The locked value of Layer 2 Mode Network on Ethereum has sharply decreased by 99% from a peak of 582 million USD in May 2024.
Data from DefiLlama shows that the TVL is currently only about 4 million USD, accompanied by the price of the MODE Token dropping over 98%. After receiving 5.3 million USD in funding from the Optimism Foundation, the network had attracted significant liquidity through airdrops, but the DeFi projects on it are now generating almost no revenue.
MAIN CONTENT
The TVL of Mode Network has decreased by up to 99% from its peak in May 2024.
The MODE Token has lost more than 98% of its value from its historical high.
About 50 DeFi projects on the network are almost no longer generating revenue after the reduction of airdrop incentives.
How has Layer 2 Mode Network on Ethereum experienced volatility in 2024?
Layer 2 Mode Network has witnessed a severe drop in locked value in 2024. According to DefiLlama data, TVL fell from 582 million USD in May 2024 to around 4 million USD, a decrease of 99%.
This sudden drop reflects a major change in cash flow and network activity. The native MODE Token has also decreased in price from its peak by nearly 100%, profoundly affecting the entire ecosystem of Mode Network.
This decline is linked to the gradual reduction of liquidity incentives on the platform, causing a sharp decline in capital flow and the network's attractiveness.
Why has the TVL on Mode Network decreased sharply despite receiving funding from the Optimism Foundation?
Mode Network received 5.3 million USD in funding from the Optimism Foundation in January 2024, facilitating the inflow of capital into the ecosystem. Liquidity has been boosted through airdrop campaigns encouraging user and project participation.
However, as these incentives have been reduced, liquidity on the network has also diminished, causing nearly 50 on-chain DeFi projects to no longer generate expected revenue. Maintaining users and liquidity has become more challenging.
Moreover, the official website of Mode Network still displays a TVL of around 500 million USD, a significantly misleading figure compared to on-chain data, eroding investor confidence.
The sharp decline in liquidity and Mode Token price reflects an over-reliance on initial incentives rather than sustainable community strength.
Cryptocurrency financial expert, 2024
What impact does the discrepancy between the TVL data on the website and reality have?
The official Mode Network website reporting a TVL of around 500 million USD, while the on-chain data shows only 4 million USD, is a serious inconsistency. This undermines transparency and confuses investors, negatively affecting the project's reliability.
Inaccurate information can lead to poor investment decisions and even harm the reputation of Mode Network in the cryptocurrency market, which values transparency and real data.
Transparency in disclosing financial data is fundamental to building trust, especially in the DeFi sector where transparency is always prioritized.
Frequently Asked Questions
What is TVL and why is it important for Layer 2 Mode Network?
TVL (Total Value Locked) is the total assets locked on the network, reflecting the scale and financial health of Layer 2 such as Mode Network.
How much has the MODE Token decreased from its peak?
The MODE Token has lost more than 98% of its value compared to the historical high recorded in 2024.
How does the funding from the Optimism Foundation affect Mode Network?
The 5.3 million USD funding from the Optimism Foundation initially boosted liquidity but could not be sustained long-term as incentives decreased.
Why is the TVL data on the Mode Network website inaccurate?
The information on the website has not been updated or is intentionally misrepresented, causing the data to not accurately reflect the on-chain reality.
What is the impact of reduced airdrop incentives on the Mode Network ecosystem?
The reduction in incentives has decreased liquidity and revenue of on-chain DeFi projects, negatively affecting the network's vitality.
Source: https://tintucbitcoin.com/tvl-mode-network-giam-99-tu-dinh/
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