# Mode Points Design

## Mode Incentive Design <a href="#mode-incentive-design" id="mode-incentive-design"></a>

#### Introduction <a href="#introduction" id="introduction"></a>

Mode Points serve as a metric to acknowledge and reward early participants in the Mode ecosystem. These points encapsulate a range of activities, including assets on Mode, interacting with applications within the ecosystem, historical engagement across other blockchain networks, and more.

The points formula can be extracted into three terms:

$$P\_u = P\_{R} + P\_{E} + P\_{V}$$

represents the Mode Reward Points user $$u$$ earns during the Mode Sunrise period. There are three ways users can earn points:

* Referral Points ($$P\_{R}$$)
* Ecosystem Points ($$P\_{E}$$)
* Veteran Points ($$P\_{V}$$).

In the following section, we explain each part of formula.

#### Referral Points

Referral Points incentivizes cooperative onboarding activities. These points are calculated by the formula:

$$P\_{R} = ;m\_{RP}\cdot \alpha RP\_{u,t}$$

where $$RP\_{u,t}$$ is the total referral points earned by user $$u$$ at time $$t$$, multiplied by a share multiplier $$\alpha$$ and referral multiplier $$m\_{RP}$$.

To obtain the total referral points earned by user $$u$$, we sum over eligible points $$\tilde{P\_{r}}$$ generated by $$r$$ wallets that have activated user $$u$$'s referral code.

$$RP\_{u,t} = \Sigma\_{r \in R\_u} \tilde{P\_{r}}$$

Eligible points $$\tilde{P\_{r}}$$ are points generated through on-chain wallet activities and do not include referral points so to prevent second-order referral effects.

The share multiplier $$\alpha$$ and referral multiplier $$w\_{RP}$$ are optimized throughout the program.

#### Ecosystem Points

Ecosystem points incentivizes asset onboarding to Mode, along with user activity across various ecosystem protocols at launch. It is calculated by:

$$P\_{E} = \int\_{0}^{T} (m\_{AoM} \cdot AoM\_t + m\_{TVL} \cdot TVL\_t + m\_{Fees} \cdot Fees\_t) ; dt$$

where $$AoM\_t$$ is the amount of total Assets on Mode, $$TVL\_t$$ is Total Value Locked in ecosystem dapps, and $$Fees\_t$$ is sequencer fees spent, aggregated across time.

The multipliers $$m\_{AoM}$$, $$m\_{TVL}$$, and $$m\_{Fees}$$ will be optimized throughout the program to promote sustainable growth of the Mode ecosystem.

#### Veteran Points

Veteran Points $$P\_{V}$$ provides additional points to users who have demonstrated notable activity across Ethereum, Optimism, or Base in the past, inviting active blockchain participants to join the Mode network.


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