A detailed explanation of OP Superchain's popular project Mode Network

Written by: Biteye core contributor Linke

Editor: Biteye core contributors Viee and Crush

01 Introduction

Mode Network is a modular Layer2 based on OP Stack focusing on the Defi track. It adopts Optimism's Bedrock upgrade, which can reduce fees by more than 95% compared to the Ethereum mainnet.

The project received a $5.3 million donation from the Optimism Foundation in January 2024 (in the form of op TokenMode will also donate part of the sorter revenue to the Optimism Collective. Mode maintains a good relationship with the Optimism Foundation, which is conducive to the development of the project.

02 Development Status

Steady growth, TVL ranks at the top

Mode will be launched on the mainnet on January 31, 2024, and will start airdropping points in February.

TVL has been growing steadily since the launch of the autonomous network. As of March 19, 2024, TVL ranked 13th among all Layer2 networks, at $162 million, with an average daily tps of 1.62 and a median GAS of 0.001Gwei, which is equivalent to an actual cost of less than $0.01. A total of 2.12 million transactions have occurred in the past thirty days.

Interactive Guide during Airdrop

Mode Token总量为 100 亿，其中的 5.5% 用于空投，具体的代币经济学还未发布。

Mode started the points airdrop in February and is expected to issue tokens in April. Users can obtain airdrop tokens by accumulating points. If you participate now, you can get benefits in less than a month.

There are currently three ways to earn points:

• Rewards for old users, Web3 old users are usingwalletWhen connected, it will be based on its originalBlockchainInteraction records, obtain certain initial points, and activate the points by cross-chain assets (no amount requirement);

• New user bonus: after activating the points, users can get their own exclusive invitation code, and the inviter will get the points bonus of the invitation code user 16%;

• Ecological interaction rewards, interactive mode ecological applications can also earn points, different types of projects will receive different points rewards.

For developers, Mode implements:

• Sorter Income Rewards

• Developer Airdrop Rewards

• Optimism RPG Funding Rewards

The developer airdrop reward is 500 million tokens, accounting for 5% of the total tokens. The airdrop for developers has nothing to do with most users, so it will not be explained in detail.

The specific interaction process for ordinary users is as follows:

1. Check the airdrop activity page (https://ref.mode.network/MDCKN9) to check the initial points. If you can’t see the points, it will show “INELIGIBLE TO CLAIM", indicating that the user is in a restricted IP and needs to be changed.

2. To bridge assets, users need to bridge assets from other networks to activate points, and ETH is required as the gas fee for the airdrop activity. You can use the official bridge or the third-party bridge to bridge assets. Using the official bridge can only bridge assets from the main network, which will incur higher gas fees, and there is a seven-day waiting period for asset manifestation when withdrawing. You can also choose third-party cross-chain bridges such as MiniBridge (https://minibridge.chaineye.tools/), which can bridge assets from other second-layers to Mode, generating relatively low bridge fees.

CommunityThe administrator said that you need to use the official bridge at least once. It is recommended to use the official bridge first, and then use the third-party bridge.

3. Interactive applications: users can interact with applications on Mode to earn points. Different applications can earn different points. In addition, Mode also cooperates with lrt project. ether.fi and renzo have started cooperation. The lrt projects have relatively high TVL and sufficient funds, which is conducive to improving the TVL of Layer2.

Sharing the "kill two birds with one stone" strategy, you can bridge weETH tokens and ezETH to Mode, and you can obtain staking income, Eigenlayer points, lrt protocol points and Mode points at the same time, which is conducive to improving the utilization rate of funds.

03 Analysis of various dimensions of the project

Team Background

James Ross, Founder, Mode Network

He graduated from the University of Sussex in the UK, majoring in economics and philosophy. He has invested in eigenlayer and ethena, and has served as a consultant at Hashflow.

Federico Sarquis, Technical Lead, Mode Network

Previously organized events for Ethereum Argentina.

In terms of the team, Mode's LinkedIn page has a total of 15 employees, but the number of its core employees is not large. Judging from the employees' bases, they may have adopted a remote working method. Founder James Ross was able to invest in eigenlayer and ethena, so his industry connections should be good.

Technical aspects

Mode is a modular Layer2 network based on OP Stack. Currently, Mode Flare, a Layer3 network supported by Optimism and Celestia, is available. It is suitable for developing on-chain games and trading platforms. In terms of technology, in addition to the concept of "modularity", you also need to understand OP Stack and Mode Flare.

1. ModularityBlockchain

ModularBlockchainFocusing on a few tasks and outsourcing the rest to one or more independent layersBlockchain.

模块化的目的是为了解决Blockchain的不可能三角，即SafetyThe theory of security, decentralization and scalability was proposed by Vitalik, the founder of Ethereum, and is considered one of the criteria for testing public chain projects.

We can see that the three most well-known projects in the public chain track are Bitcoin, Ethereum, and Solana. They have different focuses in the blockchain impossible triangle. Bitcoin has the strongestSafetySolana is decentralized and scalable, but its scalability is almost zero.SafetyIt is definitely the lowest in terms of security and decentralization, but it has the best scalability among the three.

Modularity mainly involves dividing the consensus layer, execution layer, and data availability layer among different chains. For example, settlement is performed on Ethereum, while Celestia is used for data availability, and SVM is used for execution in Solana. Through layered dissociation, different requirements can be implemented on different blockchains, thereby minimizing the impact of the "blockchain impossible triangle".

Layer2 projects that adopt modularity include Mantle, Eclipse, Boba Network, etc. These projects actually have some gaps with the leading Layer2 projects, but they have all won some new development opportunities through modularization.

It can be said that modularity is one of the important narratives of this bull market.

2. Op Stacks

The Stack service launched by Layer2’s leading project Optimism has been adopted by many well-known projects, such as Layer2 Base developed by Coinbase, Debank Chain developed by asset management application Debank, and Farcaster Stack developed by social leading protocol Farcaster. Op Stack has been applied in projects in many fields, which is more in line with the Op super chain concept when Op Stack was first launched.

Op Superchain refers to a decentralized Layer2 network, in which all Layer2 shareSafetyThe Op Stack is a set of open source technology chains that must meet specific standards to enhance interoperability between chains. Layer 2 projects that use Op Stack services should generally be considered a member of the Op Super Chain.

according to L2According to beat data, as of March 10, 2024, the top five projects in Layer2 TVL are Arbitrum, OP Mainnet, Blast, Manta Pacific and Starknet, while Optimism rankscryptocurrencyOptimism ranks 29th in market capitalization and Arbitrum ranks 47th. Its TVL ranking does not correspond to its token market capitalization ranking. The key reason is that Optimism's Stack service is adopted by many project parties while Arbitrum is not. This is the narrative value brought by the Stack service.Therefore, joining Op Super Chain should be beneficial to the development of the project at the moment.

3. Mode Flare

The Layer3 network, powered by Optimism and Celestia, is designed for developers to deploy application chains. It features high throughput, fast deployment, EVM compatibility, flexible technology stack, and transaction fees of less than $0.005. Currently, three projects are ready to be launched on Mode Flare, namely:

1) DEDPRZ, built using $USA tokens and DEDPRZ NFTcryptocurrencycasino

2) Liq Market, decentralized derivativesexchange

3) Macaw, a prediction market for betting on political events or news

Previously, some Layer2 projects have launched Layer3 projects, such as Arbitrum's Xai. These Layer3s are mainly designed for cheaper gas fees and higher throughput, targeting the highly interactive gaming track. Their application value is somewhat inferior to that of Layer2, but as a development direction, their upper limit is not low.

Mode Ecosystem

Next, let’s sort out some of the ecological projects that Mode has launched.

• Ether.fi It is a liquidity re-pledge protocol based on the Ethereum mainnet in the Eigenlayer ecosystem, allowing users to re-pledge ETH or other liquidity re-pledge tokens, generate lrt tokens, and obtain eETH at a 1:1 ratio.

• Ether.fi is the leading protocol in the liquidity re-staking track, with a TVL of US$2.67 billion and two rounds of financing of US$32.3 million. Investors include CoinFund, North Island Ventures, OKX Ventures, etc.

• Renzo It is a liquidity re-pledge protocol based on the Ethereum mainnet in the Eigenlayer ecosystem. Users can re-pledge ETH or other liquidity re-pledge tokens to generate lrt tokens and obtain ezETH at a 1:1 ratio. Renzo ranks third in the liquidity re-pledge track, with Ether.fi in first place and Puffer Finance in second place, with a TVL of US$990 million. Seed round financing Xiaobai Navigation3.2 million USD, with investors including Binance Labs, OKX Ventures, IOSG Ventures, Robot Ventures and other well-known institutions.

• Kim ExchangeIt is the original decentralization of Modeexchange,Depend onCommunityDriven, it provides a customizable protocol that provides greater incentives for users through Mode's sorter fee sharing mechanism, with a TVL of $6.45 million.

• IONIC It is a lending protocol on Mode, supported by Metacartel Ventures, Ohm and Mode. Ionic aims to provide the best interest rate on Mode and has designed a targeted economic model to balance the interests of both borrowers and lenders. The TVL is $61 million. The founder is Henri Mahal and the investor is MetaCartel Ventures.

• Mode Name Service It is a domain name service provided by Space ID. The domain name format is .MODE. As of March 10, 2024, there are 75.7k domain names registered and 70.3k holders in total.

• LogX It is a perpetual exchange that uses Bitcoin and Ethereum for transactions.contractexchange，被设计为一个大型聚合器，将来自不同链的流动性汇集在一起。用户无需管理 Gas 费代币或为每个操作执行多个交易，TVL 为 1121 万美元。

• Poolshark It is a decentralized protocol for directional liquidity, which has been launched on three Layer2 platforms: Mode, Arbitrum, and Scroll. Through directional liquidity, fund pool depositors can create liquidity-only positions. Poolshark can provide limit order trading on dex for professional traders, with a TVL of $595,000.

• Layerbank It is a full-chain lending protocol involved in multiple fields such as LSD, RWA, LRT, etc. It has been launched on multiple Layer2s such as Manta, Bsquared, Mode, Linea and Scroll, with a TVL of US$414 million, of which the TVL on Mode is US$10.11 million.

In general, Mode's ecosystem is mainly based on Defi projects, which have relatively interactive value. Mode is currently working on cooperating with liquidity re-staking projects, which is beneficial to both parties - Mode can obtain more users and funds, and the tokens of liquidity re-staking projects also have more usage scenarios.

04 Modular Layer 2 Competition Landscape

Mode is a modular Layer2 that uses Op Stack services, so other Layer2s that use Stack services or modular Layer2s are selected as comparison objects.

05 Conclusion

Mode is a modular Layer2 project that uses Op Stack and focuses on the Defi track. The Op superchain created by Op Stack has many well-known projects settled in, which is conducive to attracting users to expand the ecosystem. At the same time, modularization is one of the key narratives of this round of bull market. The improvement of public chain performance cannot simply rely on the same public chain. Modularization is conducive to giving full play to the advantages of each public chain. Therefore, modular leading projects have performed well.

In general, Mode is more in line with the current development path of Layer2, and its project results are worth looking forward to. From the perspective of the competitive landscape, Mode also performs relatively well among similar projects, and is determined to become the DeFi Hub of the op super chain. Its future development is worth paying attention to.

The article comes from the Internet:A detailed explanation of OP Superchain's popular project Mode Network

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