3️⃣3️⃣ 3️⃣ 3️⃣ 3️⃣ 3️⃣ 3️⃣ 3️⃣ Season 3
Season 2 Airdrop Now Claimable!
The Season 2 airdrop is live! You can view your allocation and claim your rewards directly through the Mode Dashboard.
Claim Period:
Opens: 18 Oct, 18:30 UTC
Closes: 29 Nov, 23:59 UTC
Check your wallet in this document for any vesting details.
Season 3
Follow all the voting periods and important dates adding the Governance Calendar
Introduction
Welcome to Season 3, where we introduce a new system for community-driven decision-making using veTokens (Vote Escrow Tokens) and gauge voting. This governance model empowers users to participate actively in directing the distribution of community incentives, promoting the growth and sustainability of the Mode ecosystem.
Our governance model includes two types of veTokens (veTKNs) for participation, each influencing a separate reserve of incentives. Participants can stake either or both types of veTokens to gain voting power and shape the allocation of incentives across various ecosystem protocols. Additionally, users who stake and vote will be eligible for OP rewards based on the amount staked and voting activity.
How the Governance Model Works
Types of veTokens (veTKNs):
Mode’s governance uses two types of veTokens, which users can stake to participate in governance:
veMODE: Acquired by staking MODE tokens. The longer a user stakes veMODE, the more voting power they accumulate with each passing epoch.
veBPT: Obtained by staking an 80/20 MODE/ETH Balancer Pool Token (BPT). Similarly, the longer veBPT is staked, the more voting power the user gains over time.
Both veTokens allow users to participate in gauge voting and direct the distribution of incentives. Users have the flexibility to participate with either veMODE or veBPT, or both, based on their strategy and commitment. veMODE and veBPT will each direct a separate allocation of incentives (10:1 ratio), so vote power will be independent for each.
Voting Power and OP Rewards:
Voting Power: It increases over time as users stake their veTokens. The longer the staking period, the more voting power users accumulate, allowing them greater influence in governance decisions.
OP Rewards: Users who stake their veTKNs and vote will be eligible to claim OP rewards each epoch. The rewards are based on the amount staked and whether the user voted in the prior epoch.
How Voting Power Increases Over Time
Voting power in Mode Governance is designed to reward long-term commitment and active participation in governance. The longer a user stakes their veTokens, the more voting power they accumulate over time. This mechanism encourages sustained engagement and allows participants to have a more significant impact on governance decisions.
Epoch-Based Growth: Voting power is calculated on an epoch basis, with each epoch lasting two weeks. As a user continues to stake their veTokens (either veMODE or veBPT), their voting power increases progressively at each epoch.
Growth Multiplier: The growth of voting power follows a defined multiplier that scales up over the course of the six epochs:
Epoch 1: Base multiplier of 1.
Epoch 2: Multiplier increases to 1.43.
Epoch 3: Multiplier increases to 2.14.
Epoch 4: Multiplier increases to 3.14.
Epoch 5: Multiplier increases to 4.42.
Epoch 6: Multiplier reaches 6.
This multiplier means that if a user stakes their veTokens from the beginning of Season 3 and keeps them staked, their voting power will be 6 times greater by the end of the final epoch compared to the first epoch.
Increase in Allocated Emissions Over Time:
The total incentives for Season 3 are distributed over 6 epochs, with a gradually increasing allocation to encourage continued engagement throughout the season. The allocated emissions grow slightly between each epoch, creating a steady growth curve that rewards consistent participation.
Emission Growth Per Epoch:
Epoch 1: Emissions start at a base level of 1x.
Epoch 2: Emissions increase to 1.08x.
Epoch 3: Emissions increase to 1.2x.
Epoch 4: Emissions increase to 1.38x.
Epoch 5: Emissions increase to 1.6x.
Epoch 6: Emissions peak at 1.88x.
This growth pattern ensures that the incentives distributed across the governance participants continue to grow over time, encouraging users to stay staked and actively involved in the voting process. It also ensures that as participation and engagement increase, the rewards distributed match the level of commitment from the community.
Voting on Eligible Protocols:
Each epoch, users vote on a list of eligible protocols that have applied to be included as options in the gauge votes. These protocols compete for a share of the community incentives reserved for their growth and development.
Gauge Voting: Users allocate their veMODE and/or veBPT tokens to vote for their preferred protocols from the eligible list. Voting occurs every 2 weeks over a total of 6 epochs spanning 3 months. Assigned votes do not reset each epoch, so voters who have previously assigned votes will not need to manually vote each epoch unless they wish to reassign votes.
Incentive Distribution: Incentives are distributed in each epoch based on the previous epoch's results. The more votes a protocol receives, the larger its share of the incentives.
Incentive Distribution to Protocol Users:
Protocols that receive incentives from the gauge votes are responsible for distributing these incentives strategically to their users to promote growth and adoption.
Restrictions on Reward Usage: Protocols cannot use the rewards to incentivize further governance participation (OP bribes, incentivizing Mode voting meta-vaults with OP, etc) . They must use the rewards to incentivize user actions that facilitate protocol growth, such as providing liquidity (LPs), trading activity, borrowing/minting from collateralized markets, etc.
OP incentives distributed via channels other than Merkl/Fuul need to target assets on Mode and must be claimable/distributed on Optimism Mainnet. OP cannot be sold and then distributed (https://gov.optimism.io/t/collective-grant-policies/5833).
Strategic Allocation: Protocols should use Merkl or Fuul to distribute incentives. If other distribution channels are used, they must be clearly stated and include a way to communicate transparent metrics to ensure accountability and fairness.
Address Used to Distribute: Protocols should use the same 0x address they listed on their Eligibility Form on the Forums (https://forum.mode.network/c/governance/6) to distribute rewards. This ensures better transparency throughout the distribution pipeline.
Driving Adoption: This approach ensures that incentives are not only allocated to protocols but are also used to foster real growth and user engagement within the ecosystem.
Initiate Campaigns Within 14 Days: Protocols should set up campaigns to distribute rewards within 14 days of receiving incentives to remain eligible to receive rewards in future epochs. Length of campaigns are at the discretion of the protocols.
Epoch Timeline and Process Flow
Each epoch consists of a detailed process flow to manage protocol applications, voting, incentive distribution, and the cooldown period. Epoch changeovers occur every other Thursday at 00:00:00 UTC. Voting deadlines are on Wednesday.
Staking goes Live Users and protocols are able to stake to prepare to vote in the first epoch to be eligible to earn OP rewards.
3-Day Protocol Application Period (Prior to 1st Epoch): Protocols apply for eligibility to be included as options in the gauge votes for the initial epoch.
3-Day Setup of Initial Gauges: The Governance Council reviews applications and sets up initial gauges that will be included in the voting process.
Warm-Up Period: A minimum 3-day warm-up period precedes vote eligibility. Warm ups can be up to 6 days if staking well before an upcoming epoch changeover. Staking Deadline is 23:59:59 UTC the day before the voting period as staked positions must at least be In Warmup prior to epoch changeover to be eligible
7-Day Voting Window (Epoch Voting): Users with staked and warmed up veTKNs vote on their preferred protocols during this period.
3-Day Eligibility Window for New Protocols (Future Epochs): After the voting window, there is a 3-day eligibility period during which new protocols can apply to be included in future gauge listings.
4-Day Buffer Window: A buffer window allows for the addition of new protocols to the gauge options if applicable. During this time, the Governance Council finalizes and prepares for the next epoch.
Cooldown Window (2 Stages):
Stage 1: Users can request to withdraw their staked veTKNs at any point during the Voting period if they don’t have votes active in the gauge. When a withdrawal request is made, the user’s votes are reset (removed) from the gauges, and their NFT representing the staked veTKNs is transferred to an exit queue.
Stage 2: After a waiting period of ~3-6 days, users can return to the platform to retrieve their tokens. Retrieving the tokens burns the NFT from the exit queue. There are no restrictions on when users can complete this stage, as the votes have already been removed once the withdrawal request is initiated.
Maximum time for users to wait to withdraw would be up to ~13 days: Distribution period (~6 days) + Voting period (~7 days).
Minimum time: 3 days (within Voting period)
Incentive Distribution (Each Epoch for Prior Epoch Results): Incentives are distributed each epoch for the results of the previous epoch. This involves two separate distributions to the selected protocols.
OP Rewards Claimable (Each Epoch): After each epoch, users who have staked and voted during the previous epoch can claim their allocated OP rewards. The rewards are based on the amount staked and whether the user voted in the prior epoch.
Step-by-Step Guide to Participate in Governance
Acquire MODE Tokens or BPT Tokens:
MODE Tokens: Available on both decentralized and centralized exchanges where MODE is listed.
Balancer Pool Tokens (BPT): To obtain BPT tokens, provide liquidity in an 80/20 MODE/ETH pool on the Balancer platform.
Stake Your Tokens:
Stake MODE Tokens: Visit gov.mode.network to stake your MODE tokens and receive veMODE tokens, which will grant you voting power.
Stake BPT Tokens: Stake your 80/20 MODE/ETH BPT tokens to receive veBPT tokens, which also provide voting rights in the governance process.
Staking Deadline is 23:59:59 UTC the day before the voting period to allow enough time to warm up to vote
Accumulate Voting Power:
Voting Power Growth: As you stake veMODE or veBPT tokens, your voting power grows with each passing epoch, rewarding longer commitments.
Monitor Your Stake: You can track the growth of your voting power and adjust your strategy to maximize your influence in governance.
Vote on Eligible Protocols: Use your accumulated voting power to vote on your preferred protocols from the eligible list during each epoch's voting window.
Incentive Distribution and Rewards: At the end of each epoch, incentives from the reserves are distributed to the protocols based on the votes they received. Protocols then allocate these incentives to their users strategically to promote adoption and engagement.
Claim Your OP Rewards: As you continue to stake and vote, you become eligible to claim OP rewards each epoch based on the amount staked and whether you voted in the prior epoch.
Unstake When Needed: You can unstake your veTKNs at any time, which will enter a ~3-6 day cooldown before withdrawal . Be aware that unstaking will result in the loss of all accumulated voting power and eligibility for further OP rewards, so consider your strategy carefully.
Benefits of Participating in Governance
Flexible Participation: Choose to stake either MODE or MODE/ETH BPT tokens, or both, based on your strategy and preferences.
Active Role in Ecosystem Growth: Directly influence which protocols receive incentives, driving the growth of projects you believe in.
Rewards for Engagement: Earn OP rewards by actively participating
FAQ
How do I see how much MODE or BPT that I have staked?
Select “Contract” -> “Read Contract” -> “2.getTotalStaked”
Input your wallet address in the “_account (address)*” field
Click on “Read”
The output will be the amount of staked mode with 18 zeros. Hover over this number, and it will show the staked amount.
It will show “ETH” as a ticker; just ignore it. This number equals staked Mode on the selected wallet.
For BPT: To check staked BPT, repeat the same steps but on a different smart contract: https://explorer.mode.network/address/0x394E9C0b312f0013653d764522bA17207eE97D9B?tab=read_contract
Additional FAQs can be found here: https://forum.mode.network/t/season-iii-faq/36
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