Mode Network Quick Bites

• The crypto space is mainly driven by a competitive mindset and lacks collaboration. The industry's cannibalistic mentality is fueled by capital outflows and a lack of new capital inflows.

• Mode Network is an Ethereum L2 solution designed to enhance on-chain cooperation. As the network expands, it benefits its users and developers. One of its standout features is the contract revenue-sharing incentives, motivating users and applications to collaborate.

• The On-Chain Cooperative Model offered by Mode Network could revitalize and restore the collaborative spirit within the cryptocurrency community.

Read This First!

Before we continue, we suggest that you read references below first. It will give you the details from original sources of this article

The State of Current Blockchain and Mode Network

Blockchain Ecosystem is PvP

• The Fat Protocol Thesis suggests that blockchain ecosystems prioritize the value accrual on the blockchain itself over the applications layer.

• This is because the fees generated by blockchain transactions are usually higher than the fees generated by decentralized applications (Dapps), indicating a higher value placed on the blockchain. As a result of this imbalance, there is an excess of blockchain chains but a shortage of successful Dapps.

• This condition made crypto space primarily driven by a competitive mentality, lacking collaboration. Capital outflows and a lack of new capital inflows contribute to this cannibalistic mindset within the industry.

• When the protocol becomes “fat”, it promotes laziness and greed. A protocol should be efficient and focused on growth, while the ecosystem should be flourishing with active participants and creators. This way, it can be a fruitful garden built on cooperation and collaboration.

Mode Network

• Mode Network is an Ethereum L2 solution designed to enhance on-chain cooperation. As the network expands, it benefits its users and developers.

• Mode brings people together to cooperate. To work towards a common goal, be part of something and get rewarded for their contribution.

• The On-Chain Cooperative is the fundamental philosophy of Mode Network, crucial for achieving their mission:

  • Cooperative Game Theory

  • Sequencer Fee Sharing (SFS) at the protocol layer

  • Build on top of Optimism Bedrock

• Mode is designed to provide contract revenue-sharing incentives at the protocol layer. The goal is for applications and users that scale the Mode blockchain to collaborate and receive a share of network sequencer profits directly.

How On-Chain Cooperative Works?

Everyone’s Contribution Matter

• Mode's Sequencer Fee Sharing (SFS) allows developers to register their contracts and earn a portion of Mode's sequencer revenue. This is based on the transaction fees of the smart contracts they deploy.

• Users can refer other users to Mode Network. When a referred user joins Mode, the referrer will receive a portion of SFS based on the transaction fees generated by the referred user.

• When more people start using Mode, it will set off a positive cycle. With an increasing number of users, there will be a greater availability of liquidity, resulting in developers being motivated to create top-notch and innovative products. Developers will not only earn revenue from their protocol but also from sequencing fees.

• At the infrastructure level, this will also help relieve the network burden on the Ethereum mainnet.

Project Built on Mode Network

• The cooperative incentives model of Mode Network is commendable as it has successfully brought on board several well-known protocols to build and support the network. Here is a shortlist of the protocols, and we anticipate the addition of more in the future:

  • Thirdweb - web3 app builder

  • HyperLane - Permissionless interoperability layer

  • Pyth - First party oracle network

  • Aori - Orderbook protocol

  • Spindl - Attribution tools for Web3

  • Kado - On/off ramp platform

  • Biconomy - FWeb3 development and transaction infrastructure platform

  • Tally - Complete DAO Tools

  • Covalent - Blockchain data and unified API providers

  • Snapshot - DAO voting tools

  • Blockscout - Open source tool to explore and analyze on-chain transactions

  • Galxe - Platform to build and grow Web3 community

  • Connext - Cross-chain development platform

  • Mode Domains - name services for Mode Network

  • Jokerace - Community platform and contest/ task creator for web3

  • Metamask - Web3 Wallet

  • Goldsky - Web3 realtime data provider

  • Kizuna - community-driven DEX in Mode

Collaboration is The Key

• Mode Network is in the early stages, but it has some interesting propositions with a theoretically sustainable and rewarding model. It will be great to witness their future development.

• The On-Chain Cooperative Model offered by Mode Network could revitalize and restore the collaborative spirit within the cryptocurrency community.

That’s a Wrap and Thank You!

I hope you enjoyed the articles!

I'm working on improving this newsletter and would love to hear your thoughts on what you'd like to see more of.

Thank you for reading!

Eli5DeFi