Demystify $NEAR Restaking | Octopus 2.0 Series with Vivi Lin, Episode 2

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Omnity Network

5 min readAug 28, 2023

With Octopus 2.0’s pioneering $NEAR Restaking offering, Octopus Network delivers an unrivaled combination of cost-effectiveness, accessibility, and flexibility regarding security sources. This proposition opens the door to a host of benefits for Cosmos SDK-based projects, from substantial resources to robust support from both the Cosmos and NEAR ecosystems. Octopus Network is shaping an enriched and deeply interconnected blockchain environment that embodies our vision for a dynamic, inclusive, and forward-thinking digital future.

In the second episode of Octopus 2.0 Demystified Series, Vivi Lin dives deep into the mechanics and magic behind $NEAR restaking. How does restaking make one of the most precious things in crypto, which is decentralized trust, more scalable? What makes $NEAR restaking so essential for the Octopus Network and the broader NEAR ecosystem? And most importantly, how can stakeholders, from $NEAR to $OCT holders, benefit from NEAR restaking?

Demystify $NEAR Restaking | Octopus 2.0 Series with Vivi Lin, Episode 2

1. What’s Restaking?

Restaking, a concept that might be new to many, has started to dominate crypto discussions. Originally introduced by Eigen Layer, a project from Ethereum founded by Sreeram Kannan, restaking is a mechanism that lets Ethereum stakers re-utilize their staked $ETH, while still earning the interests, and to extend the security to additional applications on the network to earn additional rewards.

Investors have placed high bets on Eigen Layer, committing substantial funds to the project. Yet, these bets obviously did not come from pure speculation. With Ethereum’s staked capitalization hovering at approximately $32.5 billion and only about 16% of the circulating $ETH currently staked, the potential for restaking’s growth is huge.

2. $NEAR Restaking by Octopus Network

Octopus Network brings the brilliance of restaking to the NEAR Protocol with $NEAR restaking. Similar to Ethereum, $NEAR stakers will now have the flexibility to bolster security for applications — specifically appchains — with their staked $NEAR. Louis Liu, founder of Octopus Network, compares the potential of restaking to the alternate current revolution. Just as alternating current sparked countless applications and long-distance transmission, restaking is poised to make decentralized trust scalable. It can transmit PoS security across the borders of consensus and secure heterogeneous systems, rather than just the PoS chain itself.

3. The Benefits of $NEAR Restaking

For $NEAR Holders and the broder NEAR ecosystem:

If you’re a holder of $NEAR, the immediate advantage is the multiplied earnings you’ll receive by restaking your $NEAR to validate other appchains. This not only optimizes capital efficiency but also provides a more potent value proposition for $NEAR. As more appchains and middlewares utilize $NEAR as the underlying staking asset, value capture for $NEAR increases. This not only enhances its worth but also ensures a healthier supply-demand balance by reducing $NEAR in circulation.

And on a bigger picture, Eigen Layer’s concept of restaking is seen by many as one of the most anticipated advancements for any PoS public chain. Octopus Network is uniquely positioned to leverage this concept for the benefits of NEAR, given the team’s extensive experience in shared security since 2021.

One more thing worth mentioning — in line with NEAR’s open web mission, Octopus Network is committed to an open and inclusive approach to $NEAR restaking. The Octopus team plans to relinquish control of the Restaking Base contract, and make restaking an integral, immutable part of the NEAR base protocol, once the functionality and security of the Restaking Base contract is mature. That means any blockchain wishing to establish its own security foundation through $NEAR restaking can do so, without Octopus’ permission or paying any fees.

For $OCT Holders and Octopus Network:

To put it simply, $OCT holders will undoubtedly benefit from a thriving Octopus ecosystem. Firstly, $OCT holders have the option to lock their tokens to appchains or share rewards with $NEAR restakers without having to run a node or expose themselves to the risks of being slashed. This provides a secure and easy method for $OCT holders to maximize the utility of their holdings.

With Octopus 2.0, the team will be able to create more value, expand offerings, and attract more appchains to the ecosystem. This growth will increase market presence and generate more revenue for the Octopus Network. In return, these values will be trickled down to the community through various means, such as airdrops, $OCT buybacks, and more.

And on a bigger scale, using $NEAR for restaking, the Octopus Network has aligned its interests more closely than ever, with the entire NEAR ecosystem, which in return, provides Octopus Network with more support, and that will eventually be beneficial to the whole Octopus community.

4. How Does $NEAR Restaking Work?

At its core, $NEAR Restaking operates through the Restaking Base contract. As a $NEAR holder, once you deposit your tokens into this contract, you can then delegate them to your preferred validator pool within the NEAR protocol. Once set, you can choose to restake to any appchain. On the other hand, $OCT holders can lock their tokens to any appchain of their choice, receiving rewards without any operational hassles.

As for the rewards, 100% of the L1 staking rewards from the NEAR protocol are designated for $NEAR holders. Meanwhile, appchain rewards are split: 70% for $NEAR holders and 30% for $OCT holders. These rewards, predominantly in the appchain’s native token, can vary based on decisions from appchain teams and their communities.

The Octopus team is working very hard to bring $NEAR Restaking live in the third quarter this year, so stay tuned. Also, keep an eye out for our upcoming episode, where we dive into another groundbreaking feature of Octopus 2.0 — the NEAR IBC.

Demystify $NEAR Restaking | Octopus 2.0 Series with Vivi Lin, Episode 2

1. What’s Restaking?

2. $NEAR Restaking by Octopus Network

3. The Benefits of $NEAR Restaking

For $NEAR Holders and the broder NEAR ecosystem:

For $OCT Holders and Octopus Network:

4. How Does $NEAR Restaking Work?

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Written by Omnity plus-one