October 27, 2023 • 38 mins
In this episode we welcome James Ross, the founder of Mode Network and former co-CEO of Hype. James shares his journey from the London FinTech scene to the world of blockchain, with a focus on DeFi that was ignited by experiences with regulation hurdles. His unique blend of traditional go-to-market strategies and on-chain data analysis brings a fresh approach to Web3 marketing.
James recounts the evolution of Hype, a leading Web3 marketing agency, which scaled from a team of 30 to 180 during the bull market. The discussion explores the distinct strategies that set Hype apart from its Web2 counterparts. You'll get a glimpse of the workings of a Web3 marketing agency, from innovative hiring practices to resource allocation during market shifts. James' insights into these strategies are sure to be a valuable lesson for marketing enthusiasts and budding entrepreneurs alike.
The conversation then shifts to Mode Network's focus on incentivizing developers and aligning incentives to share the network's success with users. James delves into the security challenges and strategies employed to encourage growth, the potential of meme coins and NFTs on Mode, and the implementation of a referral network within the protocol. This insightful discussion offers a unique perspective on the evolution and future of Web3, making it a valuable listen for anyone intrigued by DeFi and blockchain technology.
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Episode Transcript
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Speaker 1 (00:01):
Hey everyone, welcome back to the Crescendo Go To
Market podcast, and in today'sepisode we have James Ross.
He's the founder of ModeNetwork.
He also was co-CEO of Hype,which is probably one of the
biggest Web3 marketing agenciesout there.
So, james, why don't you giveus a quick intro as to what
you're up to and a brief introto your roles in Web3.
Speaker 2 (00:24):
Absolutely.
Thank you so much for having meon.
It's a pleasure to be here andI can kick off by telling you a
little bit about my background.
So the start of my career Iworked in FinTech in London,
worked for a number of differentcompanies and had some success
there and then, in around2016-17, got into crypto
(00:50):
Ethereum via Reddit I think Iwas reading a load of posts from
Rune, from Maker, a load ofposts from Vitalik.
I studied economics so I wasquite interested in economic
theory.
I had started seeing some stuffaround blockchain and, yeah,
basically it was like, oh my god, these are the smartest people
I've ever come across,especially Vitalik.
(01:12):
So that kind of hooked me inand I started buying Ethereum in
2017 and started participatingin various ICOs for financial
applications and startedinvesting via Ethereum token
sales and I think I made around50 angel investments so far in
(01:38):
the space and I've been focusedon working with DeFi
applications through like2019-2020.
Then I started up a smallconsultancy to work on
go-to-market strategy for DeFiteams.
I sold this to Hype and joinedJake, the founder of Hype, to
grow that out, and at the time Iwas there, hype grew from
(02:00):
around 40 people to 150.
And we worked with a lot ofleading layer 1s, layer 2s on
their growth ecosystem and moregeneral go-to-market strategies.
So that was a really excitingtime.
I think we're one of the firstgroups to be running like
multi-million dollar marketingcampaigns for protocols, which
(02:22):
was really exciting.
And yeah, I left Hype a fewmonths back to focus in on mode,
which is an OP stack, layer 2.
It's like the on-chaincooperative.
We're using a lot of gametheory.
We're using a lot of productknowledge that we built up over
the years to essentially developan L2, which is very focused on
(02:43):
helping applications anddevelopers grow the ecosystem
and it's also focused on userskind of in friendly competition,
growing the chain together.
So yeah, I'm sure we can diginto that a little bit more
later on.
Speaker 1 (03:00):
That's really interesting.
And when you were workingfinance, what kind of roles were
you working in?
Speaker 2 (03:06):
Yeah, so originally I went into an investment banking
grad scheme and I lasted Ithink like five and a half
months.
It was pretty tough.
It wasn't really for me.
Then I went to work for astartup bank and focused on
finance for kids.
So it was giving kids betweenthe age of I think like eight
(03:26):
and 12 bank cards for the firsttime in a restricted way.
So kids kind of learned aboutusing digital money, not crypto
like digital money, just likeusing bank cards and stuff.
It was fun.
It was a pretty successfulstart.
It ended up selling to one ofthe large banks in the UK.
Speaker 1 (03:48):
Awesome, and I guess the reason you got really very
attracted by crypto and Ethereumoriginally did the finance
background have a lot to do withthat, or what was the reason
that originally attracted you tothe space?
Speaker 2 (04:00):
Yeah, I was working on a project in 2015, 16, with
some friends where we werebuilding out savings accounts
and the idea was that thesesavings accounts would move your
money to different savingsaccounts around the world and
(04:20):
optimize interest rates for you.
We were pretty naive at thetime and, yeah, we kind of, and
it was going quite well.
The MVP was built prettysolidly.
Things were looking quite good.
We looked to try and get itregulated and saw that the path
for us as a group of guys in ourearly 20s was actually going to
(04:45):
be very difficult to get thisproperly regulated.
So at that time we were alsolooking at other ways we could
build interesting fintechapplications.
It was a real wave of reallyinteresting fintech stuff being
built.
At that time, revolute was justgaining traction in the UK,
(05:06):
monzo another challenger bank soyeah, that kind of led me and
the team into crypto.
Some of the team carried onbuilding out that financial
application and I went andfocused in on crypto.
Speaker 1 (05:22):
That is so interesting.
So basically, we're trying tobuild out Trap5 products and
realize that you essentiallywanted to build a yield product
and realize it's a pain in thereal world.
So, that's kind of whatattracted you to D5.
Speaker 2 (05:36):
Yeah, exactly, we were doing some kind of like
yeah, I guess it's like grayarea stuff.
In our MVP, we signed intopeople's bank accounts for them
using like different bots.
So we had built a load ofdifferent bots which would
essentially sign into people'sbanks and move their money
(05:57):
around to different accounts forthem.
You know, it's like a test andwhen we showed this to, yeah,
the kind of regulators and theexperts in the fintech world,
they were pretty, pretty alarmedby how we were kind of getting
around the rules.
So maybe it was a good ideathat, yeah, that was just a test
product, just an experiment,and, yeah, the rest of the team
(06:21):
went on to build some reallyinteresting products that loaded
like banking data and used alot of the new banking APIs that
emerged.
Speaker 1 (06:32):
That is awesome.
And how did you get involvedwith basically, hype and Web3
marketing, because you startedout with building products, with
investment banking and buildingproducts, and then how did you
get more into the go to marketside of things?
Speaker 2 (06:45):
Yeah, I was always more on the marketing side and
the business side of theprojects I worked on.
I did a little bit of productstuff but yeah, I was mainly
focused on business and go tomarket.
And yeah, after spending a lotof time, you know investing in
crypto teams, I saw that therewas a huge gap with you know,
(07:06):
the knowledge around go tomarket.
I also saw that, like marketingWeb3 crypto products is very
different, requires a differentunderstanding of the marketing
landscape.
There are different metrics,there are different KPIs.
(07:26):
The fact that things arecommunity driven also changes
the way you market cryptoproducts.
So, yeah, I started to.
As I invested more, I saw moreand more teams needing help and
so I started to get involved andthen set up a small consultancy
.
Part of the consultancy waslooking at managing different
(07:51):
positions.
So we're doing data analysis ondifferent yield farms to
understand when would be anoptimal time to join a yield
farm, when would be an optimaltime to leave.
Looking at the different peoplethat had LP positions, looking
at that on-chain data, trying tounderstand what their behaviour
will be.
(08:11):
Would they, if the asset drops10%?
How likely is it that they'llleave the yield farm like pull
their liquidity.
If it increases 10%, how likelyis it that they'll leave?
Have they voted in governancein the past?
Do they use tokens in the waythey're intended, or are they
(08:33):
more financially motivated?
So, yeah, I started doing a lotof this and then got quite deep
into that, but yeah, at thesame time was working with a lot
of protocols on just givingthem ideas, things that might
work, and yeah, started takingour clients on this go-to-market
(08:54):
side of things.
Speaker 1 (08:55):
Interesting.
So it's basically a mix of youknow.
You're obviously doing thetraditional go-to-market in
terms of what's the message, etcetera, but then you're also
looking at the on-chain data toreally figure out okay, what are
my customers like, what arethey responding to and how can
we really make this kind of workright?
Because I kind of feel like incrypto, go-to-market isn't just
like, it isn't just marketing,it's product, it's everything,
(09:18):
it's the incentives that youhave.
So you kind of combineeverything into one essentially
approach.
Speaker 2 (09:28):
Absolutely yeah.
And yet, maybe just to mentionas well, there was like a period
in early 2020, I think it waswhere I met a guy called Rick
Burton who was working on awallet called Balance.
It was one of the first DeFiwallets.
(09:49):
I went with him to StanfordBlockchain Conference.
Defi was just becoming like aterm.
So I remember people werecomplaining, they were arguing
about whether it should becalled DeFi or Open Finance.
There was like a big debate andthey had, like you know, you
had like people from DYDX,compound Dharma, which was a
(10:14):
wallet and savings product, allarguing about whether it should
be called DeFi or Open Finance.
And yeah, from here I went towork with this guy, rick, for I
think a couple of months on hisDeFi product balance.
The market was super small, butthat kind of really got me
interested in like the potentialof DeFi.
(10:38):
I think about this time it'sabout $150.
It was pretty low and yeah, Ifelt like I was kind of one of
the only marketing people leftin the industry.
A lot of people left and yeah,it was a weird time, but yeah,
that's when I really got the bugfor like helping teams out.
Speaker 1 (11:01):
Got it and how did that end up into you basically
joining Hype.
What did that journey look like?
Speaker 2 (11:08):
Yeah, so I've been running this consultancy called
Agency X and I'd actually metJake, the founder of Hype in
Berlin.
He was living in Berlin and Iwas visiting Berlin and we went
for a coffee.
We realized we'd kind of beentrying to solve the same
problems.
We'd both been working withsome similar teams as well.
(11:29):
Then a mutual friend of ourswas launching a new options
protocol product and, yeah, weboth worked on the campaign
together, like my consultancyand Jake's team.
I was very impressed with themand, yeah, we worked on a couple
more projects.
Then Jake had another startupthat he'd built up in the bear
(11:56):
market called Port, which wasfocused on developer tooling and
that was being acquired andyeah, so Jake went to work on
Port and, yeah, I came in tokind of help grow Hype as the
bull market was kicking off andin full swing.
Speaker 1 (12:17):
Yeah, that's a good time to get into it, and I guess
at that point, how big was theHype team when you joined them?
Speaker 2 (12:25):
I think it was around 30 to 40 people yeah.
Speaker 1 (12:30):
And how big was it?
Maybe during the bull market?
Speaker 2 (12:33):
I think we got up to like 170 people, maybe 180.
I don't really remember theexact numbers.
But like I spent, I mean, Iwould say, 60% of the time on
hiring during that period, wewere taking on a lot of large
(12:58):
clients and, yeah, we werereally aggressively hiring, so
much to the point that weacquired a recruitment agency
Because we realized we werespending all our time hiring.
So we should probably justacquire a recruitment agency to
help us with that.
Speaker 1 (13:19):
Wow, that is crazy.
And what are the biggestlessons you learned while hyper
scaling that fast?
Because that is extremelyaggressive growth, especially
for a marketing agency, and I'mcurious what your experiences
were with that.
Speaker 2 (13:35):
Yeah, so I think there are a couple of things
that are unique about hiring.
Everyone's always saying, wow,there's so many people, what are
they all doing?
And it is kind of like makessense, what are they all doing?
And the answer to that is thatmarketing agencies are pretty
resource intensive, rightAgencies?
In general, they're mainly afunction of people's time, so
(13:59):
you're charging out servicesbased on the people you're using
and the time they're puttinginto various tasks and, for
example, with a server-sidecommunity management, it's
extremely resource intensive.
If you're managing 30, 40, 50different communities at one
(14:20):
time, you need a very big teamto be able to do eight hour
shifts and cover all thosecommunities and be really on
hand, and there isn't really away to get around that.
A lot of people said why don'tyou use AI?
Why don't you use automation?
Blah, blah, blah.
But when you're expected togive like a super high level of
service, you have to have awell-trained team.
(14:41):
You have to have someone onhand at all times.
So we know, like crypto is 24-7.
If something goes wrong in themiddle of the night, then there
needs to be someone there who'sexperienced enough to handle the
situation.
So, yeah, a large amount of theteam was on the community side,
(15:02):
and then we also had, yeah, asignificant amount running
across all the differentresources.
We built up a big creative arm.
So that was one thing that meand Jake discussed before I
joined was that now is the kindof time to bring these big brand
, I guess experiences or bigbrand campaigns to crypto.
(15:25):
And we brought on a reallyamazing creative director called
Lee and started to expand thecreative team quite aggressively
and started to do, yeah, a lotmore video and motion.
You know stuff that you wouldsee big creative agencies in New
York and London doing forbrands like Coca-Cola or Pepsi.
(15:47):
So we started to do that and,yeah, there was a huge appetite
for that in the market at thetime and we were competing
against these Web2 agencies forthese projects and we were often
winning because, you know, thefounders could talk to us about
DeFi and say, hey, we'relaunching a DeFi fund with these
(16:10):
seven you know projects andwe'd be able to.
We'd probably have apre-existing relationship with
everyone you know that wasworking together on this.
We'd understand thetechnicalities.
We'd understand the differentlanguage we need to use.
We'd understand restrictionsaround ways, things we can't say
, things we can.
So that was a pretty bigadvantage.
(16:33):
And I think, yeah, scaling outan agency is very much focused
on how you scale your servicesand the structure of your teams.
So you can scale like oneservice and really try and like
be the best of community, or youcan scale like the best
(16:53):
creative and you can try and bethe best of creative.
But often when you're workingwith crypto teams, you need to
have a range of services you canprovide them, because marketing
is quite a holistic thing.
Like all teams need to talk toeach other and work together to
push like the project forward ingeneral.
And you know most campaigns werun would have a social element.
(17:17):
They would have.
So you need like to be good athave someone who's great at
Twitter.
You need to have a creativeelement for, like a campaign,
you need to have a communityelement.
So we had great heads ofdepartments for all those
different services and then theywere tasked to like grow out
their teams.
So you know, as work was comingin, we would maybe say to the
(17:41):
creative team hey, we have threeor four huge projects they're
like in the pipeline, so itmakes sense for you to start,
you know, hiring some morecreative directors, and then you
know the head of creative wouldgo it's just a game of resource
allocation and that's.
Yeah, that can be pretty tough,but when the market is, you
(18:05):
know, growing, it's much easierto hire people and, you know,
give them work and make surethat everyone's got enough work.
Then, when the market isobviously moving the other
direction and you have to, like,you have to manage resources
the other way, that's a muchmore tough job.
Speaker 1 (18:25):
Interesting.
Yeah, I agree 100%.
It's like that aspect ofscaling an agency is that you
kind of have to.
You're balancing, you know, theside of getting sales and also
improving ops and hiring peopleat the same time.
And it's like this balancingact and I guess, like the way
you guys did, it is because youhad these department heads who
are all very, very good.
(18:47):
They could hire their ownpeople.
So you, as the CEO, you'reprobably able to be just like,
okay, we need more resourceshere, and then they go off and
basically build out that team.
And I think that's a reallystrong approach to scaling an
agency, because you know, ifyou're just one person trying to
hire everybody for differentservices, it's very difficult.
(19:08):
But also you have to be at acertain point, right like, you
can't hire those type of peopleuntil you're at a certain amount
of revenue, so it's almosttakes a lot of time to get to
that point.
But yeah, that's all likeextremely impressive.
So, to follow on from thatright like so it sounds like
with hype you guys had a hugeamount of success, something
(19:28):
that you know you probably arethe best at.
And, as as time went on, right,why did you decide to go check
like, basically check outdifferent business models and
eventually settle on mode andwhat is mode?
Speaker 2 (19:44):
Yeah, so you know, over the years I spent a lot of
time with founders of L ones andL twos helping them build out
the ecosystem, thinking aboutdifferent strategies to get
developers to build on, like,build out applications,
different yeah, different kindof approaches to how to build
(20:08):
our community, to support ourecosystem, how to build our user
base.
And I started to get more andmore interested in thinking
about what, what's missing,where, where it gaps in building
our ecosystem, and I started tosee that like a big issue was
around resource allocation.
(20:29):
And you know the best, the bestL ones out twos, or the fastest
growing that I've seen in thismarket, have been the ones that
have been like super aggressivewith BD and developer
acquisition.
Two good examples of that wouldbe like Salana.
On the developer acquisitionside, they were running huge
(20:49):
events, hackathons, being reallyaggressive at getting
developers funded to build onSalana, and then you look at a
project like Polygon.
On the BD side, their team isreally excellent.
They've been very aggressive atmaking sure that they can
strike big deals and bringsignificant, significant brands
(21:11):
from the crypto world and thenon crypto world now to their
blockchain to essentially fuelgrowth.
So I've been thinking aboutthat a lot.
I was thinking about that a lot.
I was speaking to a friend,jimmy, who's a founder of ocean,
and we were sketching outdifferent ways that you know,
you can incentivize developers.
And we were looking at the waythat L twos essentially make a
(21:34):
lot of revenue from sequence offees and thought about how, you
know, sharing that revenue withdevelopers could be a great tool
and a great feature of a chainto, yeah, bring, bring more
developers to the ecosystem withthese incentives.
I also looked at like what canto have done Archway phantom I
(21:55):
wrote a piece about that on myblog that it's a really cool
growth hack to essentially havecontinuous cycle funding
developers.
And then also we looked at likewhat have been the most
successful user acquisitionchannels in crypto, and referral
networks have definitely beenone of the most successful, and
so thought about how to buildthat into a ecosystem as well
(22:19):
into a protocol.
So, yeah, mode is essentially anOPS stack L two that's designed
to grow.
It's kind of vague, but likeit's designed with this model
that all developers can deployand they'll start earning
revenue and users can referothers to the chain and they'll
(22:39):
start earning revenue.
And it's essentially like howcan we align incentives so that
if you grow mode you'll earn ashare of the success of mode.
And yeah, we currently onpublic test net.
We've been on test net foraround, I think, two and a half
months, nearly three months, andwe are going to be launching
(23:00):
main net soon TM, but inNovember.
Speaker 1 (23:04):
Yeah, that's such a new and unique approach and I
find it refreshing because, likeyou said, a lot of L ones and L
twos they don't really seem tounderstand growth, or they seem
to understand growth for certainapplications but not for other
applications.
Like I have noticed that a lotof the new L twos that are
popping up or the new L onesthat are like very, very
(23:25):
technical, they all say that hey, we want to bring on gaming
studios, but I haven't heard asingle single gaming studio
founder actually talk aboutthose chains, because they just
don't know how to speak to thosegame developers.
They kind of think that they'respeaking to defy developers who
are much more technical, whilethe average game studio
developers, you know, basicallyunderstands blockchain at the
(23:46):
level that maybe a retailinvestor does.
Right, like they're not.
They want to build games.
They don't necessarily want tobe PhDs and cryptography.
So I agree there's a hugeproblem with how a lot of these
new chains and ecosystems areacquiring developers, or at
least the developers they claimthey want to acquire.
And this is probably the firstapproach I've seen where, from
(24:07):
first principles on the protocollevel, you literally are
incentivizing growth.
So question for you so let'ssay you know you recently had
bad on base meme coin thatabsolutely took off.
What if bad released on on moderight, like if there's a meme
coin and there's like a meme NFTcollection, whatever, and just
(24:28):
results in a huge amount ofnetwork activity, does that app
gain?
You know, basically a largeportion of sequence sequencer
fees.
How does that work?
And I'm just curious how you,how you think about that in
terms of the cinematic, likethings that happen.
Speaker 2 (24:43):
Yeah, I think that.
So the hardest thing obviouslywith a new network is
bootstrapping it, and memes canbe like meme coins can be a
pretty effective way tobootstrap base.
Saw this when they had the boldtoken launch and everyone
rushed to bridge to buy this newbold meme token.
(25:05):
So yeah, in this case sequenceof fees would be shared with the
person who deploys the smartcontracts of the token, but also
like the exchanges, so ifpeople are exchanging through
one of the exchanges on mode,the exchange will earn the
(25:25):
sequence of fees or share thesequence of fees from that
transaction.
Speaker 1 (25:30):
Interesting and how does the referral aspect work?
So if you refer developers oryou refer users, or how exactly
does the referral portion ofthis function?
Speaker 2 (25:41):
Yeah.
So the referral network worksvia links to the bridge.
So if I sent you my link andyou click through to the bridge,
you bridge some funds over tomode, some ETH, and you start
using mode, I will get aproportion of all your
transaction fees for forever.
So we're also thinking of thisas a retention tool, because,
(26:06):
you know, if I send out my linkand a load of people bridge to
mode, I'm going to be earningsome fees.
It might not be significant,right, but the fees are in ETH,
which is quite cool.
We know ETH is looks like it'sgoing to be growing
significantly over the next fewyears, hopefully.
So I mean, as a user, I want tocheck back, I want to, you know
(26:30):
, see if I've earned fees.
So it creates quite a niceretention loop that I'm not sure
many other chains have.
And this is something that wereally want to achieve with mode
is that we want mode to be likea destination.
We want mode to be a place likethat you can come here of like
what you're doing on the networkas a user.
(26:53):
You can see how you know you're, you know, showing your link
has actually helped grow thenetwork.
You can see what kind oftraction you've been driving.
I think that's really cool.
Then on the developer side, youcould the same like as a
developer.
You can see your smartcontracts from your dashboard.
You can see how much.
(27:14):
You know how many fees have runthrough those.
I think that's really cool aswell.
Speaker 1 (27:19):
Awesome and I guess like, let's get to the tech
stack.
You guys are building on the OPstack.
What was the reason behind that?
Speaker 2 (27:28):
Yeah, the OP stack is pretty interesting.
So I've been speaking to theoptimism team for a while and,
to be honest, the OP stack frommy perspective is the most
production ready stack to use.
So base is obviously using OPstack and you know that's
technical to cool.
(27:48):
Team is amazing.
We've seen quite a lot of otherchains pick up on OP stack and
so, yeah, for us we looked atlike other possibilities and the
OP stack, yeah, made the mostsense because we can quickly
move something to production.
Now we were.
We've been building out theproducts for mode for three
(28:10):
months now and we're ready to goto mainnet.
Speaker 1 (28:14):
Got it and in one of your presentations that I saw
recently, you mentioned thatmode is the Shopify of L2s.
Could you tell us why?
Speaker 2 (28:22):
Yeah, we're trying to .
We're trying to position modeas, like a Shopify approach to
growth versus a AWS approach togrowth.
Aws is obviously extremelysuccessful, but they are, you
know, a service for developersto use, and the way they, you
(28:44):
know, do that is by givingdevelopers, like, the basic
tools to get everything spun upvery quickly.
And then AWS doesn't reallyhelp much more than that, but it
does, you know, web servicesextremely well and other
functions, trying to give theentrepreneur everything they
need to be successful.
(29:05):
So there have been stores thathave built on Shopify that ended
up IPOing, and Shopify'sapproach is how can we make it
as easy as possible for anentrepreneur to build out a
business which is going to gopublic?
Well, how can they build out astore which is going to get the
most revenue?
So that's meant that Shopify'sdecisions around that haven't
(29:29):
necessarily been focused onbeing like the best store
builder it's.
They've been focused on how canwe make this the most useful
platform For store owners.
So they've added, like theyspent a lot of time with how
they think about paymentprocessing.
They spent a lot of time withhow they think about Integrating
marketing tools.
(29:50):
So you know, if you run a shop.
You can quickly start runningFacebook ads with a few clicks
of a button, and that's how wewant to think about mode most
dashboards for developers.
We want them to be able todeploy the applications quickly
but then have a lot of supportwith all the other tasks which
developers find difficult, right?
(30:10):
So back office tasks are prettycomplex in crypto, so we're
working with doubt toolingstartups like hedgy.
Then growth and analytics ispretty difficult as well, so
we're going to be integratingtools like spindle Safari, hype
lab for Advertising, sodevelopers will be very quickly
(30:33):
able to, you know, get up andlaunch campaigns growth
campaigns as well.
Speaker 1 (30:40):
Yeah, this is interesting because I think
where Shopify did really well isit started out as a solution
for essentially small tomedium-sized businesses, right,
anybody who wanted to get intoe-commerce but necessarily
didn't have a huge team to justbuild up a custom web store
right.
And because of that they wereable to grow so rapidly.
And, yeah, they're probablythose Enterprise stores which
(31:03):
initially did not really.
You know, they built their ownsolutions.
But even now you look atShopify and there's a lot of
enterprise customers that useShopify plus and I think this is
a great analogy, especially ifyou just make it easy for devs
to, you know, build out productsquickly and Just get them spun
up and be able to really rapidlyiterate an experiment.
(31:24):
I'm curious if what you thinkabout.
So one of the big issues I seein web 3 is that Security is
like this really slow processwhere you have to go through
multiple audits and they takelike a couple months and then
they come back to you with abunch of fixes and you fix them,
get another audit.
I think that's one of the bigroadblocks is do you have any
thoughts on how that could beaccelerated or improved?
(31:46):
I?
Speaker 2 (31:49):
Think that, yeah, there's.
You know, security is a huge, ahuge importance to every
project and yeah, unfortunately,there aren't really any
shortcuts there.
We can look at different kindof monitoring systems.
We can look at having closeRelationships with certain
(32:11):
auditors to support projectsthat come and build on mode,
like we'll be able to get themaudits done quickly.
But yeah, there's really no, noeasy solution and yeah, it's
something we have to takeextremely seriously.
We can always, you know,support projects that want to
run on test net, so there's notreal money at stake.
(32:31):
Maybe they want to test like agame and we would say let's do
an experiment on test net and,you know, maybe someone's going
to try and break it there.
Yeah, it is difficult becausethings in production, obviously
when the stakes are higher thanincentives are higher as well.
So it's a it's a difficultproblem to solve.
(32:54):
Right now.
We're, yeah, we're working withdifferent auditing firms, you
know, form partnerships so wecan support projects that want
to deploy to mode with grantsfor security audits.
But yeah, unfortunately, rightnow there's no easy solution to
that and yeah, we have to justencourage teams to take security
Extremely seriously and supportthem as in any ways we can.
Speaker 1 (33:19):
Got it.
Yeah, that's definitely one ofthe the key things where I think
there's definitely gonna be alot of innovation in the next
couple years in terms ofsecurity, tooling and whole
process around that.
So we'll be interesting to seehow that turns out.
And yeah, how do you see, withthis new revenue share model
right, how do you see itaffecting, like developer
(33:39):
incentives and how they approachbuilding a new project?
Speaker 2 (33:44):
Developer incentives.
Speaker 1 (33:46):
Yeah, in terms of the revenue share model.
How do you see that as comparedto like traditional grants?
Speaker 2 (33:51):
Yeah, so I think it needs to run in combination.
So you know we, if you're adeveloper and you deploy, deploy
contracts to mode and peoplestart using those contracts,
you'll start earning fees.
I'm not sure if those are gonnabe crazy high to start with.
You know, it might be a couplehundred dollars a month, it
might be a couple thousanddollars.
(34:12):
We're not quite sure yet.
That's like to be seen, butthis is like a great proxy for
us to give further rewards andfurther grants.
If we see a developer teamdeploys to mode and they're
starting to get some initialtraction, they'll start earning
fees and you know, we canpotentially look at how we can
support them to scale thatfurther.
(34:32):
The key thing we wanted to dowith fees is give developers a
way to start earning immediately, because a lot of feedback we
got from devs was that some ofthe grant processes are really
really hard to go through andDevelopers are kind of bored.
But they don't want to applyfor 10 different grant schemes
across 10 different chains.
(34:53):
They want a quick way to starttrying to earn and yeah, so this
is kind of our solution to that.
Speaker 1 (35:01):
Yeah that makes sense , but will you guys still be
doing grants as well, or wouldit just be the revenue share?
Speaker 2 (35:07):
Yeah, we will be doing grants and, but we'll be
focusing these on growth.
So the grants will be between10 and 25k and we expect the
teams to be spending this onyeah, growth campaigns for
launching, on mode.
Speaker 1 (35:19):
Got it, got it.
That makes sense.
Actually, I can see that.
Yeah, that makes a ton of senseand and Sorry, and one really
interesting question that I haveis how do you view bots in the
ecosystem?
Do you see them being a majorissue, since you're sharing
Sequencer revenue and othergrowth and referral incentives,
(35:41):
like you know?
Do you see people likebasically referring fake wallets
or referring bots or botnetworks?
Speaker 2 (35:47):
and yeah, just curious about that so it's kind
of like, as it stand, it'spretty civil proof because you
know You'd be paying a dollar infees to get like 20 cents back
right in fees.
So If you had like a big botnetwork you wouldn't be earning
money.
But potentially if we addfurther rewards or further
(36:09):
incentives on top, then yeah, Ithink there definitely could be
a risk of people trying to civilit.
We've got a few different ideasfor how we can reduce like the
attack factor there.
But yeah, it's a very hardproblem right now for developers
with sequencer fees.
We're probably gonna kick offwith a whitelist so we have like
(36:33):
a no hundred or two hundredapplications they're a
whitelisted to yeah, receivesequencer fees.
We also might just open up toeveryone.
We're not quite sure on thatyet, but we're testing that the
moment on testnet.
Speaker 1 (36:49):
Yeah, that totally makes sense, Especially what you
said about you know if, ifpeople refer each other, they
only earn a percentage, thatends up being a net sum for the
ecosystem.
Very, very interesting.
And yeah, james.
So I'm curious when can peoplefind out more about mode and
building on mode?
And are you guys also, you know, is there any opportunities for
(37:11):
VCs to get involved orCommunity members to get
involved?
Just curious how differentpeople can reach out and learn
more.
Speaker 2 (37:18):
Yeah, so I'm Jay Ross , treacher on Twitter, and Our
Twitter for mode is just modenetwork.
You can feel free to DM me ifyou're yet keen to hear more
about about what we're buildingor want to be involved in any
way.
(37:39):
And, yeah, if you're wanting toget involved with the community
, then yeah, I'd encourage youto check out the mode Twitter.
We often have like campaignsrunning that people can get
involved with.
We're running a load of growthexperiments.
We're trying to get creative.
We're about to kick off anexperiment on friend tech, so
that could be quite interestingfor people who want to get
(37:59):
involved.
So, yeah, awesome.
Speaker 1 (38:01):
Yeah, that sounds interesting.
So thanks for coming on to thepodcast and, yeah, best of luck
with the launch of mode andreally looking forward to seeing
what you guys do in theecosystem.
Speaker 2 (38:11):
Really appreciate the opportunity to chat to everyone
here.
Thank you so much.
Speaker 1 (38:17):
Yeah, and everyone.
If you are listening on Spotifyor Apple or wherever, give us a
rating and if you're on YouTube, give us a subscribe.
And Looking forward to the nextpodcast, cheers.
Hey everyone, welcome back to the Crescendo Go To
Market podcast, and in today'sepisode we have James Ross.
He's the founder of ModeNetwork.
He also was co-CEO of Hype,which is probably one of the
biggest Web3 marketing agenciesout there.
So, james, why don't you giveus a quick intro as to what
you're up to and a brief introto your roles in Web3.
Speaker 2 (00:24):
Absolutely.
Thank you so much for having meon.
It's a pleasure to be here andI can kick off by telling you a
little bit about my background.
So the start of my career Iworked in FinTech in London,
worked for a number of differentcompanies and had some success
there and then, in around2016-17, got into crypto
(00:50):
Ethereum via Reddit I think Iwas reading a load of posts from
Rune, from Maker, a load ofposts from Vitalik.
I studied economics so I wasquite interested in economic
theory.
I had started seeing some stuffaround blockchain and, yeah,
basically it was like, oh my god, these are the smartest people
I've ever come across,especially Vitalik.
(01:12):
So that kind of hooked me inand I started buying Ethereum in
2017 and started participatingin various ICOs for financial
applications and startedinvesting via Ethereum token
sales and I think I made around50 angel investments so far in
(01:38):
the space and I've been focusedon working with DeFi
applications through like2019-2020.
Then I started up a smallconsultancy to work on
go-to-market strategy for DeFiteams.
I sold this to Hype and joinedJake, the founder of Hype, to
grow that out, and at the time Iwas there, hype grew from
(02:00):
around 40 people to 150.
And we worked with a lot ofleading layer 1s, layer 2s on
their growth ecosystem and moregeneral go-to-market strategies.
So that was a really excitingtime.
I think we're one of the firstgroups to be running like
multi-million dollar marketingcampaigns for protocols, which
(02:22):
was really exciting.
And yeah, I left Hype a fewmonths back to focus in on mode,
which is an OP stack, layer 2.
It's like the on-chaincooperative.
We're using a lot of gametheory.
We're using a lot of productknowledge that we built up over
the years to essentially developan L2, which is very focused on
(02:43):
helping applications anddevelopers grow the ecosystem
and it's also focused on userskind of in friendly competition,
growing the chain together.
So yeah, I'm sure we can diginto that a little bit more
later on.
Speaker 1 (03:00):
That's really interesting.
And when you were workingfinance, what kind of roles were
you working in?
Speaker 2 (03:06):
Yeah, so originally I went into an investment banking
grad scheme and I lasted Ithink like five and a half
months.
It was pretty tough.
It wasn't really for me.
Then I went to work for astartup bank and focused on
finance for kids.
So it was giving kids betweenthe age of I think like eight
(03:26):
and 12 bank cards for the firsttime in a restricted way.
So kids kind of learned aboutusing digital money, not crypto
like digital money, just likeusing bank cards and stuff.
It was fun.
It was a pretty successfulstart.
It ended up selling to one ofthe large banks in the UK.
Speaker 1 (03:48):
Awesome, and I guess the reason you got really very
attracted by crypto and Ethereumoriginally did the finance
background have a lot to do withthat, or what was the reason
that originally attracted you tothe space?
Speaker 2 (04:00):
Yeah, I was working on a project in 2015, 16, with
some friends where we werebuilding out savings accounts
and the idea was that thesesavings accounts would move your
money to different savingsaccounts around the world and
(04:20):
optimize interest rates for you.
We were pretty naive at thetime and, yeah, we kind of, and
it was going quite well.
The MVP was built prettysolidly.
Things were looking quite good.
We looked to try and get itregulated and saw that the path
for us as a group of guys in ourearly 20s was actually going to
(04:45):
be very difficult to get thisproperly regulated.
So at that time we were alsolooking at other ways we could
build interesting fintechapplications.
It was a real wave of reallyinteresting fintech stuff being
built.
At that time, revolute was justgaining traction in the UK,
(05:06):
monzo another challenger bank soyeah, that kind of led me and
the team into crypto.
Some of the team carried onbuilding out that financial
application and I went andfocused in on crypto.
Speaker 1 (05:22):
That is so interesting.
So basically, we're trying tobuild out Trap5 products and
realize that you essentiallywanted to build a yield product
and realize it's a pain in thereal world.
So, that's kind of whatattracted you to D5.
Speaker 2 (05:36):
Yeah, exactly, we were doing some kind of like
yeah, I guess it's like grayarea stuff.
In our MVP, we signed intopeople's bank accounts for them
using like different bots.
So we had built a load ofdifferent bots which would
essentially sign into people'sbanks and move their money
(05:57):
around to different accounts forthem.
You know, it's like a test andwhen we showed this to, yeah,
the kind of regulators and theexperts in the fintech world,
they were pretty, pretty alarmedby how we were kind of getting
around the rules.
So maybe it was a good ideathat, yeah, that was just a test
product, just an experiment,and, yeah, the rest of the team
(06:21):
went on to build some reallyinteresting products that loaded
like banking data and used alot of the new banking APIs that
emerged.
Speaker 1 (06:32):
That is awesome.
And how did you get involvedwith basically, hype and Web3
marketing, because you startedout with building products, with
investment banking and buildingproducts, and then how did you
get more into the go to marketside of things?
Speaker 2 (06:45):
Yeah, I was always more on the marketing side and
the business side of theprojects I worked on.
I did a little bit of productstuff but yeah, I was mainly
focused on business and go tomarket.
And yeah, after spending a lotof time, you know investing in
crypto teams, I saw that therewas a huge gap with you know,
(07:06):
the knowledge around go tomarket.
I also saw that, like marketingWeb3 crypto products is very
different, requires a differentunderstanding of the marketing
landscape.
There are different metrics,there are different KPIs.
(07:26):
The fact that things arecommunity driven also changes
the way you market cryptoproducts.
So, yeah, I started to.
As I invested more, I saw moreand more teams needing help and
so I started to get involved andthen set up a small consultancy
.
Part of the consultancy waslooking at managing different
(07:51):
positions.
So we're doing data analysis ondifferent yield farms to
understand when would be anoptimal time to join a yield
farm, when would be an optimaltime to leave.
Looking at the different peoplethat had LP positions, looking
at that on-chain data, trying tounderstand what their behaviour
will be.
(08:11):
Would they, if the asset drops10%?
How likely is it that they'llleave the yield farm like pull
their liquidity.
If it increases 10%, how likelyis it that they'll leave?
Have they voted in governancein the past?
Do they use tokens in the waythey're intended, or are they
(08:33):
more financially motivated?
So, yeah, I started doing a lotof this and then got quite deep
into that, but yeah, at thesame time was working with a lot
of protocols on just givingthem ideas, things that might
work, and yeah, started takingour clients on this go-to-market
(08:54):
side of things.
Speaker 1 (08:55):
Interesting.
So it's basically a mix of youknow.
You're obviously doing thetraditional go-to-market in
terms of what's the message, etcetera, but then you're also
looking at the on-chain data toreally figure out okay, what are
my customers like, what arethey responding to and how can
we really make this kind of workright?
Because I kind of feel like incrypto, go-to-market isn't just
like, it isn't just marketing,it's product, it's everything,
(09:18):
it's the incentives that youhave.
So you kind of combineeverything into one essentially
approach.
Speaker 2 (09:28):
Absolutely yeah.
And yet, maybe just to mentionas well, there was like a period
in early 2020, I think it waswhere I met a guy called Rick
Burton who was working on awallet called Balance.
It was one of the first DeFiwallets.
(09:49):
I went with him to StanfordBlockchain Conference.
Defi was just becoming like aterm.
So I remember people werecomplaining, they were arguing
about whether it should becalled DeFi or Open Finance.
There was like a big debate andthey had, like you know, you
had like people from DYDX,compound Dharma, which was a
(10:14):
wallet and savings product, allarguing about whether it should
be called DeFi or Open Finance.
And yeah, from here I went towork with this guy, rick, for I
think a couple of months on hisDeFi product balance.
The market was super small, butthat kind of really got me
interested in like the potentialof DeFi.
(10:38):
I think about this time it'sabout $150.
It was pretty low and yeah, Ifelt like I was kind of one of
the only marketing people leftin the industry.
A lot of people left and yeah,it was a weird time, but yeah,
that's when I really got the bugfor like helping teams out.
Speaker 1 (11:01):
Got it and how did that end up into you basically
joining Hype.
What did that journey look like?
Speaker 2 (11:08):
Yeah, so I've been running this consultancy called
Agency X and I'd actually metJake, the founder of Hype in
Berlin.
He was living in Berlin and Iwas visiting Berlin and we went
for a coffee.
We realized we'd kind of beentrying to solve the same
problems.
We'd both been working withsome similar teams as well.
(11:29):
Then a mutual friend of ourswas launching a new options
protocol product and, yeah, weboth worked on the campaign
together, like my consultancyand Jake's team.
I was very impressed with themand, yeah, we worked on a couple
more projects.
Then Jake had another startupthat he'd built up in the bear
(11:56):
market called Port, which wasfocused on developer tooling and
that was being acquired andyeah, so Jake went to work on
Port and, yeah, I came in tokind of help grow Hype as the
bull market was kicking off andin full swing.
Speaker 1 (12:17):
Yeah, that's a good time to get into it, and I guess
at that point, how big was theHype team when you joined them?
Speaker 2 (12:25):
I think it was around 30 to 40 people yeah.
Speaker 1 (12:30):
And how big was it?
Maybe during the bull market?
Speaker 2 (12:33):
I think we got up to like 170 people, maybe 180.
I don't really remember theexact numbers.
But like I spent, I mean, Iwould say, 60% of the time on
hiring during that period, wewere taking on a lot of large
(12:58):
clients and, yeah, we werereally aggressively hiring, so
much to the point that weacquired a recruitment agency
Because we realized we werespending all our time hiring.
So we should probably justacquire a recruitment agency to
help us with that.
Speaker 1 (13:19):
Wow, that is crazy.
And what are the biggestlessons you learned while hyper
scaling that fast?
Because that is extremelyaggressive growth, especially
for a marketing agency, and I'mcurious what your experiences
were with that.
Speaker 2 (13:35):
Yeah, so I think there are a couple of things
that are unique about hiring.
Everyone's always saying, wow,there's so many people, what are
they all doing?
And it is kind of like makessense, what are they all doing?
And the answer to that is thatmarketing agencies are pretty
resource intensive, rightAgencies?
In general, they're mainly afunction of people's time, so
(13:59):
you're charging out servicesbased on the people you're using
and the time they're puttinginto various tasks and, for
example, with a server-sidecommunity management, it's
extremely resource intensive.
If you're managing 30, 40, 50different communities at one
(14:20):
time, you need a very big teamto be able to do eight hour
shifts and cover all thosecommunities and be really on
hand, and there isn't really away to get around that.
A lot of people said why don'tyou use AI?
Why don't you use automation?
Blah, blah, blah.
But when you're expected togive like a super high level of
service, you have to have awell-trained team.
(14:41):
You have to have someone onhand at all times.
So we know, like crypto is 24-7.
If something goes wrong in themiddle of the night, then there
needs to be someone there who'sexperienced enough to handle the
situation.
So, yeah, a large amount of theteam was on the community side,
(15:02):
and then we also had, yeah, asignificant amount running
across all the differentresources.
We built up a big creative arm.
So that was one thing that meand Jake discussed before I
joined was that now is the kindof time to bring these big brand
, I guess experiences or bigbrand campaigns to crypto.
(15:25):
And we brought on a reallyamazing creative director called
Lee and started to expand thecreative team quite aggressively
and started to do, yeah, a lotmore video and motion.
You know stuff that you wouldsee big creative agencies in New
York and London doing forbrands like Coca-Cola or Pepsi.
(15:47):
So we started to do that and,yeah, there was a huge appetite
for that in the market at thetime and we were competing
against these Web2 agencies forthese projects and we were often
winning because, you know, thefounders could talk to us about
DeFi and say, hey, we'relaunching a DeFi fund with these
(16:10):
seven you know projects andwe'd be able to.
We'd probably have apre-existing relationship with
everyone you know that wasworking together on this.
We'd understand thetechnicalities.
We'd understand the differentlanguage we need to use.
We'd understand restrictionsaround ways, things we can't say
, things we can.
So that was a pretty bigadvantage.
(16:33):
And I think, yeah, scaling outan agency is very much focused
on how you scale your servicesand the structure of your teams.
So you can scale like oneservice and really try and like
be the best of community, or youcan scale like the best
(16:53):
creative and you can try and bethe best of creative.
But often when you're workingwith crypto teams, you need to
have a range of services you canprovide them, because marketing
is quite a holistic thing.
Like all teams need to talk toeach other and work together to
push like the project forward ingeneral.
And you know most campaigns werun would have a social element.
(17:17):
They would have.
So you need like to be good athave someone who's great at
Twitter.
You need to have a creativeelement for, like a campaign,
you need to have a communityelement.
So we had great heads ofdepartments for all those
different services and then theywere tasked to like grow out
their teams.
So you know, as work was comingin, we would maybe say to the
(17:41):
creative team hey, we have threeor four huge projects they're
like in the pipeline, so itmakes sense for you to start,
you know, hiring some morecreative directors, and then you
know the head of creative wouldgo it's just a game of resource
allocation and that's.
Yeah, that can be pretty tough,but when the market is, you
(18:05):
know, growing, it's much easierto hire people and, you know,
give them work and make surethat everyone's got enough work.
Then, when the market isobviously moving the other
direction and you have to, like,you have to manage resources
the other way, that's a muchmore tough job.
Speaker 1 (18:25):
Interesting.
Yeah, I agree 100%.
It's like that aspect ofscaling an agency is that you
kind of have to.
You're balancing, you know, theside of getting sales and also
improving ops and hiring peopleat the same time.
And it's like this balancingact and I guess, like the way
you guys did, it is because youhad these department heads who
are all very, very good.
(18:47):
They could hire their ownpeople.
So you, as the CEO, you'reprobably able to be just like,
okay, we need more resourceshere, and then they go off and
basically build out that team.
And I think that's a reallystrong approach to scaling an
agency, because you know, ifyou're just one person trying to
hire everybody for differentservices, it's very difficult.
(19:08):
But also you have to be at acertain point, right like, you
can't hire those type of peopleuntil you're at a certain amount
of revenue, so it's almosttakes a lot of time to get to
that point.
But yeah, that's all likeextremely impressive.
So, to follow on from thatright like so it sounds like
with hype you guys had a hugeamount of success, something
(19:28):
that you know you probably arethe best at.
And, as as time went on, right,why did you decide to go check
like, basically check outdifferent business models and
eventually settle on mode andwhat is mode?
Speaker 2 (19:44):
Yeah, so you know, over the years I spent a lot of
time with founders of L ones andL twos helping them build out
the ecosystem, thinking aboutdifferent strategies to get
developers to build on, like,build out applications,
different yeah, different kindof approaches to how to build
(20:08):
our community, to support ourecosystem, how to build our user
base.
And I started to get more andmore interested in thinking
about what, what's missing,where, where it gaps in building
our ecosystem, and I started tosee that like a big issue was
around resource allocation.
(20:29):
And you know the best, the bestL ones out twos, or the fastest
growing that I've seen in thismarket, have been the ones that
have been like super aggressivewith BD and developer
acquisition.
Two good examples of that wouldbe like Salana.
On the developer acquisitionside, they were running huge
(20:49):
events, hackathons, being reallyaggressive at getting
developers funded to build onSalana, and then you look at a
project like Polygon.
On the BD side, their team isreally excellent.
They've been very aggressive atmaking sure that they can
strike big deals and bringsignificant, significant brands
(21:11):
from the crypto world and thenon crypto world now to their
blockchain to essentially fuelgrowth.
So I've been thinking aboutthat a lot.
I was thinking about that a lot.
I was speaking to a friend,jimmy, who's a founder of ocean,
and we were sketching outdifferent ways that you know,
you can incentivize developers.
And we were looking at the waythat L twos essentially make a
(21:34):
lot of revenue from sequence offees and thought about how, you
know, sharing that revenue withdevelopers could be a great tool
and a great feature of a chainto, yeah, bring, bring more
developers to the ecosystem withthese incentives.
I also looked at like what canto have done Archway phantom I
(21:55):
wrote a piece about that on myblog that it's a really cool
growth hack to essentially havecontinuous cycle funding
developers.
And then also we looked at likewhat have been the most
successful user acquisitionchannels in crypto, and referral
networks have definitely beenone of the most successful, and
so thought about how to buildthat into a ecosystem as well
(22:19):
into a protocol.
So, yeah, mode is essentially anOPS stack L two that's designed
to grow.
It's kind of vague, but likeit's designed with this model
that all developers can deployand they'll start earning
revenue and users can referothers to the chain and they'll
(22:39):
start earning revenue.
And it's essentially like howcan we align incentives so that
if you grow mode you'll earn ashare of the success of mode.
And yeah, we currently onpublic test net.
We've been on test net foraround, I think, two and a half
months, nearly three months, andwe are going to be launching
(23:00):
main net soon TM, but inNovember.
Speaker 1 (23:04):
Yeah, that's such a new and unique approach and I
find it refreshing because, likeyou said, a lot of L ones and L
twos they don't really seem tounderstand growth, or they seem
to understand growth for certainapplications but not for other
applications.
Like I have noticed that a lotof the new L twos that are
popping up or the new L onesthat are like very, very
(23:25):
technical, they all say that hey, we want to bring on gaming
studios, but I haven't heard asingle single gaming studio
founder actually talk aboutthose chains, because they just
don't know how to speak to thosegame developers.
They kind of think that they'respeaking to defy developers who
are much more technical, whilethe average game studio
developers, you know, basicallyunderstands blockchain at the
(23:46):
level that maybe a retailinvestor does.
Right, like they're not.
They want to build games.
They don't necessarily want tobe PhDs and cryptography.
So I agree there's a hugeproblem with how a lot of these
new chains and ecosystems areacquiring developers, or at
least the developers they claimthey want to acquire.
And this is probably the firstapproach I've seen where, from
(24:07):
first principles on the protocollevel, you literally are
incentivizing growth.
So question for you so let'ssay you know you recently had
bad on base meme coin thatabsolutely took off.
What if bad released on on moderight, like if there's a meme
coin and there's like a meme NFTcollection, whatever, and just
(24:28):
results in a huge amount ofnetwork activity, does that app
gain?
You know, basically a largeportion of sequence sequencer
fees.
How does that work?
And I'm just curious how you,how you think about that in
terms of the cinematic, likethings that happen.
Speaker 2 (24:43):
Yeah, I think that.
So the hardest thing obviouslywith a new network is
bootstrapping it, and memes canbe like meme coins can be a
pretty effective way tobootstrap base.
Saw this when they had the boldtoken launch and everyone
rushed to bridge to buy this newbold meme token.
(25:05):
So yeah, in this case sequenceof fees would be shared with the
person who deploys the smartcontracts of the token, but also
like the exchanges, so ifpeople are exchanging through
one of the exchanges on mode,the exchange will earn the
(25:25):
sequence of fees or share thesequence of fees from that
transaction.
Speaker 1 (25:30):
Interesting and how does the referral aspect work?
So if you refer developers oryou refer users, or how exactly
does the referral portion ofthis function?
Speaker 2 (25:41):
Yeah.
So the referral network worksvia links to the bridge.
So if I sent you my link andyou click through to the bridge,
you bridge some funds over tomode, some ETH, and you start
using mode, I will get aproportion of all your
transaction fees for forever.
So we're also thinking of thisas a retention tool, because,
(26:06):
you know, if I send out my linkand a load of people bridge to
mode, I'm going to be earningsome fees.
It might not be significant,right, but the fees are in ETH,
which is quite cool.
We know ETH is looks like it'sgoing to be growing
significantly over the next fewyears, hopefully.
So I mean, as a user, I want tocheck back, I want to, you know
(26:30):
, see if I've earned fees.
So it creates quite a niceretention loop that I'm not sure
many other chains have.
And this is something that wereally want to achieve with mode
is that we want mode to be likea destination.
We want mode to be a place likethat you can come here of like
what you're doing on the networkas a user.
(26:53):
You can see how you know you're, you know, showing your link
has actually helped grow thenetwork.
You can see what kind oftraction you've been driving.
I think that's really cool.
Then on the developer side, youcould the same like as a
developer.
You can see your smartcontracts from your dashboard.
You can see how much.
(27:14):
You know how many fees have runthrough those.
I think that's really cool aswell.
Speaker 1 (27:19):
Awesome and I guess like, let's get to the tech
stack.
You guys are building on the OPstack.
What was the reason behind that?
Speaker 2 (27:28):
Yeah, the OP stack is pretty interesting.
So I've been speaking to theoptimism team for a while and,
to be honest, the OP stack frommy perspective is the most
production ready stack to use.
So base is obviously using OPstack and you know that's
technical to cool.
(27:48):
Team is amazing.
We've seen quite a lot of otherchains pick up on OP stack and
so, yeah, for us we looked atlike other possibilities and the
OP stack, yeah, made the mostsense because we can quickly
move something to production.
Now we were.
We've been building out theproducts for mode for three
(28:10):
months now and we're ready to goto mainnet.
Speaker 1 (28:14):
Got it and in one of your presentations that I saw
recently, you mentioned thatmode is the Shopify of L2s.
Could you tell us why?
Speaker 2 (28:22):
Yeah, we're trying to .
We're trying to position modeas, like a Shopify approach to
growth versus a AWS approach togrowth.
Aws is obviously extremelysuccessful, but they are, you
know, a service for developersto use, and the way they, you
(28:44):
know, do that is by givingdevelopers, like, the basic
tools to get everything spun upvery quickly.
And then AWS doesn't reallyhelp much more than that, but it
does, you know, web servicesextremely well and other
functions, trying to give theentrepreneur everything they
need to be successful.
(29:05):
So there have been stores thathave built on Shopify that ended
up IPOing, and Shopify'sapproach is how can we make it
as easy as possible for anentrepreneur to build out a
business which is going to gopublic?
Well, how can they build out astore which is going to get the
most revenue?
So that's meant that Shopify'sdecisions around that haven't
(29:29):
necessarily been focused onbeing like the best store
builder it's.
They've been focused on how canwe make this the most useful
platform For store owners.
So they've added, like theyspent a lot of time with how
they think about paymentprocessing.
They spent a lot of time withhow they think about Integrating
marketing tools.
(29:50):
So you know, if you run a shop.
You can quickly start runningFacebook ads with a few clicks
of a button, and that's how wewant to think about mode most
dashboards for developers.
We want them to be able todeploy the applications quickly
but then have a lot of supportwith all the other tasks which
developers find difficult, right?
(30:10):
So back office tasks are prettycomplex in crypto, so we're
working with doubt toolingstartups like hedgy.
Then growth and analytics ispretty difficult as well, so
we're going to be integratingtools like spindle Safari, hype
lab for Advertising, sodevelopers will be very quickly
(30:33):
able to, you know, get up andlaunch campaigns growth
campaigns as well.
Speaker 1 (30:40):
Yeah, this is interesting because I think
where Shopify did really well isit started out as a solution
for essentially small tomedium-sized businesses, right,
anybody who wanted to get intoe-commerce but necessarily
didn't have a huge team to justbuild up a custom web store
right.
And because of that they wereable to grow so rapidly.
And, yeah, they're probablythose Enterprise stores which
(31:03):
initially did not really.
You know, they built their ownsolutions.
But even now you look atShopify and there's a lot of
enterprise customers that useShopify plus and I think this is
a great analogy, especially ifyou just make it easy for devs
to, you know, build out productsquickly and Just get them spun
up and be able to really rapidlyiterate an experiment.
(31:24):
I'm curious if what you thinkabout.
So one of the big issues I seein web 3 is that Security is
like this really slow processwhere you have to go through
multiple audits and they takelike a couple months and then
they come back to you with abunch of fixes and you fix them,
get another audit.
I think that's one of the bigroadblocks is do you have any
thoughts on how that could beaccelerated or improved?
(31:46):
I?
Speaker 2 (31:49):
Think that, yeah, there's.
You know, security is a huge, ahuge importance to every
project and yeah, unfortunately,there aren't really any
shortcuts there.
We can look at different kindof monitoring systems.
We can look at having closeRelationships with certain
(32:11):
auditors to support projectsthat come and build on mode,
like we'll be able to get themaudits done quickly.
But yeah, there's really no, noeasy solution and yeah, it's
something we have to takeextremely seriously.
We can always, you know,support projects that want to
run on test net, so there's notreal money at stake.
(32:31):
Maybe they want to test like agame and we would say let's do
an experiment on test net and,you know, maybe someone's going
to try and break it there.
Yeah, it is difficult becausethings in production, obviously
when the stakes are higher thanincentives are higher as well.
So it's a it's a difficultproblem to solve.
(32:54):
Right now.
We're, yeah, we're working withdifferent auditing firms, you
know, form partnerships so wecan support projects that want
to deploy to mode with grantsfor security audits.
But yeah, unfortunately, rightnow there's no easy solution to
that and yeah, we have to justencourage teams to take security
Extremely seriously and supportthem as in any ways we can.
Speaker 1 (33:19):
Got it.
Yeah, that's definitely one ofthe the key things where I think
there's definitely gonna be alot of innovation in the next
couple years in terms ofsecurity, tooling and whole
process around that.
So we'll be interesting to seehow that turns out.
And yeah, how do you see, withthis new revenue share model
right, how do you see itaffecting, like developer
(33:39):
incentives and how they approachbuilding a new project?
Speaker 2 (33:44):
Developer incentives.
Speaker 1 (33:46):
Yeah, in terms of the revenue share model.
How do you see that as comparedto like traditional grants?
Speaker 2 (33:51):
Yeah, so I think it needs to run in combination.
So you know we, if you're adeveloper and you deploy, deploy
contracts to mode and peoplestart using those contracts,
you'll start earning fees.
I'm not sure if those are gonnabe crazy high to start with.
You know, it might be a couplehundred dollars a month, it
might be a couple thousanddollars.
(34:12):
We're not quite sure yet.
That's like to be seen, butthis is like a great proxy for
us to give further rewards andfurther grants.
If we see a developer teamdeploys to mode and they're
starting to get some initialtraction, they'll start earning
fees and you know, we canpotentially look at how we can
support them to scale thatfurther.
(34:32):
The key thing we wanted to dowith fees is give developers a
way to start earning immediately, because a lot of feedback we
got from devs was that some ofthe grant processes are really
really hard to go through andDevelopers are kind of bored.
But they don't want to applyfor 10 different grant schemes
across 10 different chains.
(34:53):
They want a quick way to starttrying to earn and yeah, so this
is kind of our solution to that.
Speaker 1 (35:01):
Yeah that makes sense , but will you guys still be
doing grants as well, or wouldit just be the revenue share?
Speaker 2 (35:07):
Yeah, we will be doing grants and, but we'll be
focusing these on growth.
So the grants will be between10 and 25k and we expect the
teams to be spending this onyeah, growth campaigns for
launching, on mode.
Speaker 1 (35:19):
Got it, got it.
That makes sense.
Actually, I can see that.
Yeah, that makes a ton of senseand and Sorry, and one really
interesting question that I haveis how do you view bots in the
ecosystem?
Do you see them being a majorissue, since you're sharing
Sequencer revenue and othergrowth and referral incentives,
(35:41):
like you know?
Do you see people likebasically referring fake wallets
or referring bots or botnetworks?
Speaker 2 (35:47):
and yeah, just curious about that so it's kind
of like, as it stand, it'spretty civil proof because you
know You'd be paying a dollar infees to get like 20 cents back
right in fees.
So If you had like a big botnetwork you wouldn't be earning
money.
But potentially if we addfurther rewards or further
(36:09):
incentives on top, then yeah, Ithink there definitely could be
a risk of people trying to civilit.
We've got a few different ideasfor how we can reduce like the
attack factor there.
But yeah, it's a very hardproblem right now for developers
with sequencer fees.
We're probably gonna kick offwith a whitelist so we have like
(36:33):
a no hundred or two hundredapplications they're a
whitelisted to yeah, receivesequencer fees.
We also might just open up toeveryone.
We're not quite sure on thatyet, but we're testing that the
moment on testnet.
Speaker 1 (36:49):
Yeah, that totally makes sense, Especially what you
said about you know if, ifpeople refer each other, they
only earn a percentage, thatends up being a net sum for the
ecosystem.
Very, very interesting.
And yeah, james.
So I'm curious when can peoplefind out more about mode and
building on mode?
And are you guys also, you know, is there any opportunities for
(37:11):
VCs to get involved orCommunity members to get
involved?
Just curious how differentpeople can reach out and learn
more.
Speaker 2 (37:18):
Yeah, so I'm Jay Ross , treacher on Twitter, and Our
Twitter for mode is just modenetwork.
You can feel free to DM me ifyou're yet keen to hear more
about about what we're buildingor want to be involved in any
way.
(37:39):
And, yeah, if you're wanting toget involved with the community
, then yeah, I'd encourage youto check out the mode Twitter.
We often have like campaignsrunning that people can get
involved with.
We're running a load of growthexperiments.
We're trying to get creative.
We're about to kick off anexperiment on friend tech, so
that could be quite interestingfor people who want to get
(37:59):
involved.
So, yeah, awesome.
Speaker 1 (38:01):
Yeah, that sounds interesting.
So thanks for coming on to thepodcast and, yeah, best of luck
with the launch of mode andreally looking forward to seeing
what you guys do in theecosystem.
Speaker 2 (38:11):
Really appreciate the opportunity to chat to everyone
here.
Thank you so much.
Speaker 1 (38:17):
Yeah, and everyone.
If you are listening on Spotifyor Apple or wherever, give us a
rating and if you're on YouTube, give us a subscribe.
And Looking forward to the nextpodcast, cheers.
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