The New L2 “Mode” — Is it worth participating for the airdrop?

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Mode is the newest L2 on the block. Launched on the 1st of Feb 2024, it has already accrued more than $50M in TVL and around 30k users in just a few short days.

Mode is following the Blast/Manta points playbook, with users eligible to earn points to share in 550M of $MODE tokens (5.5% of the supply) to be made available in April 2024.

With the number of L2s increasing seemingly every day, is it worth participating?

What is Mode?

Mode is an Ethereum Layer 2 rollup building on the Optimism stack. The chain and ecosystem around Mode is quite limited currently, consisting of a couple of DEFI platforms (Kim & Ionic) and a Mode Name Service. As per Mode’s whitepaper, Mode’s goal is:

….to empower developers and users to grow an ecosystem of world-class applications and be directly rewarded for their contribution.

The whitepaper is light on the overall details of what exactly this ecosystem will look like, but currently seems to be focused mainly on DeFi.

Like Blast, the go-to-market strategy of Mode is focused on bootstrapping the network using an airdrop to attract capital and interest. From there, presumably, the team will start to focus on differentiating their L2 from the current list of more than 10 building on Ethereum currently.

How can you qualify for the airdrop?

To qualify for the Mode airdrop, users must first navigate to the Mode landing page and complete three actions:

1. Enter an invite code (My code is 2KIyy9 or you can use this link directly). Alternatively, you can check Discord or Twitter for other referral links
2. Connect your Twitter
3. Connect your wallet to get your initial points allocation

Note: This will give you an initial points allocation, but you will not receive the points until you bridge funds onto Mode

Mode landing page

Mode will then calculate an initial points score, which is based on previous activity on your wallet. Points are given for interactions across the following:

• DeFi — users of DeFi apps
• NFT — holders of NFTs
• Scaling — users of Layer2s
• OG — users of OG DeFi apps like Maker, Curve, Yearn
• Degen — users of leverage apps
• Yield — apps that give users yield

If you do elect to bridge onto Mode, you receive these points and can earn additional points based on the following:

1. The amount bridged to Mode

Like Blast and Manta, the more you bridge onto Mode the more points you earn. Currently, you can only bridge ETH, USDT, and USDC. You earn points relative to the time these assets remain on Mode (with points distributed hourly).

2. Referrals

Once you bridge onto Mode, you will receive a referral link. For every person who signs up with your referral link, you collect 16% of their points.

3. Interacting with ecosystem apps on the network and (eventually) completing questions

Points are earned for transactions on ecosystem Dapps. Currently, the list is quite restricted, with only Kim Exchange and Ionic currently live for DeFi. On Kim Exchange, you can swap tokens to earn points, and on Ionic, you can borrow and lend to earn points. Additionally, you can buy a Mode name through Mode NS.

Screen showing how you can earn points

Is it worth participating?

Pros:

• Potential for a decent-sized airdrop: Manta recently did an airdrop, with their token now sitting at ~3B FDV. If you have high conviction on Mode and its founders, it's possible that the MODE token could have a high valuation like Manta
• Short time to the airdrop: Mode is committing to an April timeline for an airdrop, meaning that capital will not need to be deployed in Mode for a large amount of time
• Can withdraw funds: Unlike Blast, users can bridge out their funds from Mode. However, to note is that withdrawals will take 7 days (which is standard for L2s utilizing Optimistic proofs).

Cons:

• Points system currently favors those with large amounts of capital: If you are attempting to bridge with a small amount of capital, you will likely get a much smaller allocation than a whale depositing large amounts of funds
• ETH L1 gas fees: Depositing to Mode will require you to move funds onto ETH L1 and then bridge up to Mode. Gas fees on ETH are expensive (particularly if you do it at a high usage time)
• Bridge hack risk: Given Mode is a new chain, there is a risk that their bridge is hacked and users lose funds. As a general point, bridge contracts are one of the highest-risk areas in crypto for hacks (see for example the Ronin bridge hack). While there is currently no specific indicators that Mode’s bridge is particularly vulnerable to a hack, this should be a factor to consider anytime you interact with a bridge contract

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