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Dialogue with Mode Network: The strongest DeFi L2 is here. How to play after getting the MODE airdrop?

BlockBeats2024/05/22 09:27
By:BlockBeats

Mode Network is a Layer2 network focused on the DeFi field, aiming to collaborate with Optimism to build a superchain. Mode Network will be launched on the mainnet on January 31, 2024, and will start the points airdrop in February. Currently, Mode has started the second season of the airdrop points activity. The total number of MODE tokens is 1 billion, with an initial issuance of 1.3 billion. 35% of the tokens are used for airdrops, 19% for major contributors, 19% for investors, and 27% for foundations. For project dynamics, please follow the official Twitter .


On May 16, BlockBeats talked with James Ross, founder of Mode Network, and Kai, head of the Mode Network ecosystem, to talk about what users can do after getting the MODE airdrop and the development of the Mode ecosystem. The following is the transcript of this X Sapce:


BlockBeats: Welcome everyone to today's Space. First of all, please let the guests briefly introduce themselves.


James Ross:Hello everyone, I am the founder of Mode Network. I have been in this industry for about seven years. I have always focused on the early project construction of the Ethereum ecosystem. I have been engaged in blockchain investment-related work for 5 years.


Kai:Hello everyone, I am Kai, the head of the Mode Network ecosystem. I started a DeFi business in 2016, and then participated in many projects in the DeFi field, such as derivatives trading tracks and DEX. Later, I went to Binance to serve as the head of DeFi for the BSC chain. After that, I came to the Mode team.


BlockBeats: Please also briefly introduce what Mode Network is and why you chose to do this project?


James Ross:Mode is an L2 focused on the DeFi field. It uses OP Stack technology and also joins the OP ecosystem. Our vision is to build the strongest DeFi center for the Ethereum ecosystem and the OP superchain ecosystem. The OP superchain is a very large family, a group of many chains including the OP mainnet Base. Mode Network wants to build an L2 or L3 ecosystem based on OP Stack. Mode Network is focused on the DeFi field, so it will try to create more DeFi application scenarios, including some new DeFi assets, to bring more profit opportunities to the entire industry.


Kai:OP is now more and more focused on launching more L2. Mode Network has taken over the role of DeFi center (infrastructure support) in the OP mainnet. So, including Velodrome, which started to deploy on Mode two days ago, the ecological projects on the OP mainnet will also be deployed on Mode slowly. We are actually very close to the Base ecological project and often communicate with each other. Now some teams can choose to deploy on Mode first, and after we help incubate the project, they will deploy to the Base chain. We have been committed to working with Base and OP to promote the development of the OP superchain.


BlockBeats:Mode Network has just completed the airdrop. Can you share Mode's next incentive plan? What can users who have received the airdrop do?


James Ross:Yes, Mode has just completed the first quarter airdrop and has now started the second quarter airdrop. Through two seasons of airdrops, Mode has a lot more users, more on-chain transactions, and a higher TVL (total locked value). If you participate in the Mode ecosystem now, you can see more assets appearing in the ecosystem for everyone to borrow, trade, etc. Now there may be more new and complex applications added to the ecosystem, allowing players to try various DeFi strategies and bring more profit opportunities to users. A more important point is that Mode will connect to more blue-chip DeFi projects. As mentioned above, Velodrome will also be deployed on Mode, as well as Uniswap V3/V4, and more blue-chip lending protocols will be launched soon.


Kai:Yes, one way of playing is more common, for example, users can first pledge after getting the airdrop; the second way of playing is to put the MODE token on DEX, or a lending protocol, or a mining protocol. Some games use MODE as a currency standard, such as as a game currency in the game, and users use MODE to buy equipment, etc. In the next week or two, more and more applications will be launched, and MODE will be one of the special tokens. So basically there will be three development directions: staking, earning tokens in existing ecological projects, and developing some new ecological projects to create application scenarios for MODE tokens.


BlockBeats: At present, there are public chains such as Canto, Osmos, and dYdX focusing on DeFi in the crypto market. Why does Mode still choose to focus on the DeFi field?


James Ross:If we look at the successful projects in the crypto industry in the past, the most successful ones are often DeFi projects, there is no doubt about that. Starting from Compound, to Aave, Uniswap, after several cycles, the DeFi projects that still survive in the market are all DeFi projects. DeFi is one of the few areas in the crypto industry that has found product-market fit (PMF)


DeFi is a field at the entrance of the market. In fact, this field has also seen a lot of innovation in the past period of time, including innovations in asset forms, such as the emergence of LSD or LRT projects, including the RWA track derived from stablecoins. On the basis of these new assets, everyone has created some new DeFi strategies. However, there may be a relatively large gap in the OP super chain ecosystem. This ecosystem lacks innovation, including in terms of assets, income strategies, etc. There are not many developers who build new gameplay on these new assets.


The concept of super chain is that various chains based on OP Stack are connected to each other, and the assets on these chains will circulate with each other. Assets will definitely flow to where the highest returns are, and similarly, assets will flow to Mode. In the future, Mode will become a DeFi center, or a revenue center, in the OP superchain, where users can do various lending transactions, etc. We actively promote the development of the Mode ecosystem, and it is also very effective in many aspects.


Kai: Mode's core competitiveness is that we are an ecological infrastructure maniac. Many L2 projects are slow in building ecosystems, and the ecosystem has not been established after 1, 2, or 3 years. Many ecosystems have a high starting point, but the overall efficiency is particularly low. Whether as builders or founders, time cost is very important, so we build ecosystems or launch assets very quickly. Basically, if an asset is determined, it will be spread throughout the ecosystem within a week or two, and the assets will be integrated and applied. We know which scenarios each asset is suitable for, and when a new application appears on Mode, how it cooperates with other projects in the ecosystem, and what new gameplay or product forms may be derived.


The second point is that Mode Network started out based on the OP ecosystem. In addition to Base, we also received a lot of financial support from OP. But we are not limited to this. We also cooperate with the BTC ecosystem and stablecoin projects. We can see more new tracks, new hot spots and new opportunities, and we can act quickly. Whether it is LRT, BTC ecology or stablecoins, we have caught up with the trend of the past three or four months, and we will grasp the new development direction more quickly in the next few months.


BlockBeats: Mode is closely connected with ecological projects. Will you participate in specific project communications?


Kai: We do have deep relationships with many projects. Many people think that this is the job of BD. Once the project is connected to the Mode ecosystem, it's done. But in fact, the focus of the work begins after the project is deployed, how to help them do marketing and help them grow in the ecosystem. It is true that we maintain very close communication with most project parties, so once there are some new directions or new opportunities, we can quickly pass this opportunity to the project. This is why we can often grasp this information. Not only are we supporting projects, but the projects are actually giving us very important market feedback.


BlockBeats: In the past period of time, the Mode ecosystem has also developed a lot. Can you share with us, in addition to the LRT protocol, what DeFi projects are worth paying attention to in the Mode ecosystem?


James Ross:I think the key point for us is to work closely with large projects and native projects on our Mode. For example, Atlendis is a good project, which is a privacy credit solution. In addition to the RWA project that can be developed based on it, we also have a stablecoin project backed by government bonds that will be launched soon. In addition, we are working closely with many developers to develop new lending protocols, and we are about to work with Ethena to introduce Ethena Protocol's stablecoin USDE more quickly. There will be a lot of cooperation with other projects in the future, and some new forms of lending protocols are being developed.


I think Velodrome is also very worthy of attention and will be launched on the Mode ecosystem soon. Velodrome's economic model has proven to be very successful on OP. Aerodrome on the Base chain is also capable of competing with Uniswap, so we are very excited to work with such a team. We have also launched an accelerator, and the team is also actively developing native projects.


Kai:There are many subdivided areas in any track, such as lending. In addition to the basic Compound V2, there are also various lending products. When it comes to lending, everyone’s first reaction may be to build blocks, but you still need to know which blocks can be built. When the blocks are built, some new things may come out. Then it is not just building blocks. Two blocks together are completely different forms, so we are also making many attempts in this regard.


There are also dozens of projects in our accelerator. In the next one or two months, there should be more than ten to twenty projects launched, and each project has at least one innovation. So we also focus on making some relatively innovative and interesting products. Of course, because it is a relatively new product, it needs to be polished or needs to go through several rounds of testing. But I think it is worth it. If everyone only does things that have been verified, there will be no innovation.


BlockBeats: Mode has its own native DEX and lending protocols. How do these native protocols compete with old DeFi projects?


James Ross:There are two main ways for the DeFi ecosystem to grow. One is to make the protocol safer by adding security measures. The cost may be more redundant governance or more centralized governance. We will see that many large blue-chip projects are very secure and highly decentralized, but their yields are not very high. For example, Aave or Uniswap, they often have very high TVL and a lot of funds in the pool, but the yield may be only 3%. This is a common phenomenon at present. Large projects must first ensure security, and users with large funds will also feel that they need more security and can give up some benefits.


For some native new protocols, they are not very mature and not so decentralized, but the yields of these protocols are much higher, because they want to attract users from large projects, so their returns must be higher. So I think we will continue to see competition between these two different types of protocols, just as we see competition between large companies and start-ups. These new protocols need to come up with various different strategies to make their returns higher, otherwise it will be difficult for them to continue. The DeFi ecosystem needs such experimental projects to constantly come up with new ways of playing.


If you look at the problem from the perspective of start-ups and large companies, the speed of innovation of new DeFi protocols will be faster, and the entire team can easily make quick adjustments based on some new needs in the market. Therefore, an obvious shortcoming of large projects in terms of development is that they are not so fast, which provides many opportunities for these start-ups. For the native Dex and lending projects in the Mode ecosystem, we are very confident that innovation is the main driving force for the development of projects.


Kai:As a chain, Mode mainly needs to provide soil. Whether it is a large or small project, the key is to make participants feel that this is an ideal place to promote their growth and a place suitable for the development of their projects. In the end, the outcome of the competition will depend on the strength of each person. In addition, we also need to attract a variety of users, who may differ in terms of capital scale and risk preference. In fact, although various projects compete in some aspects, they are targeting different vertical markets in other aspects. Everyone needs to find their own positioning and target customer base. From a broader perspective, whether it is the Mode ecosystem, the OP ecosystem, the entire Layer 2 or Layer 1, I think this market space is much larger than the current size of Mode. So I don’t think competition is a problem that we need to pay too much attention to at present. We should focus on maximizing the potential of everyone and increasing our market share.


BlockBeats: Mode's TVL has grown rapidly recently. At present, it seems that this is mainly driven by the demand for LRT income. After the EIGEN token airdrop is over, how does MODE plan to bring income to these LRT in the future?


James Ross:Even after the EIGEN token airdrop is over, the LRT heat will continue for a while, and there will be a lot of hot discussions around Eigenlayer's points. In addition to the EIGEN points in the second quarter, there is also the upcoming AVS. The market's expectations for AVS are not high, perhaps because people don't know enough about AVS, or are not particularly optimistic about the prospects of AVS. However, the various AVS chains issued based on Eigenlayer should provide more incentives for LRT users. Therefore, this is the main factor in the growth of Eigenlayer's revenue, encouraging everyone to continue holding LRT. The Mode team is also actively introducing more assets to provide new opportunities for LRT or other assets, including new interest-bearing stablecoins and synthetic stablecoins based on physical assets, mainly in the form of RWA. Based on these new assets, more new applications will be introduced to increase existing revenue.


Kai:LRT is an asset that has certain returns, but we are also considering how to give more returns to such assets or improve capital efficiency. I want to use LRT as an acceptable asset in a pool similar to Curve. Many pools only accept USDT and USDC. If LRT can also be accepted, then these LRTs can earn LP returns in addition to their own returns. We are also communicating with some games to see if we can connect to LRT to make the economic model of the entire game more sustainable. These LRT users can obtain some of the revenue in the game.


BlockBeats: Mode Flare is undoubtedly a highlight of Mode. Can you briefly introduce Mode Flare? Based on MODE as a DeFi L2, why do we need more DeFi L3 application chains?


James Ross:In addition to allowing teams to obtain higher TPS and faster settlement speeds, a very critical point of Layer 3 is customization needs. Many teams are not necessarily satisfied with DeFi's focused L2. They may need more customized functions, such as using custom tokens as Gas fees and being able to choose different chains. You can choose Celestia or EigenDA, which will benefit teams that need high throughput and low Gas.


Although the scalability of L2 is quite good at present, L3 will have a lot of room for customization. Of course, all the final transactions will be settled on Mode. There are already five L3s in the testnet stage, and more L3s will come out later. The efficiency of the Mode team is very high. I think more projects will choose to deploy and issue on Mode L2 first.


BlockBeats: Thank you very much for sharing today. I have a more comprehensive understanding of Mode Network. Do you have anything else you want to convey to the Chinese community or want to add?


Kai: I think the main problem of the crypto market now is to return to the construction of the ecosystem, especially in terms of infrastructure. There has been a serious homogeneity at the technical level. It feels that many strategies, whether it is the points system or other aspects, are actually very similar. But I am thinking that in three months, six months, or even a year, there may be 10, 20, 30, or even more L2s that will rise rapidly. What will be left after this? I hope we can still continue to build real things at that time. We really want to build a very complete and prosperous ecosystem. We will be involved in all the projects and products on OP, and then make further innovations on this basis.


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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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