Demystify Octopus 2.0 — Octopus Network AMA by NEAR Foundation
On June 15th, Vivi Lin, partner and head of media at Octopus Network, participated in an engaging AMA session hosted by David Morrison from the NEAR Foundation. During the interview, Vivi Lin shed light on the basic ideas of Octopus 2.0, including how restaking works and the vision for the NEAR IBC port. She also elaborated on the benefits Octopus 2.0 will bring for Octopus and the stakeholders.
Check out the following excerpts to learn more, or you can listen to the audio recording on Spotify.
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Q1
David: Could you tell us about yourself and Octopus Network? We all know it is a key infrastructure at Near, but what exactly does it do?
Vivi: Hi David, very nice to speak to you again! Hi everyone, I am very happy to do this AMA on Octopus Network with all of you. My name is Vivi Lin, I am a partner of Octopus Network, which, as David correctly put it, is a key infrastructure at Near. A brief intro on myself, I come from a media background, used to work as a TV presenter and producer for global networks, such as Reuters Financial TV, covering the financial markets; stumbled into crypto around 2017, when I was doing a show about innovation in Silicon Valley, and I just went down the rabbit hole ever since.
So now, let me demystify Octopus Network for all of you. At its core, Octopus Network is a multi-chain network for launching and running application-specific blockchain, aka “appchains. Why is that important? Because we believe that Web3 applications with real use cases are the key to mass adoption, and our mission is to empower them to achieve successful real-world implementation. And one of the important steps is to help them build appchains in a cost-efficient manner, while providing them shared security, interoperability, essential utilities and a supportive community.
In this way, Web3 applications could customize many key features, such as their own transaction processing capacity, token, incentive models, and codebase. This allows them to run their applications without competing for transaction processing capacity from other applications on the network, while still benefiting from the security of the motherchain, which is NEAR Protocol.
One of the most important end results is it could greatly improve their user experience, which is key to onboarding users. That’s why Octopus serves as a key infrastructure at Near.
Q2
David: Octopus Network has announced Octopus 2.0 plan, could you tell us what’s that about?
Vivi: Absolutely. Before we get to the details of Octopus 2.0, I’d like to give you and the audience a bit of context first. As mentioned earlier, Octopus Network serves as an infrastructure to help web3 projects build appchains, and one of the most important features is to provide affordable leased security solutions for new appchains. We all know that validators are the backbone of any Web3 and blockchain project, as they maintain the security, integrity and functionality of any Web3 network. So for new projects, this is particularly important, because they might not yet have a large network of validators or the resources to effectively secure their network against potential attacks.
At Octopus, we have the Octopus Network Relay that operates as a smart contract on NEAR, providing a validator marketplace where validators stake $OCT tokens to validate a specific appchain. This structure allows assets and contracts between NEAR and any appchain to communicate seamlessly.
That’s basically what Octopus 1.0 is about, and now with Octopus 2.0, we are taking all of these offerings to the next level — Octopus 2.0 could be boiled down to 2 major things — one is restaking at Near as we will use $Near token instead of $OCT for restaking ; the other one is Near IBC.
To put it simply, through restaking with $Near, appchains could get security in an even more cost-effective manner, greatly reducing their bootstrapping process; and with Near IBC, the IBC protocol will be extended beyond the Cosmos ecosystem and will be connected with Near. Eventually, the series of IBC bridges we are in the process of building will connect Near with various other blockchains, including Cosmos, EVM chains, Polkadot and appchains using Octopus’ infrastructure. Just imagine the possibilities it provides for all the web3 projects, would be endless.
Q3
David: What is restaking and why has Octopus Network chosen to implement it?
Vivi: This novel concept of restaking was introduced by Eigen Layer, a project from Ethereum that has recently gained a lot of traction. It provides a mechanism that allows ETH stakers to “restake” their ETH that has been staked to Ethereum POS. Some even say that re-staking is the biggest thing that has happened to Ethereum since MEV.
We also found the idea of restaking deeply inspiring. Our founder Louis Liu extended this concept and applied it to the Near protocol, hence we introduced $Near restaking, giving $NEAR stakers the ability to secure appchains with their staked $NEAR.
If we dive deeper, what restaking does is to expand one of the most precious things in crypto, which is decentralized trust, and make it scalable. Our founder Louis has a very interesting analogy, comparing the potential of restaking to the alternate current revolution. Similar to how alternate current opened up countless applications and enabled long-distance transmission, restaking holds the key to transforming the landscape of decentralized trust, as it breaks the traditional trust bottleneck and reduces dependency on centralized platforms. Many doors will be open because of that.
Q4
David: Let’s say I am a NEAR community member, what benefits does restaking bring to the table for me?
Vivi: There are many.
For the $NEAR holders, the benefits are straightforward. Say if you are a NEAR validator, restaking allows you to multiply your earnings when you restake your $Near to validate other appchains.
For the broader NEAR ecosystem, the benefits are significant too. By enabling restaking with $Near, there will be more appchains and middlewares to use $Near as underlying staking asset, which will increase the value capture for $Near.
In addition, restaking encourages $NEAR holders to stake more, thus reducing the amount of $NEAR in circulation. This dynamic helps establish a healthier supply-demand balance for $NEAR.
If we look at an even bigger picture, Eigenlayer’s concept of restaking is seen by many as one of the most anticipated advancements for any PoS public chain. We believe the Octopus Network is uniquely positioned to leverage this concept for the benefits of NEAR, given our extensive experience in shared security since 2021.
Also something worth mentioning, which is in line with Near’s open web mission, at Octopus Network, we are also 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, when the functionality and security of the Restaking Base contract is mature. This will allow any blockchain wishing to establish its own security foundation through $NEAR restaking to do so in a permissionless manner, without the need for Octopus’ permission or paying any fees.
Q5
David: Let’s talk about the elephant in the room. You mentioned that restaking is done with the $NEAR token. What does that mean for Octopus token holders and $OCT?
Vivi: This is a great question — many people in the Octopus community have asked us about it. The essence of it is to create the pie bigger, so that everyone can get a decent slice, bigger than the ones from a smaller pie.
Obviously, we have $OCT holders’ interests at heart — $OCT holders will have the option of locking their tokens to appchains or sharing rewards with $Near restakers, without having to run a node or exposing the risks of being slashed. In this way, there is a secure and easy method for $OCT holders to maximize the utility of their holdings.
Now with Octopus 2.0, we will be able to create more value and expand our offerings and attract more appchains to our ecosystem.
This growth will increase our market presence and generate more revenues, and the value will be trickled down to the community, through many ways, such as some straightforward airdrops, $OCT buybacks etc; but more importantly when we create more value for the Web3 community, the $OCT holders will benefit from a thriving Octopus ecosystem without any doubt.
And on a bigger scale, using $NEAR for restaking, we align our interests more closely than ever, with the entire NEAR ecosystem, which in return, provides Octopus with more support that will be beneficial to the whole Octopus community.
So it is really a multi-win situation.
Q6
David: How does $NEAR restaking work?
Vivi: $NEAR restaking operates primarily through a smart contract known as the Restaking Base contract. To start the process, $NEAR holders deposit their tokens into this contract. Then they could delegate their $NEAR to any validator pool within the NEAR protocol that they prefer. Once this is done, they’re free to opt in with restaking to any appchains they choose.
Meanwhile, as mentioned earlier — $OCT holders could also opt in to lock their tokens to any appchain to their choice, gaining rewards without the necessity to operate a node or worry about potential slashing risks.
As for L1 staking rewards, 100% of the restaking rewards from the NEAR protocol will be given to $NEAR holders. When it comes to appchain rewards, 70% is distributed to $NEAR holders, and 30% will go to $OCT holders. 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.
Q7
David: One of the important pieces for Octopus 2.0 is the adaptive IBC with Cosmos, could you tell us more about it — how does it work?
Vivi: One of the core technologies of Octopus Network is trust minimal blockchain interoperability. At Octopus 1.0, all the appchains are Substrate-based and interoperable with NEAR and other appchains. At Octopus 2.0, we’ll take it to another level after the Octopus team has been working on IBC protocol for nearly 3 years with Interchain Foundation- Now we are building the NEAR IBC Port, which will connect the NEAR protocol with Cosmos.
In terms of how it works — we know that IBC is one of the most adopted protocols to handle value and data transfer between two blockchains, invented by Cosmos. In many ways, it has redefined the way blockchains interact with each other. However, just like the well-known “blockchain trilemma”, the “cross-chain trilemma” also exists, whereas it requires a balance or compromise between security, cost, and efficiency. IBC was designed with security as its top priority and it serves the Cosmos ecosystem well, but when it needs to verify a typical block header using a light client, between a Cosmos chain and a heterogeneous blockchain, aka non-Comos chain in this case, the gas costs could be significant.
To address this, the Octopus technical team has introduced the concept of “adaptive IBC,” which is to replace the light client with an off-chain verification proxy and a corresponding proxy client.
Let’s take the cross-chain transaction between NEAR and Cosmos as an example — the verification proxy will maintain the consensus of the Cosmos chain, verify all cross-chain messages, and sign them with its own key. Then on the NEAR blockchain, the proxy client only needs to verify one single signature, drastically reducing the computational work. The same setting is applied in both directions, making cross-chain transactions more feasible and cost-effective.
Now we do understand that the introduction of verification proxies can be seen as compromising the security of cross-chain bridges, that’s why we aim to avoid the pitfalls by building our verification proxies on a public chain that we call the “proxy chain”. This chain ensures the decentralization of the verification proxies to some extent — as long as its security level is not lower than those of the two chains it connects, it doesn’t necessarily compromise the overall system’s security.
On the other hand, we are also constantly looking out for better ways to upgrade and enhance security, for example, once the ZK consensus proof matures, we could replace NEAR side’s proxy client with a ZK verifier, and the verification proxy with a ZK prover, hence more secure.
Therefore, we think that’s a balance worth having.
Q8
David: I can see that Octopus also calls itself the Near IBC Port, could you elaborate a bit more on what’s the vision?
Vivi: Indeed, at Octopus Network, we envision making the NEAR Protocol a vital component for the Internet of Blockchains. Through the implementation of a variety of adaptive IBC bridges as mentioned earlier, we aim to connect the NEAR Protocol with other blockchains,and also to include EVM blockchains like Ethereum, Binance Chain, and Avalanche in the next steps. We believe that the NEAR IBC Port will create a wealth of opportunities for the NEAR ecosystem.
Q9
David: Are there any other projects pushing forward with IBC bridges between NEAR and Cosmos? Is there a competition or what’s the situation like?
Vivi: Yes, we are aware that there are other projects also focusing on developing IBC bridges between NEAR and Cosmos, such as Composable Finance. We have great respect for their work and appreciate the open-source nature of this space, where we can learn from each other’s works and achievements. That’s really the open protocols and open-source software.
We believe Octopus Network is uniquely positioned to expand IBC beyond the Cosmos ecosystem. We are actually the first to implement IBC on non-Cosmos blockchains — a journey that has been ongoing for over three years now. The extended research, development, and technological expertise have allowed us to come up with our unique solution, the adaptive IBC, as a very special and innovative value proposition. That gives us confidence to drive this initiative forward successfully.
Q10
David: Besides the IBC bridges, Octopus Network also extends its invite to Cosmos SDK-based projects. How are you going to attract them to build on Octopus?
Vivi: It’s a good question. You know that’s why I love the open nature of Web3 — there are projects providing security to Cosmos SDK-based chains, which we respect, but at the same time, we believe we have our own competitive edge.
For example, Octopus offers one of the most cost-effective, accessible, and flexible sources of security, as explained earlier, with our restaking offering. Cosmos SDK-based projects could leverage the resources and support from not only Cosmos, but also the NEAR ecosystem especially when it comes to validators and community support.
On the other hand, we have been building partnerships with the Cosmos ecosystem since 2020, such as the development of the Substrate IBC pallet, our NEAR IBC pallet — the adaptive IBC as mentioned earlier. We have also contributed to the Cosmos developers training and the Cosmos HK Accelerator, in a joint effort to foster more opportunities for Web3 projects in a multi-chain future.
All of these efforts will pave the way for winning the trust from the Cosmos ecosystem, hence being able to attract Cosmos projects to build with us. As a matter of fact, several Cosmos projects have already shown strong interest to launch with us in the Octopus 2.0 era. We are confident that this trend will continue.
Q11
David: When will Octopus 2.0 be launched?
Vivi: Our core team of developers are working very hard for the launch. We’re aiming to launch the NEAR IBC Port in August. And in the third quarter of this year, we plan to bring $NEAR Restaking live, and also be able to provide shared security services to Cosmos chains. We are deeply grateful for the support from our community, as well as the NEAR community. Hope we continue to grow and prosper together in this journey!
Q12
David: Can you please share where people can find out more? Can they join a Telegram or Discord group? What’s your website and Twitter handle?
Vivi: Yes, definitely. We have everything set up for our community to connect with us. The easiest way to get started is to visit our website. You can also follow us on Twitter for more updates. Once there, you can find all the entry points to join the Discord channel and Telegram. If you’re interested, you can become an $OCT holder and delegate your tokens to become an active member of the community. We also hold a community call on the 8th of every month on Discord. Additionally, we have articles posted on Medium, and you can follow us there as well. If you have any questions, our team is ready to assist you. You can DM us or send us messages on Twitter or Telegram, and we’ll be there to help.
Q13:
David: Is there anything else you’d like to shoutout? It doesn’t have to be related to Octopus Network, Web3, NEAR, or anything specific. We’d love to know you a little bit more.
Vivi: Besides the shout out for Octopus Network and NEARCON, I want to bring your attention to the latest AI frenzy, the chat GPT. Many of you are probably already using it, including myself. Being in the heart of Silicon Valley, I can see how people are crazy about how AI is changing the world. I want you to imagine a reality where we can combine AI and blockchain. This is one of the things we talk about when we discuss the decentralized trust and decentralized future that could finally happen. I know many of you are in the space or are very entrepreneurial. If you’re building Web3 projects, consider AI. If you’re building something AI related, consider using Blockchain as a tool to design a product that could change the world and make AI and Web3 good for humanity. That’s what I’ve been learning and researching and fascinated about. I’m not a technical person, but I love the vision and the power of these amazing tools coming into place.
Follow Octopus Network!
- Website: https://oct.network/
- Twitter: https://twitter.com/oct_network
- Discord: https://discord.gg/6GTJBkZA9Q
- Octopus DAO: https://forum.oct.network/
- Medium: https://medium.com/oct-network
- Telegram: https://t.me/octopusnetwork
- Youtube: https://youtube.com/channel/UCkMYDmXdgjCBTBggSEAy0ZQ
- Github: https://github.com/octopus-network
- Docs: https://docs.oct.network/
