We are pleased to announce that V0.1 of our Sequencer Fee Sharing (SFS) module has been deployed to the Mode Testnet. Mode’s mission is to build an on-chain cooperative that rewards the developers, users and protocols that grow the network and the deployment of SFS is a significant step forward in realising this vision.Note: Mode’s SFS module is inspired by revenue-sharing implementations from Fantom, Archway and Canto. The V0.1 of Mode’s SFS implementation uses open-source code from Canto’s contracts.
What is the Sequencer Fee Sharing module?
Roll-ups such as Mode earn revenues from the network sequencer. With Mode’s SFS module developers can register contracts and receive a proportion of Mode’s sequencer revenue based on the transaction fees of smart contracts they deploy.
How does Sequencer Fee Sharing work?
As Mode is a roll-up two calculations must be made to determine the fee shared with developers, the first when a transaction is made and the second after the transaction has been sequenced. Fees can then be distributed to registered smart contracts and will be claimable every 2 weeks in ETH.
In SFS V0.1 we are using an off-chain module for fee sharing calculations and distributions.
IN SFS V1 (to be released Q4 2023) Axiom smart contracts will be deployed and use ZK proofs to verify sequencer fee calculations and distributions ensuring a fully on-chain process.
The proportion of sequencer fees that developers will receive will be confirmed in the next few weeks after internal modelling has been completed.
How do developers register for SFS?
Developers can earn a share of the network sequencer fees by registering their contracts in the Fee Sharing Contract (based on Canto's Turnstile.sol) deployed at 0xBBd707815a7F7eb6897C7686274AFabd7B579Ff6 on Mode Public Testnet. When you register your contract for SFS you mint an NFT. This NFT accrues the rewards for the registered smart contract and developers can assign multiple smart contracts to accrue rewards to one NFT.
An off-chain component will process the transactions for each smart contract to calculate its share of fees. This component will also distribute the fees to registered smart contracts in the contract which will be claimable every 2 weeks. In the coming weeks, we will be releasing a guide for SFS and a UI for developers to view and claim sequencer fee distributions.
Benefits of SFS for developers:
Predictable revenue: SFS enables developers to receive recurring revenue from the smart contracts they deploy to Mode giving them capital to reinvest into their applications.
Enhanced transparency: Mode V1 allows users to verify SFS calculations to ensure they receive the correct distribution for their contributions to the network.
Network effects: The transparent and guaranteed fee distribution model is set to bring more developers to Mode who will deploy applications that grow the network.
Mode is currently on Public Testnet with Mainnet scheduled to launch in Q4 2023. Developers interested in deploying to Mode Mainnet can contact the Mode team directly for support with launching their application through this form. Mode will be offering $20,000 growth grants to a select group of applications.