virtual Machine (EVM) compatible decentralized applications (DApps) and reduces transaction fees by 95%.
Mode Network is known for its innovative revenue-sharing model, aiming to empower developers and users to build a world-class application ecosystem and directly earn rewards through recommended and contract-secured revenue. By allocating sequencer revenue to developers and users, it not only increases the decentralization of DeFi but also allows more people to benefit from network activities.
The “Optimistic Rollups” technology used by Mode Network is a Layer 2 scaling solution designed to increase the scalability of Ethereum and reduce transaction costs. This technology is implemented by running an independent execution layer on top of the Ethereum mainnet, significantly improving transaction processing speed without compromising security. The following is a more detailed explanation of the Optimistic Rollups technology used in Mode Network:
1. Batch processing: Optimistic Rollups combines multiple transactions into a batch and then submits the data of these transactions to the Ethereum mainnet all at once. This method reduces the need for individual transaction state transitions and verifications, thereby reducing transaction costs.
2. Delayed confirmation: In Optimistic Rollups, once a transaction is included in a batch, it is immediately confirmed on Layer 2 without waiting for confirmation on the Ethereum mainnet. This provides a fast transaction experience. However, the final validity of these transactions still depends on subsequent verifications on the mainnet.
3. Fraud proofs: Optimistic Rollups rely on an “optimistic” assumption that all transactions and batch processing are honest. If someone believes that a batch contains fraudulent behavior, they can submit a fraud proof to challenge the batch. If the challenge is successful, the fraudulent batch will be revoked, and the related transactions will be rolled back.
4. Rollback and security: Optimistic Rollups provide an additional layer of security as any transaction must ultimately be resolved on the Ethereum mainnet. This means that even in case of errors or malicious behavior on Layer 2, corrections can be made on the mainnet, ensuring the safety of funds.
Advantages and Impact:
– Scalability: Optimistic Rollups significantly reduces the demand for Ethereum mainnet resources by executing transactions on Layer 2 and only sending batch data to the mainnet, improving the overall scalability of the network.
– Cost efficiency: By reducing the number of transactions that need to be directly processed on the Ethereum mainnet, transaction costs for users are significantly reduced.
– User experience: Optimistic Rollups provide near-instant transaction confirmation, improving user experience, especially for applications that require fast transaction confirmations, such as exchanges or games.
– Compatibility: Optimistic Rollups technology supports the Ethereum Virtual Machine (EVM), allowing developers to seamlessly migrate existing Ethereum applications to Mode Network.
The sequencer cost-sharing mechanism in Mode Network is an important part of its core economic model, aiming to incentivize developers to build and maintain applications on the platform while increasing user participation.
This mechanism is achieved through the following key features:
1. Revenue distribution:
– Developer incentives: Mode Network allows developers to receive a portion of sequencer revenue by registering their smart contracts with specific fee-sharing contracts. This encourages developers to create and maintain high-frequency trading applications that generate more transactions and, therefore, more sequencer revenue.
– User rewards: Some portion of sequencer revenue is also used to reward network users, especially those who bring in new users through referrals. This referral mechanism encourages existing users to promote the network, helping increase user base and activity.
2. Contract registration:
– Developers must associate their smart contracts with fee-sharing contracts to benefit from the revenue. This often involves including specific code snippets when programming contracts to ensure that transactions can be properly tracked and reward distribution can occur.
3. Transparency and automation:
– The specific ratio and allocation rules of the fee-sharing are transparent on Mode Network and executed through smart contracts, ensuring fairness and transparency of operations. This automated allocation mechanism reduces potential disputes and enhances trust in the network.
Advantages:
– Incentivizing innovation: Mode Network incentivizes developers through financial rewards, encouraging more developers to participate and innovate, bringing more diverse applications.
– Increased activity: User reward mechanisms increase user participation, making users more inclined to use and recommend Mode Network, enhancing network activity and expansion.
– Ecosystem growth: With the emergence of more high-quality applications and an increasing user base, the entire ecosystem can grow rapidly, enhancing the overall value and attractiveness of the network.
The modular and collaboration models in Mode Network are core components of its blockchain architecture and operational strategy. This design aims to enhance the flexibility, scalability, and user participation of the network. By implementing these strategies, Mode Network aims to build a multifunctional and efficient ecosystem that supports diverse application development and promotes collaboration among stakeholders. Here are detailed explanations of Mode Network’s modular and collaboration models:
1. Definition and purpose:
– Modularity on the blockchain refers to breaking down network functionalities into independent components or modules, with each module responsible for specific tasks. This design allows for more flexible development and maintenance while enabling the network to better adapt to evolving technical and market demands.
2. Implementation:
– Consensus layer: Mode Network may adopt independent modules to handle transaction verification and consensus mechanisms, ensuring network security and integrity.
– Execution layer: Modular layer for executing smart contracts and processing transactions, optimizing resource usage and improving processing speed.
– Data layer: Independently handles data storage and access to improve efficiency and scalability.
– Interaction layer: Responsible for interfaces with users and external systems, such as APIs and front-end interfaces, ensuring a good user experience and system interoperability.
3. Advantages:
– Flexibility: Modularity allows for quick adjustments or upgrades to individual parts of the network without affecting other modules.
– Maintainability: Independent modules are easier to manage and optimize, reducing potential system errors and security risks.
– Scalability: Ability to individually scale certain modules as needed without having to reconstruct the entire network.
1. Collaborative ecosystem:
– Mode Network encourages and supports collaboration among various stakeholders, including developers, users, investors, and partners, to collectively drive the development and value of the network.
2. Incentive mechanisms:
– Developer and user incentives: By allocating network revenue (such as sequencer cost-sharing), providing development funding support, and organizing competitions, Mode Network incentivizes developers’ innovation and user participation.
– Partner incentives: Establishing partnerships with industry collaborators to jointly develop solutions, share resources, and market opportunities.
3. Governance model:
– Decentralized governance: Mode Network may adopt a decentralized governance model that allows network users and developers to participate in decision-making processes, such as determining key network upgrades and policy changes through token voting.
– Transparent communication: Regularly publishing project progress and financial status to maintain internal ecosystem transparency and open communication channels.
4. Technical collaborations and integrations:
– Standardized interfaces: Providing standardized programming interfaces (APIs) that allow third-party applications and services to easily integrate with Mode Network.
– Cross-chain interoperability: Developing support for interoperability with other blockchain technologies, expanding the scope and market acceptance of Mode Network.
The Mode Network Bridge is a key component provided by Mode Network in its Layer 2 solution, enabling users to efficiently and securely transfer assets between the Ethereum mainnet and the Mode Layer 2 network. The main purpose of this bridge is to simplify cross-chain operations for users while maintaining a high level of security and lower transaction costs.
Here is a detailed explanation of Mode Network Bridge:
1. Asset transfer:
– Mode Network Bridge allows users to transfer cryptocurrencies such as Ethereum (ETH) and other ERC-20 tokens from the Ethereum mainnet to Mode Network. This transfer is achieved by locking the assets on the mainnet and issuing an equivalent amount of tokens on the Layer 2, maintaining the balance of assets on both sides.
2. Two-stage operation:
– Deposit: Users first deposit assets from the Ethereum mainnet into the bridge’s smart contract. Once the deposit is confirmed, an equivalent number of tokens will be minted on Mode Layer 2 for users to use.
– Withdrawal: When users want to withdraw assets from Mode Layer 2 back to the Ethereum mainnet, the corresponding Layer 2 tokens will be burned, and the mainnet smart contract will release an equal amount of assets to the user.
3. Optimized transaction costs:
– By centrally processing cross-chain transactions, Mode Network Bridge significantly reduces transaction fees for users during cross-chain asset transfers. This is achieved by batch processing transaction confirmations on Layer 2 and utilizing Optimistic Rollups technology to reduce the demand for Ethereum mainnet resources.
4. Smart contract security:
– Mode Network Bridge uses thoroughly tested and audited smart contracts to handle asset locking and release, ensuring transaction security and fund safety.
5. Decentralized trust:
– While the bridge relies on smart contracts, Mode Network may implement additional security measures such as multi-signatures or decentralized trust mechanisms to further strengthen the security of cross-chain transactions.
6. Simplified interface:
– Mode Network Bridge is designed with a user-friendly interface, making cross-chain operations simple and intuitive, even for non-technical users.
7. Fast transfers:
– Transfers through the bridge can be faster compared to direct transactions on the Ethereum mainnet, as it leverages the efficient processing capabilities of Layer 2.
8. DeFi integration:
– Users can quickly transfer assets to Mode Network through Mode Network Bridge and participate in various DeFi applications, such as lending, trading, and liquidity mining.
9. Cross-chain interoperability:
– The bridge not only serves between Ethereum and Mode Network but theoretically can also serve as an interoperability solution with other blockchain technologies.Mode Network is an ecosystem built around its Layer 2 solution, aimed at improving the scalability and efficiency of Ethereum while reducing user costs. The ecosystem is designed to emphasize innovation, collaboration, and user participation, and includes several key elements.
Fee-sharing mechanism: The network distributes a portion of transaction fees to developers and users through a sorting fee-sharing mechanism. This incentivizes developers to build and maintain applications on the platform and motivates users to recommend new users to join the network.
Incentive measures: The ecosystem includes airdrops, reward programs, and referral rewards to increase the attractiveness and activity of the network.
Developer support: Mode Network provides comprehensive developer support, including documentation, development tools, and software development kits (SDKs), to facilitate the easy construction and deployment of applications on the network.
DApps ecosystem: The ecosystem already has or is developing various DApps, including decentralized exchanges (DEXs), lending platforms, games, and other financial tools. These applications leverage Mode’s low cost and high efficiency to provide users with diverse services.
Community-driven: Mode Network promotes a community-driven development model, allowing users to directly participate in network governance and decision-making processes through community voting and feedback mechanisms.
Partnerships: Mode Network has established partnerships with other blockchain projects, development teams, and enterprises to expand the functionality and service scope of the ecosystem.
Decentralized governance: Mode Network adopts a decentralized governance model that allows token holders to vote on critical network updates, fund usage, and policy changes.
Transparency: The ecosystem maintains operational transparency through regular updates and financial reports, enhancing community trust and participation.
Mode Network’s ecosystem is rapidly expanding, particularly in the DeFi field. Several key projects on the platform have already been launched, each showcasing unique features and market positioning. These projects include Ether.fi, Renzo, and IONIC.
The MODE token allows holders to participate in network governance, vote on key network upgrades and governance proposals.
The token is also used to incentivize users and developers to participate in various activities within the Mode Network, such as development competitions and user engagement events.
The MODE token supports integrated DeFi activities and community sponsorship, supporting the development of projects and community activities within the network.
The MODE token is used to support the expansion and enhancement of the entire Mode ecosystem, including funding new projects and partnership relationships.
A portion of the MODE tokens (35%) is allocated to user and developer airdrop activities, encouraging community participation and contributions.
19% of the MODE tokens are allocated to early investors, providing initial capital and development support for the project.
19% of the MODE tokens are allocated to core contributors and team members to incentivize their ongoing work and contributions.
27% of the MODE tokens are reserved in on-chain platforms and treasuries to support the long-term development and operation of the project, as well as potential future funding needs.
The total supply of MODE tokens is 10 billion, with an initial circulating supply of 1.3 billion.
Mode Network provides several ways for users to earn points, including bridging assets, inviting friends, and using DApps on the platform. Bridging assets, such as ETH, USDT, USDC, or WBTC, from the Ethereum mainnet to Mode Network allows users to earn more points the longer the assets are kept on the network. Inviting friends to join the platform also rewards users with 16% of the points earned by the referred users. Interacting with designated DApps on the platform, such as Eigenlayer, RenzoProtocol, Layerbank, Ionic, and Etherfi, allows users to earn double points.
Optimizing point earnings can be achieved by performing asset operations in multiple DApps within the Mode Network, such as staking, lending, and exchanging assets, to maximize point rewards.
Mode Network is led by two key leaders, James Ross and Federico Sarquis, who have deep industry experience and extensive network resources. James Ross, the founder, has a background in economics and philosophy from the University of Sussex and has served as an adviser at Hashflow and invested in Eigenlayer and Ethena. Federico Sarquis, the CTO, has organized events for Ethereum Argentina and has extensive technical and community experience. The team consists of 15 members and operates in a remote work model, enhancing operational flexibility and global collaboration.
In terms of funding, Mode Network completed a $9.75 million financing round in October 2020. Additionally, the project received a grant of up to 2 million OP tokens from the Optimistic Foundation to support user growth. In April 2024, Mode Network also completed a seed funding round led by KR1, but the amount is unknown.
Mode Network operates in the Layer 2 solution space, focusing on improving transaction speed and reducing costs by building a second-layer network on top of Ethereum while maintaining security and compatibility with the Ethereum mainnet. Similar projects in the same space include Optimism, Arbitrum, and Polygon.
Mode Network has seen steady growth in Total Value Locked (TVL) since its launch. As of March 19, 2024, it ranks 13th in TVL among all Layer 2 networks, with a TVL of $162 million, an average of 1.62 transactions per second (tps), and a median gas price of 0.001Gwei, equivalent to less than $0.01 in actual cost. There have been 2.12 million transactions in the past 30 days.
Mode Network offers several advantages, such as its use of Optimistic Rollups technology to improve transaction speed and reduce costs. Its modular architecture allows developers to choose and integrate features based on their needs. The ecosystem incentivizes community participation through its token economy model and airdrop programs. It also provides a cost-effective platform for users, particularly in DeFi and gaming, with lower transaction costs and enhanced transaction processing capabilities.
However, Mode Network also faces challenges such as intense market competition, user and market acceptance, and economic and funding risks. It needs to continuously innovate and improve its technology and services to remain competitive and educate the market about its advantages. The project’s development and expansion also depend on external funding, and token value fluctuations may affect its stability and attractiveness.
Overall, Mode Network aims to be a key driver of Ethereum ecosystem growth, providing a faster, more cost-effective, and scalable platform for users and developers. With its technical advantages and market strategy, Mode Network has the potential to play an important role in the future development of the blockchain industry.