Octopuses are fascinating animals, with roughly 2/3 of their neurons distributed across their limbs. This means that each arm is able to control itself semi-independently from the central brain. Tentacles will collect and process information and then forward any relevant details to the brain, making more significant decisions. 🐙
What does this have to do with the Octopus Network?
Quite a lot, as we’ll uncover.
What is the Octopus Network?
The Octopus Network is a NEAR-based multichain, interoperable network that enables projects to launch and run substrate-based, EVM-compatible application-specific sidechains.
Substrate is an SDK that allows the creation of specialized blockchains for any use case. The framework it uses can easily be integrated with any Polkadot blockchain.
Octopus network is the brainchild of a team of initially eight engineers with extensive experience working in crypto, having worked on grants across L1s such as Cosmos, Solana, Flow, and Oasis. The team also heavily contributed to developing the IBC (inter blockchain communication protocol) for Substrate, so it’s fair to say they know what they’re doing.
Why application-specific sidechains?
The biggest challenges developers face when choosing a blockchain to build on are scalability and cost. Time and time again, we’ve seen general-purpose blockchains get congested just because one app was high in demand. Popular games like Axie Infinity have already moved to their own sidechain, and another game, My Neighbour Alice, started out entirely on its own chain.
Creating a blockchain specifically for an app allows developers to optimize for their needs, including achieving scalability and fast finality. Such a chain can then establish its own economic system and be governed using the chain-native token.
Why Octopus?
If you’re familiar with Polkadot, you might wonder if that’s not a perfect use case for Polkadot. However, bootstrapping a parachain on Polkadot is expensive. And then there is a supply shortage, as there are a maximum of 100 parachain slots (sidechains for Polkadot).
Similarly, with the Cosmos SDK, any project has to bootstrap its own security. This is important because, unlike other Layer-2 solutions, sidechains are their own blockchain and don’t inherit the security of the main chain.
What Octopus does differently is that it runs a Leased Proof-of-Stake system. This makes it more flexible and scalable than a shared security model. In practice, this means that while every chain has its own economic model, they pay for security in the native token $OCT. Users of the network decide which app chain to stake their tokens on, establishing a free market.
Security is provided through validators (capped at a 2-digit number) and delegators (users). Anyone in the system can challenge validators when they suspect malicious behavior using fraud proofs.
This model makes security more of a capital leasing process than technical maintenance.
It’s efficient and entirely made possible through smart contracts. Octopus itself does not have its blockchain. Its core, the Octopus relay, lives as a set of smart contracts on the NEAR blockchain.
Interoperability
Most apps will benefit from giving users access to stable assets, such as stablecoins. However, bootstrapping those requires high volume and a lot of capital. To still facilitate the use of stablecoins without having to build a cross-chain bridge themselves, the Octopus Network team decided to integrate the rainbow bridge.
Tokenomcis
$OCT is a non-inflationary token used as collateral to guarantee the security of app chains, for making governance decisions, and to endorse app chains.
Appchain Pipeline
To launch an app on the Octopus Network, projects must go through an application process and be voted on by the Octopus community. To attract and reward early appchain users, Octopus Network established it would pay 100k $OCT (with 3-year vesting) for the first 100 apps.
Currently, there are five appchains live on the network:
- Atocha, a puzzle game
- DEIP is a protocol for the creator economy to facilitate the creation and trade of intangible assets and derivatives
- Myriad: a decentralized Social Media project
- DeBio: a decentralized marketplace for medical and bioinformatics data.
Like an Octopus’ neurons work, each appchain that is part of the Octopus Network has its own decision-making powers regarding its economic model. With its leased security model, Octopus lowers barriers to entry for apps while giving developers the tools to create their own economies.
The team also runs an accelerator program to turn Web2 developers into Substrate developers, teaching them the technical aspects as well as tokenomics, product design, governance, regulation, and more in 10 weeks.
The network can potentially onboard many new assets and users onto NEAR through its appchains. It allows developers to spin up appchains quickly and then slowly increase security as required. I, for one, am looking forward to seeing which app is launching next on it.
More on Octopus on their website.
