Understanding Application-specific Blockchains — Octopus Network

9 min readMay 22, 2022

The world is gradually evolving and adapting to web 3.0. Web 2.0 platforms have delivered quite well in the area of user experience and interface but they are owned and run by companies that are aligned with maximizing profits and shareholder value.

Web 3.0 offers decentralized experiences running on Blockchains that are owned by the community, creating value for the community and also putting the community first. Value and profit are important but with web 3.0, it’s always the community first.

dAPPS, Appchains and Parachains

Web 3.0 brought about decentralized applications built on Blockchains through smart contracts.
There are thousands of applications that share a standard set of configurations on a generic smart contracts platform. They all share the transaction processing capacity of that particular network. Appchains give developers a dedicated transaction processing capacity.

Application-specific blockchains, also called Appchains are blockchains customized to operate a single application. Instead of building a decentralized application on top of an underlying blockchain like Ethereum, developers build their own blockchain from the ground up.

In simple terms appchains are dAPPS that have their own Blockchains. They are customized Blockchains that are built using substrate technology.
Parachains of polkadot and appchains of NEAR(octopus) are Blockchains designed or optimized for a specific use case that works in parallel with the main chain. Appchains are to near and Parachains are to polkadot and kusama with the first few parachains being Acala and Parallel while Debio and Myriad being appchains.

Why do we need application-specific blockcains(appchains)?

What is more important than use cases and mass adoption? Nothing of course

One of the main reasons we haven’t seen mass adoption might have something to do with bad user experience, let’s go a bit technical.
Suppose you are building a web3 application, a pharmaceutical supply chain, or a health insurance decentralized application, to do this you need a smart contract that you will deploy right on top of a blockchain stack, you would design your application within the smart contract framework.

But when it comes to matters that might affect your user experience, such as transaction fees, speed, time of response, product simplicity, there is not much you could do because you can only optimize your dApp on the blockchain you built on.

Now, other layers of the blockchain such as runtime and consensus could not be changed no matter what you do with the smart contract, that's how appchains come to rescue.

Imagine if an application could enjoy all the benefits of a blockchain, every functionality can be customized, when your users don’t like transaction fees, no problem, you could design it however you want so that your users can have the greatest user experience, you can customize even the underlying consensus algorithm, it’s all possible because the whole blockchain stack is in your hands.

Why Appchains over dAPPS

1. Performance- Each appchain, in POS setting will independently enjoy 1000 TPS throughput, and the computation cost is very low.
2. Customizability- developers can customize the entire tech stack of an appchain to fully optimize for a specific use case, while DApps have to follow the unified setting of the public chain.
3. Governance on-chain made available

4. Flexibility- Application-specific blockchains give maximum flexibility to developers

5. Security- developers can choose proven programming languages when building Appchains, can customise the cryptography, and don’t have to worry about potential bugs and exploitation mechanisms in a Virtual Machine.

OCTOPUS NETWORK
Octopus network is a brand new interoperable multichain crypto network born to bootstrap and run substrate based application specific Blockchains(appchains).
They run on Near protocol. Near is often referred to as a readily made scalability solution for existing Ethereum dAPPS but it is equally capable of handling a suite of other types of decentralized solutions such as Appchains.

Compared to other layer 1 platforms that can also accommodate appchains such as Polkadot or Cosmos, Near had some key technical and economical advantages.
Near offers Appchains a significantly less expensive security lease and doesn’t have a limit on the number of Appchains capable of being launched.
To put it simply, Near was chosen by Octopus over Polkadot and Cosmos because it’s simply more cost-effective, scalable yet friendly, and interoperable with networks like Ethereum than any other existing L1 solution.

How does the octopus network work.

Octopus network provides appchains with flexible leased security(LPOS). This is done through Octopus validators and delegators sitting on the supply side of the security leasing market.
Octopus Delegators can delegate their $OCT to Validators for a share in the staking rewards of an appchain’s native token. Staking rewards are distributed to Delegators directly after Validators collect a unified commission.

Octopus Validators stake $OCT tokens to validate a particular appchain and set up a node to run that appchain’s protocol. In return, Validators are eligible to receive the respective native token of the appchain they are validating.

If Validators misbehave (e.g. go offline, attack the network, or run modified software), they (and their Delegators) are slashed by losing a percentage of their staked $OCT. All punishments are applied to Delegators proportionally when their Validators get slashed. In this way, staking acts as a disincentive for malicious behavior.

Because $OCT holders are responsible for deciding which appchain they’d like to stake on, the Octopus Network works as a free market where appchains can lease the level of security they need at the market price at any time. Appchains can increase their level of security as time goes as well by increasing the number of their Validators.

Octopus Relay and Interoperability.

The Octopus Relay enables appchains’ interoperability with NEAR protocol and Ethereum via the Rainbow Bridge. Additionally, appchains can utilize an out-of-box IBC pallet to connect with any IBC enabled blockchains directly.

Any asset issued on Ethereum, NEAR, or any IBC enabled blockchain can be transferred into and utilized by Octopus appchains trustlessly. Conversely, any assets issued on appchains can be transferred trustlessly out to Ethereum, NEAR, and any IBC enabled blockchain.
With this, there can be interaction with Polkadot and it’s parachains and also with Cosmos.

Octopus Delegators can delegate their $OCT to Validators for a share in the staking rewards of an appchain’s native token. Staking rewards are distributed to Delegators directly after Validators collect a unified commission.

Because $OCT holders are responsible for deciding which appchain they’d like to stake on, the Octopus Network works as a free market where appchains can lease the level of security they need at market price any time. Appchains can increase their level of security as time goes as well by increasing their number of their Validators.

Based on seamless interoperability between the Octopus Network and NEAR, the variety of crypto assets issued on Octopus appchains will also contribute to the prosperity of NEAR’s DeFi ecosystem.

How do Appchains go live in octopus.

Substrate-based chains can become Octopus appchains by completing the following stages:

-Registration
-Audit
-Voting
-Staging
-Booting

Registration Stage.

Any Substrate-based chain can apply to become an Octopus appchain. Registration requires a white paper or spec and a runtime release that has been internally tested and audited. To prevent abuse, the registration requires a small deposit of $OCT.

Audit Stage

After the appchain is registered, members of the community task force 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.

Voting Stage.

Once an appchain has passed the auditing phase, it enters the candidate queue where it will be upvoted or downvoted by $OCT holders.
In a rolling period that lasts one to two weeks, the appchain that ranks first with the most number of upvotes minus downvotes in the queue will enter the staging state as the most supported appchain by the Octopus Community.

Staging Stage.

In the staging stage, $OCT holders can stake or delegate on the appchain.
When the staging period ends, if the appchain has attracted enough staking beyond the security bottom line, it will enter the booting state.

Booting Stage.

In the booting stage, task force members will run 4 bootstrapping nodes to start the appchain. Then Validators should run their nodes to join the appchain consensus.
The Octopus Network will also run a full node cluster for each appchain and provide API access services to the appchain’s front-end. Appchain developers then just need to update the front-end configuration, and the appchain is ready for end-users.

Good examples of appchains currently running are Decentralized bio(Debio network) and Myriad social. Near health is looking to explore the possibilities of launching an appchain that contains medical data of patients with different levels of privacy. Delicate medical records or data will require some level of verification from the patient for access to be granted and basic medical data will be easily accessible. Flux protocol can be integrated so that basic medical data of patients can be updated always through the internet of medical things.

Decentralized Bio.

Is the anonymous-First Appchain for Medical and Bioinformatics Services & Data.

It allow users to sample and test anonymously, without leaving home. Empower labs of all sizes to collaborate on analyzing genetic and medical data, and offering joint biomedical products

$OCT Token.

What is $OCT?
$OCT is the native token of the Octopus Network. It is a fungible, non-inflationary token. $OCT serves three primary functions in the Octopus Network Ecosystem:

-Collateral to Guarantee Appchain Security; Octopus Validators can stake $OCT tokens to validate a particular appchain and set up a node to run that appchain’s protocol. In return, Validators
are eligible to receive the respective native token of the appchain they are validating.

-Governance; $OCT holders are entitled to control the governance of the network by forming the Octopus DAO. A sound and widely participated-in governance will give $OCT holders more stable value expectations and suppress extreme fluctuations in the token price.

-Appchain Endorsement; $OCT holders have the right to choose the best appchain projects by upvoting or downvoting them in the appchain candidate queue.

$OCT has a fixed supply of 100 million, the value is deemed to increase as more Appchains are onboarded. More Appchains means more $OCT tokens are being delegated and with this increase comes scarcity, with scarcity comes increase in value of $OCT.
Note: this is not a financial advice

Octopus accelerator program.

$1M USD per year directly supports 20 appchains through the Octopus
accelerator program. The Octopus accelerator program is a collection of open and
composable courses and seminars offered quarterly on topics such as token
economics, web 3.0 product design, crypto project fundraising etc.
The accelerator program is available to substrate developers and web 3.0 teams
worldwide. At the end of each class quarter, a demo day event is held after which
the Octopus foundation selects the top five appchain projects and provide them
with a $250k total reward.

Octopus Network is not only looking to onboard appchains but they also offer different levels of support in ensuring their survival. Near protocol makes this easier
The future is $Near.

Useful links:

Website: https://oct.network/

GitHub: https://github.com/octopus-network

Twitter: https://twitter.com/oct_network

Telegram: https://t.me/octopusnetwork

Join Near Health

Telegram:https://t.me/nearhealth

Twitter:https://twitter.com/NEARhealth_

YouTube: https://youtube.com/channel/UCVPJpJZvEPe2ZTHJ3344zog