Octopus 2.0 Launch
Unpacking Its Core Values and Two Groundbreaking Contributions to the Internet of Blockchains
By @MiX
On December 17, 2023, Ottochain, the first Cosmos SDK appchain in the Octopus multi-chain network ecosystem, officially launched. This marks the stable operation of the Octopus Network’s shared security service based on $NEAR Restaking and the cross-chain service enabled by NEAR-IBC, signaling the official rollout of the Octopus 2.0 mainnet.
We extend a warm invitation to more outstanding Cosmos appchain teams to join Octopus’s multi-chain network ecosystem.
The $NEAR Restaking mechanism in Octopus 2.0 allows $NEAR holders to stake their tokens not only to the NEAR Protocol but also to Ottochain and potentially more appchains. Therefore, in addition to earning staking rewards in $NEAR, they can also receive additional rewards in $OCT, distributed by Ottochain, for restaking.
The multilayered compound yields offered by $NEAR Restaking represent the most capital-efficient staking method available today. Therefore, every $NEAR holder should consider participating in Octopus 2.0. For more information on how to get involved with $NEAR Restaking, please refer to this guide.
Ottochain, built on the Cosmos SDK and maintains compatibility and interoperability with the EVM, is initiated by the Octopus Nation community. It is dedicated to fostering collaboration and innovation among Web3 communities.
Expanding the Value of Octopus Network
Enhancing and Upgrading Multi-Chain Network Infrastructure
Octopus Network stands as a leading multi-chain network infrastructure project within the NEAR ecosystem. It aims to provide flexible and affordable leased security, out-of-box cross-chain interoperability, one-stop infrastructure, and a ready-to-be-engaged community for the appchains.
During the Octopus 1.0 phase, as illustrated in the “Octopus V1 Relay” section, validators of Substrate appchains utilized Octopus Network’s $OCT for staking, ensuring the security of these chains. The Octopus Network Bridge enables bidirectional, trustless asset transfers between Polkadot and the NEAR Protocol, and then NEAR’s Rainbow Bridge facilitates trustless cross-chain interactions with Ethereum. Additionally, Substrate IBC enables direct interoperability between Substrate and Cosmos SDK blockchains.
In the Octopus 2.0 phase, as shown in the “Octopus V2 Relay” section, the network further supports Cosmos SDK appchains. It introduced the $NEAR Restaking mechanism, elevating the level of security it can provide to a billion-dollar scale. This allows $NEAR holders to stake their assets to NEAR Protocol and also to appchains or middlewares within the NEAR ecosystem, enabling them to earn multiple staking rewards. Additionally, NEAR-IBC achieves direct cross-chain interoperability between NEAR and the Cosmos ecosystem.
The groundbreaking innovation of Restaking lies in maximizing benefits for all three participating parties: decentralized applications/blockchains, blockchains that provide shared security, and stakers. For more insights into restaking, please read this article.
Besides, Octopus core team has updated the $OCT tokens value capture mechanism in Octopus 2.0, transitioning from “staking income” to a “buyback and burn ‘’ model. 30% of the block rewards from all Octopus 2.0 appchains will be used to buy back $OCT tokens on the open market and then burn them. Initially, this buyback-and-burn process will be manual, with an expectation to automate it driven by protocol in the second half of 2024. Hence, $OCT token holders no longer need to stake in the 2.0 network.
The upgrade in the value capture method of Octopus 2.0 is based on the core team’s industry research and observations. 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. All future protocols launched by Octopus Network will adopt the buyback-and-burn model for value capture, collectively contributing to the value of $OCT Tokens.
It is important to note that Octopus 2.0 is a complement and expansion to Octopus 1.0. Both are running in parallel, and currently, there is no replacement relationship between them.
Core Contributions of Octopus Network
Shared Security & Heterogeneous Chain Interoperability
Octopus Network, with its two notable industry contributions, is increasingly becoming a key force in shaping the blockchain internet.
1. Establishing the Basic Paradigm of Shared Security Services
As a pioneer in shared security services, Octopus Network introduced the Leased Proof of Stake (LPoS) mechanism, creating a bilateral market for trading ‘decentralized trust’.
The LPoS, where ‘L’ stands for Leased, involves new blockchains using their native tokens as rent to pay nodes that validate using $OCT and $NEAR, thereby acquiring ‘decentralized trust’ for decentralized bootstrap and operation.
The so-called bilateral market for ‘decentralized trust’ involves demand from blockchains seeking low-threshold, cost-effective security for bootstrap and operation, and supply from validators using other high-value tokens.
Since its mainnet launch in October 2020, Octopus Network’s ‘bilateral security market model’ and the underlying logic of ‘leased security’ have become the foundational paradigm for shared security services. This mechanism has subsequently been adopted by others, including Cosmos Hub, EigenLayer, and even Babylon in their shared security services. For more insights into shared security.
Based on that, decentralized trust has evolved into a third-party service as flexible and rentable as cloud computing and cloud storage.
2. Introducing Adaptive IBC, Revolutionizing Heterogeneous Chain Interoperability
Octopus Network believes that an open, universal cross-chain interoperability protocol is the core and soul of the Internet of Blockchains. The IBC protocol proposed by Cosmos, enabling trustless cross-chain communication, can be regarded as the gold standard for cross-chain protocols. Its unique feature is the design of the light client. However, non-Cosmos SDK blockchains did not initially accommodate the light-client-based cross-chain mechanism of IBC, posing significant challenges for Octopus Network in building cross-chain infrastructure services for the Internet of Blockchains. Ultimately, Octopus Network made significant breakthroughs.
In 2020, Octopus Network proposed, developed, and maintained ICS10 within the official Cosmos IBC specification, known as Substrate-IBC, becoming the world’s first team to implement IBC on a non-Cosmos blockchain.
In 2023, Octopus Network proposed and completed NEAR-IBC, which was audited by Blocksec in October. The NEAR Client is currently under review, and once approved, will officially become part of the Cosmos IBC specification as ICS12.
After nearly three years of heterogeneous chain IBC development practice, Octopus Network identified a highly flexible, adaptable, and leading-edge technological path for IBC implementation in heterogeneous chains — Adaptive IBC.
Let’s take the cross-chain transaction between NEAR and Cosmos as an example — to add an off-chain verification proxy and replace the tendermint light clients with proxy clients. The off-chain verification proxy is a Cosmos light client maintaining the consensus of the Cosmos chain, validating cross-chain messages, and signing them. On the NEAR side, the proxy client simply verifies a signature. The principle is the same in the opposite direction.
The distinction of Adaptive IBC from centralized cross-chain bridges lies in running the verification proxy on top of the proxy chain. We chose the public blockchain ICP, which is decentralized and publicly verifiable, significantly enhancing security compared to multisig or other external validation cross-chain bridges.
Therefore, Adaptive IBC breaks through the scalability bottleneck of heterogeneous chain IBC. It can adapt to blockchains with various consensus mechanisms like NEAR, Polkadot, Ethereum, and is prepared for rapid advancements in validation technology. If, in the future, Cosmos adopts aggregate signatures, or NEAR supports ED25519 signature precompiles, the cost of direct verification on NEAR could be significantly reduced. This would allow the proxy client to be upgraded to a true light client and the corresponding verification proxy to be discarded. Once ZK cross-chain technology matures, the proxy client could be replaced with a ZK verifier, and the verification proxy with a ZK prover. These upgrades, completed through governance, are entirely transparent to the upper-layer applications.
Hence, Adaptive IBC not only adapts to the present but also to the future, always embracing the best available technology.
Disclaimer: This article is for reference only and should not be used as legal, tax, investment, financial or any other advice.
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