In today’s edition, we’re briefing you on Mode Network, a OP-stack L2 looking to play a huge part in expanding the OP Superchain, alongside Base and Optimism mainnet.
The chain, which plans on launching it’s mainnet very soon, places an emphasis on giving both users and developers predictable and scalable incentives.
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What is Mode?
Mode Network is an L2 built on the OP stack architecture.
The team spent time redesigning the economic and social layer to enable clear incentives for growth.
James Treacher is the Founder of Mode Network, and previous co-CEO of Hype.
He ran an organization called Hype which supported some of the leading crypto ecosystems in their growth including BNB Chain, Algorand, Difinity, NEAR, EigenLayer, Sei, Sui and others.
James thinks there should be a lot more focus on incentives for users and developers to align with protocol growth.
Currently, incentives are unclear for developers to launch new dApps on a new chain; Mode aims to simplify this and make incentives clear.
Developers will be rewarded for creating dApps that successfully accrue TVL and DAU.
Following a 3 month testnet stint, the project recently moved to dev mainnet and plans to deploy on public mainnet very soon.
James says that the primary challenge is less so what the team is focusing on and more so navigating against competition in the space.
He believes there are a couple of different L2s entering the market: tech-first chains and distribution-first chains.
Mode places itself into the distribution-first camp, considering Base and Blast to be in this category as well.
Tech-first chains include those implementing zk proofs and data availability layers.
As compared to tech-first chains, Mode aims to solve problems like user onboarding.
The team's focus is building a core community of users, developers and community builders, as well as ensuring a smooth roll-out.
Subli, Optimism Ambassador & Founder of The Optimist says that focusing on distribution is quite common nowadays, mentioning the rise of friend.tech and Blast.
RetroPGF & Incentive Management
He says there is a bit of chaos when it comes to projects deciding how to distribute their $OP RetroPGF grants.
James believes there's not necessarily a right or wrong way to distribute rewards.
Some projects may not be included in the RetroPGF program as they may have issues with project awareness; this highlights the importance having an impact in an ecosystem plays, which can be hard to track.
Mode aims to create an incentive system which is very predictable.
Developers on Mode could build a dApp and scale it to e.g. 100 users, and qualify for sequence fee sharing, perhaps earning $100.
This can give developers more insight and incentive to scale their products, where as historically it has been relatively unclear how much of a return projects in crypto might see relative to their scaling.
James believes a given chain is only as strong as the sustainable applications built on said chain.
This scalable system applies to users as well; referral fees denominated in $ETH will be implemented. Distributions will occur every two weeks.
Mode prioritizes growing the network, valuing transaction volume and TVL; this is easier to measure than Optimism's grant program which rewards impact on the ecosystem.
Subli brings up that Mode's incentive sharing system could really help rising projects find funding, rather than having to bootstrap initially or raise from VCs.
What to Expect at Launch
James also says Mode can help projects build their userbase initially, as well as help scale. These mechanisms will be in place as the chain begins public mainnet.
Projects could reinvest their sequencer fees, creating a flywheel effect. Projects have to be attracted to build on Mode first, and then users.
According to James, Mode has built some good connections with early builders in the DeFi ecosystem to discuss interesting ideas to build. They have received good feedback, and have some interesting apps launching.
Mode has been reaching out to 100+ top developers at key projects to learn what's important when deploying to a new network.
Users could see Mode as a new network with a lot of upside potential for growth, being aligned with the Optimism Superchain. The Superchain is a network of L2s built under the OP Umbrella, which share security, a communication layer, and are all built on the OP Stack.
James expects Mode to be the 3rd largest Optimism Superchain team, behind Base and Optimism Mainnet.
Initial Approach to Building a Blockchain ecosystem
Subli mentions that often times, DeFi projects go to a new chain because it has a lot of users; of course, this approach is not helpful for new chains who want to attract users as well as developers.
Mode can combat this by directly helping new projects have a clear way to scale. The team has already started working with teams to get them excited and ready to deploy on Mode after telling them about their launch strategy. In 2-3 years, there may be other groups that can support dApps, but initially, it's important that every app on Mode is very successful.
James observes that some chains spread themselves too thin, seeing 100, 200 etc. apps launch. Specifically, Mode wants the 1st 3 apps to be amazing for users, rather than focusing on # of projects deployed.
A good DEX, lending protocol, and perps or leverage-enabling protocol is seen as key for a blockchain ecosystem. James also brings up that it's important for a chain to have native innovation, giving Arbitrum an example with their innovation in the space of derivatives.
With this in mind, Mode encourages developers to deploy their crazy ideas. Mode is launching a hackathon to support this effort.
James highlights the immense difficulty of growing a DeFi dApp.
For dApp developers, the main problem is distribution, not necessarily technical issues; there are a lot of great dApps that simply don't have users. This is because there's a lot more competition and these projects often don't get much support from their ecosystems, something Mode aims to help out with.
Mode Network also has an ambassador program, of the 1,000 applicants, 40 were chosen with 18 being technical and 22 non-technical. The goal is for these people to be an extension of what the Mode core team is doing by communicating with different groups in the DeFi ecosystem. Technical contributors may beta-test projects and give feedback, while non-technical contributors may find themselves translating materials, generating images, creating memes etc.
Future of Mode Network
The devnet saw around 600 deposits, as well as Mode's Oracle and Indexer partners deploying.
By mid-December, the team might be ready to make a call on when they'll deploy. The team plans to run a public campaign within the next 2-4 weeks, give or take. In January and February, the team will push forward with ecosystem growth and scaling the ecosystem.
In 6-12 months, James expects Mode to be a key part of the Optimism SuperChain, as big as Base or Optimism Mainnet. They want to continue working even closer with the Optimism and the ecosystem at large.
They plan to be a key contributor in both technical and non-technical aspects, and would be pleased if Mode's features and products could be integrated across all OP L2s.
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