Why I'm Bullish on Mode and How I am Farming it

Gm Degens

I’ll be honest, most L2’s Im kinda bearish on. They fail to capture value or have the ponzi like structures to make massive multiples. There are of course exceptions but the vast majority of the L2s we see coming to market, in my opinion, fail to get any PMF.

The leaders will continue to lead - the likes of Arbitrim, Base and Optimism have done well and their ecosystems will likely continue to do well. We do however have a ton of newer L2s on the market and two are interesting to me, Blast and Mode. Today, we’ll focus on Mode because of a few key features that I think people have really caught onto just yet. In addition, their airdrop just dropped today, season 2 has just started so some more rewards are coming our way in due time.

Firstly, what is Mode?

Mode is a new OP stack L2 chain thats part of the Optimism Superchain. Another one, who cares right?

Well theres some key elements to Mode that really caught my attention and I’ll outline them below.

1. Revenue share with smart contracts

2. Revenue share with referrals

3. Native ETH yield - via Redacted’s pxETH

4. Native stable yield - via Ethena’s USDe / sUSDe

Sequencer fees

Mode have gone in a different direction to other L2’s. Yes they still have a centralised sequencer as they’re an OP stack chain but what they’re doing that is interesting is they are sharing the revenue that comes from the sequencer to builders on Mode. In that way, developers can earn from the transactions that occur on Mode. This is a bonus incentive for them to make apps that people enjoy transacting on.

More transactions = more revenue.

The idea is this attracts more apps for builders to build and therefore makes a better overall ecosystem. Mode don’t need to give token incentives, instead the sequencer rev share is enough of an incentive for builders to come.

Referrals

Secondly, Mode have realised that importantance of getting users on board. Why would you care to get people onto another L2 chain when we have so many? Incentives! Users can refer other people into Mode and get a share of their sequencer fees forever! For bigger accounts, this creates a system where they are incentivised to get their communities and followers into the Mode ecosystem because they profit from others transacting there. A new income source for users themselves.

On that note, if you haven’t used Mode before, use my ref link (zYpNT9) - I get a little bonus so you can support me!

https://ref.mode.network/zYpNT9

Native yields

Like Blast, Mode have found an opportunity to make idle assets earn revenue. ETH within Mode will be earning via Redacted Cartels pxETH - one of the highest yielding LST ETH derivatives curtsey of its two token design. This means ETH within mode will be earning at least 5-8% APY which is a nice incentive for users. Secondly USDT/USDC will be earning via Ethenas sUSDe which in the bull market when ETH demand is high, should earn a significant amount because of funding rates.

My thoughts

Personally, these 3 reasons make me bullish on the Mode ecosystem and so it’s likely a place where I will continue to park funds for especially because there will be another season for airdrops. A nice way to earn is via LRTs, Kelp, Renzo, EtherFi - whichever you can tolerate the risk with and this is a nice way to earn 2 in one or even 3 in one airdrops if you use these assets on some of Modes native apps.

Let me know your thoughts! Do you like Mode? Are you farming it? Hopefully we can continue to get some more airdrops along the way too!