FAQs
Frequently Asked Questions About Octopus Network.
Octopus 2.0
$NEAR Restaking is a mechanism that enables staked $NEAR tokens to be utilized as cryptoeconomic security for decentralized blockchains other than the NEAR Protocol. This gives $NEAR holders the benefit of earning multiple staking rewards using the same asset.You can participate in $NEAR Restaking by either becoming a validator or a delegator.Validators set up a node and restake $NEAR to run the appchain's protocol. In addition, validators must ensure availability and correctness.Delegators have much less responsibility. Delegators can restake $NEAR on their choice of validator and receive rewards directly after validators collect theirs.
Running a validator on a live network is a lot of responsibility. Your delegators will be counting on you not to make a mistake and get slashed. However, running a validator can also be very rewarding — knowing that you contribute to the security of a decentralized network while growing your stash. The Octopus Network has a Validator Tutorial to help you get started. In addition, the team and other validators are available to help answer questions and provide tips on Discord — Go to the validators-delegators Channel.Please note: It is highly recommended that you have significant system administration experience before attempting to run your own validator node. You must be able to handle technical issues and anomalies with your node on your own.
Being a delegator does not require running a node. Instead, delegators can easily restake their $NEAR on their choice of validator for a share of the rewards.The Octopus Network has a Delegator Tutorial to help you get started. In addition, the team and other delegators are available to help answer questions and provide tips on Discord — Go to the validators-delegators Channel.Please note: When searching for validators to stake with, delegators should do their due diligence as they will share the risk of being slashed — If your validator gets slashed, you also get slashed. In addition, validators charge a commission fee of 20% of the block rewards.
Regarding NEAR Protocol block rewards, 100% of the rewards will be given to $NEAR restakers (Validators & Delegators). When it comes to appchains block rewards, 70% is distributed to $NEAR restakers, and 30% will be used to buy back $OCT tokens from the open markets and then burn them. The initial buyback-and-burn will be conducted manually by Octopus core team, with an anticipated protocol-driven automatic buyback-and-burn in the second half of 2024.In most situations, appchain rewards will be distributed in the appchain’s native token. However, the options could be flexible. It’s up to appchain teams and communities to decide how and how much will be paid to restakers.
Starting from 2.0, Octopus upgrades its value capture mechanism from staking rewards to a buyback-and-burn model. This means that $OCT token holders no longer need to stake any appchains to receive rewards.
Instead, 30% of block rewards from all Octopus 2.0 appchains will be used to buy back $OCT tokens from open markets and then burn them. The reason behind the change is that we noticed - despite the low staking barrier and a simple one-step process, not many $OCT token holders participated in any staking. And we understand $OCT token holders' anticipation for the token to appreciate, hence the buyback-and-burn approach will directly convert the revenues into market buying power for the $OCT token, in a more direct manner, which is more conducive to its value growth.
No, Octopus 2.0 can support any dedicated blockchains that use the Cosmos SDK framework, including middleware chains, decentralized storage chains, bridge chains, etc.
Octopus Network can provide for an unlimited amount of CosmosSDK-based chains by using a special construction where the Restaking Base is deployed on NEAR as a set of smart contracts.NEAR is a gen-3 blockchain that aims to solve scalability issues and allow both end-users and developers to enjoy the full potential of smart contracts and blockchain technology.Instead of relying on layer-2 tech, NEAR uses sharding to allow the network’s capacity to scale up as the number of nodes in the network increase, so there isn’t a theoretical limit on the network’s capacity.
Octopus core team are committed to an open and inclusive approach to $NEAR restaking. The team plans to relinquish control of the Restaking Base contract, and make it an integral, immutable part of the NEAR base protocol. That means - the Restaking infrastructure that Octopus built is permissionless, and any CosmosSDK-based chain that wishes to establish its own security foundation through $NEAR restaking can directly use it without the need for Octopus’ permission.
IBC (The Inter-Blockchain Communication Protocol) is the most comprehensive and open-source blockchain interoperability protocol that enables secure and permissionless transfer of arbitrary data, supported by the Interchain Foundation.IBC's light client-based interoperability removes the need for a trusted third party in cross-chain interactions, securing tens of billions in annual value transfers without a single exploit since launch.
The Octopus core team has always believed that generic purpose interoperability protocol is the key to realizing the vision of the Internet of Blockchains.IBC was invented by Cosmos and has served well for interoperability among Cosmos chains. However, when connecting Cosmos chains with other heterogeneous chains, aka non-Cosmos chains in this case, the implementation can be challenging.The Octopus core team has been working on implementing IBC across heterogeneous chains since receiving grant support from the Interchain Foundation three years ago. Ultimately, they have developed a solution called "Adaptive IBC" to address the extensibility bottleneck of IBC.
Simply put, Adaptive IBC introduces a decentralized verification proxy chain to run on-chain light clients. It keeps the trustless verification method of utilizing on-chain light clients to verify the integrity and validity of cross-chain messages and provide proof, but with a better cost structure, lower gas fees, and better extensibility. This solution addresses the challenges of cross-chain communication between heterogeneous chains, while maintaining trustlessness and decentralization.Adaptive IBC is not only adaptable across different types of blockchain networks but also to technological progress.To learn more about how it works, please read this article.
Octopus 1.0
A dapp is a web application with at least a portion of its backend residing on a blockchain. A dapp’s backend can be implemented in two ways — smart contracts can be hosted on a blockchain platform, or a decentralized application could live on its own dedicated blockchain. When a dapp has its own blockchain, it’s called an application-specific blockchain, or "appchain" for short.
Unlike smart contracts, appchains allow developers to customize their application in terms of governance structure, economic design, and even underlying consensus algorithm.
Appchains also give developers dedicated transaction processing capacity, which means that an application on an appchain doesn’t have to compete with other applications for transaction processing capacity on a network.
In addition, appchains can evolve quickly with legitimacy. Each appchain is a self-governed economy with code-defined explicit processes to reach agreements on protocol upgrades. And, thanks to Substrate, the primary function of on-chain governance is ready to use.
A Substrate-based appchain enjoys its transaction processing capacity exclusively, without competing for gas price with other applications, ensuring low costs and fast response times for its users.
The full stack of an Substrate-based appchain, including networking, consensus protocol, main runtime and other runtimes can be thoroughly optimized for its specific use case. In addition, a Substrate-based appchain has self-sovereignty, governed by its community.
Therefore, compared with other types of protocols, Substrate based-appchains have the advantage of fast evolvability. By removing the bottlenecks on scalability, customizability, and upgradeability, appchains are leading a Web3 innovation wave.
Octopus Network can provide for an unlimited amount of appchains by using a special construction where the Octopus Relay is deployed on NEAR as a set of smart contracts.
NEAR is a gen-3 blockchain that aims to solve scalability issues and allow both end-users and developers to enjoy the full potential of smart contracts and blockchain technology.
Instead of relying on layer-2 tech, NEAR uses sharding to allow the network’s capacity to scale up as the number of nodes in the network increase, so there isn’t a theoretical limit on the network’s capacity.
Any Substrate-based chain can register and apply to become an Octopus Network appchain. Registration requires a white paper or spec and a runtime release that has been internally tested and audited. (Registration requires a small deposit of $OCT to deter abuse.)
After the appchain is registered, Task Force members will audit it. The purpose of the audit is to ensure that the appchain has no known security vulnerabilities and that its application logic is consistent with its white paper or spec.
Once an appchain has passed the auditing phase, it enters the Appchain Candidate Pipeline, where its fate is determined by the $OCT holding community. In addition to being appchain validators and delegators, $OCT token holders own the right to select the best appchain projects by upvoting or downvoting in an on-chain Voting Queue.
Once an appchain project has been approved by the Octopus Network Community, it enters the Booting Stage. In the Booting Stage, TOctopus Network Task Force members will run four bootstrapping nodes to start the appchain — Then, validators should run their nodes to join the appchain consensus.
Octopus Network will also provide API access services to the appchain’s front end. Appchain developers just need to update the front-end configuration, and the appchain is ready for end-users.
The Octopus Network recognizes that appchain projects are the value creators of the network. While other multi-chain networks charge admission for appchains, Octopus considers appchain teams to be the most critical part of the community. So, Octopus is quite happy to share the benefits of network effect expansion.
To incentivize appchains, the first 100 launched Octopus Network appchains will be directly rewarded by 100k in $OCT. The first 100 appchains will receive four validators, one indexer, one [RPC/API] network and one multi-tenant explorer for free. In addition, we provide an additional 100k in $OCT rewards for the first ten launching appchains to recognize them as founding appchains.
The Octopus Foundation sponsors the Octopus Accelerator Program — a collection of open and composable courses and seminars available to both Substrate developers and Web3 teams worldwide.
The Octopus Accelerator Program offers a five week course each quarter. During each course, subjects offered will include Token Economics, Web3.0 Product Design, Community Building, Blockchain Governance, Crypto Regulation, Crypto Project Fundraising, and more. Invited experts will participate in seminars, provide videos on specific topics, and be available as mentors.
At the end of the course, the Octopus Foundation holds Showcase Day — a demo event to select the top five appchain projects and provide them with up to $250k in total grant funding per quarter.
The Octopus Foundation will directly fund 20 appchain projects through the Octopus Accelerator Program each year, granting them up to $1M per year.
You can search on your own for education about Substrate blockchains, or you can ask in the Octopus Network community! Our Github repos include a template called the Barnacle, which is usable for EVM and/or Rust/C++/js-based appchain logic.
Octopus Network is designed to audit and launch independent Substrate chains with technical and community support. While other ecosystems can match this offering, they do not specifically cater to new concepts or prefer community-based economies. Support for ethical off-chain integrations and innovations is also significant at Octopus Network.
Octopus Network provides solutions, tools, and technologies for Substrate blockchains — meaning that the macro configuration/setup is done in Rust. Substrate utilizes multiple runtimes and modules (best implemented in Rust) and can be utilized with languages including C++, Javascript, Python, and others. All blockchains in Octopus Network may integrate Solidity through the Barnacle-EVM template.
All blockchains in Octopus Network have a unique (Rust) IBC library and solution by default. It must be configured by the appchain itself — Octopus Network has no ability to control the chains in its ecosystem. A bridge between the appchain and NEAR is brought up during the booting phase (by default) and is maintained through a simple cross-chain MMR cadence, where each appchain and a designated NEAR contract keep pace every ten blocks.
Octopus Network does not use an independent blockchain itself, so while you may utilize NEAR Protocol for adjacent smart contracts, all dapps/appchains in Octopus Network are hosted on Substrate nodes hosted by community participants.
The sole purpose of staking $OCT is to provide security for appchains — They pay their rent in their native tokens to lease security from the market.
There are two staking opportunities available to the Octopus community: appchain validators and appchain delegators.
Validators stake $OCT to set up a node to run the appchain's protocol. In addition, validators must ensure availability and correctness. In return, validators collect a unified commission in the form of the appchain's native token.
Delegators have much less responsibility. Delegators can stake $OCT on their choice of validator and receive rewards directly after validators collect theirs. If the validator you stake on gets slashed, you will as well. Therefore, it is in your best interest to research the validators staking on the appchain you are interested in supporting.
The Octopus Network Staking Guide can guide you through in more detail.
For an appchain, all its Proof-of-Stake activities, such as staking, delegation, and unbonding, take place in the Octopus Relay. Each era (24 hours), a new version of the validator set is generated in the Relay and then transferred to the appchain by the Octopus Bridge in a trustless manner. All validator nodes for that appchain then update their validator set accordingly.
Rewards are calculated based on block generation and recorded per era. If the block generation of a validator meets the expected 80% in a given era, there will be full block rewards for that era. Reward amounts are also related to the staking amount of the validator node. The higher the staked amount, the higher the block rewards.
At the end of an era, an appchain will submit an era reward message to the Octopus Relay via the bridge. All validators receive the era reward in the form of the appchain’s native token, except those who failed to keep their nodes running properly. (Validators who fail to receive rewards for three consecutive eras will be forced to unbond.) Validators collect a unified fee of 20% as commission, and the remaining block rewards are distributed to delegators in proportion to their staked amounts.
Running a validator on a live network is a lot of responsibility. Your delegators will be counting on you not to make a mistake and get slashed. However, running a validator can also be very rewarding — knowing that you contribute to the security of a decentralized network while growing your stash.
Please note: It is highly recommended that you have significant system administration experience before attempting to run your own validator node. You must be able to handle technical issues and anomalies with your node on your own.
The Octopus Network has a Validator Tutorial to help you get started. In addition, the team and other validators are available to help answer questions and provide tips on Discord — Go to the validators-delegators Channel.
Being a delegator does not require running a node. Instead, delegators can easily stake their $OCT on their choice of validator for a share of the block rewards.
When searching for validators to stake with, delegators should do their due diligence as they will share the risk of being slashed — If your validator gets slashed, you also get slashed.
Delegating $OCT to a validator is a simple process. The Octopus Network has a Delegator Tutorial to help you get started. In addition, the team and other delegators are available to help answer questions and provide tips on Discord — Go to the validators-delegators Channel.
The unbonding period of Octopus Network is 21 days for two main reasons.
- Security: When a validator’s malicious behavior is discovered, there must be enough time to penalize the validator. Twenty-one days is the minimum period possible.
- Community Governance: Because the 21-day unbonding period earns no rewards, it's in the best interest of validators and delegators to perform their due diligence on an appchain to make an informed and comprehensive staking selection, reducing volatility in staking.
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