25. Octant's Regenerative Funding: ETH Staking for Public Goods - Taipei 2023

[Music] hi uh as you said my name is James and I'm with a project called octant it's an app that just launched uh earlier this year and we're g to be chatting about octant regenerative funding how we're using uh eth staking rewards to fund public goods and so a little background on me I'm the head of community and doing all the community initiatives for for the project which is really cool because I've actually been a Community member um in this ecosystem since it started um otin is being developed by Goen foundation so one of the oldest um projects in the ethereum ecosystem and um um that that's important because our uh crowdfunding uh you might remember golden had a really successful crowdfunding event back in 2016 which we um we had a very large eth treasury that was generated from that and then a little bit further uh down the road in 2019 because the uh eth treasury had appreciated so well um golden became to separate entities so uh Golem uh Factory is still building their initial Mission which is a peer-to-peer Marketplace for computing power and then I work over on the Golem Foundation side which I'm sorry Golem Factory is still building their their initial Mission and then um Golem Foundation is pursuing other utilities for the glm token um without distracting from that that core mission that Golem Factory is is uh building so uh two separate projects working in the same ecosystem and so when ethereum transitioned over to proof of stake and we had this really large eth treasury that presented a really unique opportunity for us uh we realized we could stake our eth Treasury and then do something really interesting with it so when we were first thinking you know what are we going to do with this treasury we thought at first you know we could return the proceeds over to our community but we realized you know that's not very interesting and on top of that you know the the broader ethereum Community is probably not going to appreciate you know we're just siphoning funds from ethereum and then redirecting that back to to Golem so we realized you know we have a really interesting opportunity here how how can we program our values into a mechanism uh that's going to be a positive Sun game for both our community and then the broader ethereum community so that's where we're at with with uh Octon and so when you're thinking about what you need to fund public goods obviously you need money uh you can't pay builders in poops as much as poops are a lot of fun you know they're not going to pay the bills at the end of the day and then also when you're thinking about funding public goods you also need to to think about how you're going to be allocating uh those funds and so uh it's really important to have sustainability and then on top of that I'm going to be uh sharing today the the decision mechanisms and the trade-offs that we've decided um that we have with Octon here and so here's our idea we're going to be starting with some eth and then we're going to generate our Surplus through staking and then uh we're going to capture a part of that for for funding public goods and we need to create uh incentives for both participation and self-imposed Taxation so I'll explain uh how that works in a little bit here and so here comes octant woohoo all right so we staked 100,000 e um we're using solo validators and primarily using minority clients the health of ethereum's decentralization really important to us that's a big topic going on right now so if you're uh using Lio or coinbase or or something else like that maybe consider moving your your Capital over to to something else that's promoting decentralization um so understanding octant though so we have these eth staking rewards coming in and they're primarily split into two streams so I'm going to go over how those streams work and then show some visuals so you can kind of um understand the relationship with it all but we have um our eth staken coming in and then our user rewards are given to our users proportionally based on how much of our native token they lock into the um Octan contract so if you have 1% of our total Supply it's a fixed supply of 1 billion tokens then you're going to be receiving every 90 days 1% of what we generate in our staking income if you have 25% you're going to get 25% of our rewards every every 90 days so it's proportional all the way through for for user rewards um it's important to know that if you don't lock anything in you're not going to be getting any rewards and it's also important to know that we didn't want this to become a passive income generator so you need to take an action when we have this allocation window or this decision window open if you don't take any decision you're also not going to be receiving any rewards uh they go back to us to be restick to uh grow our validator account um the second of the ma the uh funding pools is our matching pool now that is determined it's a square root function of the entire amount of our token Supply that's locked into the Octon contract and if I'm losing you don't worry I have a really good vision Jo in a moment here to kind of show how this all uh uh comes together um also important to know that we do have costs so some of the rewards go to to Goen foundations so we can pay for the cost and then um with whatever is left over as I mentioned before uh goes back to go and Foundation as well to to be restak again growing the uh the rewards for both public goods participating in Octon and our users and so just kind of going through the flow of this here I don't know if this pointer is working no I'll just describe it so Goan Foundation uh top Center there uh sending the the eth treasury over to ethereum staking which then drives rewards to octant and so octant is then going to be um sending those rewards over to our users on a proportional basis now that's determined as I mentioned by how much glm is locked into the Octon contract and so users have a choice they can keep up to 100% of their rewards for themselves or if they donate part or all of their rewards to public goods then those um donations are leveraged through a matching pool so so your money goes further if you donate versus if you keep it for yourself and so kind of understanding how our our reward pools um uh uh interact with one another the the blue uh graph here this is uh based on the x-axis is a percentage of how much glm is locked into the contract as I mentioned before user rewards are proportional so 1% of rewards uh or 1% of our uh token locked into the contract you get 1% of rewards uh every 90 days and then the the square root function that I mentioned before for our matching pool it's a really unique way to to to um set this up because as we get closer to 100% of our total token Supply locked in well then we would have to give 100% of rewards to our users there wouldn't be any rewards left over uh for for public goods but we're really confident that we're never going to get to 100% so we should have a nice um uh solid amount of of rewards to to fund public goods at the end of the day so that's good news so as I was mentioning before um users can claim up to 100% of rewards uh forsel or they can allocate it uh to to projects um we we do these in increments of of 90 days because we do have these rewards slowly coming in over time and uh we need to accumulate a decent amount so that um things are exciting for for users and and uh projects that are participating um I'll go over here um and so the the matching reward pool that it's really important to understand that those are funds that can only go to public goods that are that are participating so users cannot um um claim those rewards at all uh for themselves so it's a it's a really cool setup because um say every single user in a given period except for one ends up being very self-motivated they keep all the rewards for themselves well that one user then is able that that donates is able to effectively leverage the entire matching pool uh however they they decide to donate so uh it's it's a really cool way that you know irregardless of how users end up behaving um there's a a very attractive matching pool to to fund public goods there um it's also important to know that we have a minimum funding threshold and uh one of the reasons for that is the last bullet point here and that users can change their vote as many times as they want during this two-e allocation window uh we we did that because right now uh our setup is is gasless and we're really interested in user behavior um be because we we're really interested in seeing you know because users can change as many times as they want with uh projects being right on the cusp will they decide to move their funds to projects that are maybe a little bit safer will they give uh maybe a little bit of funding from from a project that's doing really well to uh project that that just needs a little bit of a boost to get over that threshold we're really interested in these user Dynamics and and how they um more or less play out within this this window so the not so good as I was mentioning there's a little bit of trade-off associated with this this is a plutocracy at the end of the day and this is by Design um anything that we do with the treasury that we we uh that came to us from that 2016 crowdfund we have to design around the glm token and so uh this is one of the consequences of of that source of funding um it's as I mentioned before Octon is not trustless it's only partially decentralized right now we do have plans in the future to move more onchain uh but right now we are using our own servers for some of the aspects of octant uh the current design does allow for some low-risk economic attacks we're pretty confident they're never going to happen but at the end of the day they still do exist and then lastly as I mentioned before we do have to run these these epochs of 90 days to to bring eth staking rewards in and so that that does uh present some challenges uh I'm the head of community and you know getting people to stay engaged through these 90-day periods um when there's like you know some some engagement downtime so to speak it it does create like a fluctuation in how much engagement right now that we're seeing from the community but we do have some interesting ideas to to spice things up uh to make things more interesting throughout the the entire life cycle there and so we just ran our first round and we saw some really interesting results from that so I'm going to share a little bit about that here uh so we had about 14.3% of our total Supply locked into the contract for for this first round which is about 143 million tokens um so it was really exciting to to see you know a good turnout uh with this first round and so um the total user rewards that went directly to our users is about 102 eth and then um out of that our users ended up donating about 21 and a half eth there so so some pretty uh generous donations from from our user base um the matching reward so on top of that the the matching pool uh saw about uh 28.5 eth oops sorry about that about 228.50 eth and so uh on average our users saw a multiple of 41 so what what they ended up donating was multiplied by 41 uh going to these public goods project so it was really cool to see such a large uh leverage from our matching pool so we had 24 projects participating in total and then 19 of those uh ended up being above the the funding threshold there was a bunch of projects that were below that threshold that right towards the end uh we did see some of those user behaviors play out where um uh some of our users ended up uh moving some of their funds from projects that were doing really well and giving some other projects that were just under that cusp giving them boost to to get them across the Finish Line there so all in all we had about um 23 and a half% of the user rewards were donated and about 76 and a half% uh that were were kept for themselves so some more metrics here um the the top per four performing projects were protocol Guild Road key hypers certs and and tour projects so some really awesome projects there we're also really really H happy to see uh tour project you know not not being in the uh the ethereum uh Community really really happy to see that you know we were able to to move outside just pure ethereum projects there um and then some other interesting things that I saw um we had this Mode called Patron mode where rather than picking winners and losers you could just donate your entire user rewards to the matching pool and we saw seven users do that so that was really really cool to see uh such generosity from from our users um we had 515 users who ended up locking tokens into our contract and who were eligible to participate and then about three um 347 of them ended up donating so we did see some users there that that didn't take any action and as a result of that about 9 and a half eth that could have gone either to users or to public goods ended up being recycled uh back to Golem so what's next so we have our next round coming up uh the allocation window opens on uh January 17th and right now we have an open window if you are building a public good and you potentially want to participate in Octon then uh you can check out our website oct. build um come and apply uh we are accepting applications right now and we we I would be more than happy to help guide you through that that whole application Pro process some of the things we're we're really interested in and we're working is bringing more Capital to octant we had this really big announcement last week uh with a partnership with a project called D.

A D.A is a Distributive validator technology that's also um bringing in a a liquid staking token element to it and so uh we have some exciting things working on behind the scenes there uh with divas so some uh some exciting things to announce next year with that uh as I mentioned before we're going to be progressively moving more on chain with what we're calling Octon V2 and we're also researching different funding and allocation mechanisms we've heard some feedback from from projects that you know uh depending on which or where a project is in their development life cycle it can be really hard for projects that are at a much earlier stage to be competing with uh really big projects like protocol Guild or or you know these projects that are really well known and and and are doing really important work so we're thinking about about you know how can we potentially run these different rounds depending on where a project is within their development life cycle so exploring things like that and then uh we're also going to be experimenting with running mini mini rounds in the middle of eoch so as I said we have these like periods of downtime within the community so we're thinking about doing some some interesting things with the community to to kind of keep engagement going and uh ultimately supporting things that really matter in the space so yeah that's what we have going on really looking forward to 2024 it's going to be going to be a great year and here's what our app looks like so if you go to o. apppp Here's the the uh what what you'll see when you first come to it um here again uh the top eight projects from our first round we kind of keeping an archive until our next round begins and then when you're locking uh glm into the contract that's going to be the right hand side there and and uh ultimately where you're going to see but yeah go to octant app and you can play around with the app right now uh pretty cool to play around with in my opinion but I'm biased of course so if you want to learn more please sign up for info scan that QR code we're actually going to be setting up a newsletter uh both based around Octon and then more uh the Public Funding ecosystem we have some really interesting ideas for that so um please yeah scan the QR code if you're interested in learning more and then looks like everyone's done with that thank you appreciate [Music] it