Introducing Octant

[octant]

Hey everyone! On behalf of Golem Foundation, we’d love to introduce Octant and explore positive-sum synergies with ENS ecosystem.

Introducing Octant

Octant, part of Golem Foundation, is a project that facilitates sustainable, community-coordinated impact funding at scale. We’ve demonstrated the power of sustainable funding of impactful projects by staking 100,000 ETH (~$363M as of today) and using much of the yield to fund broad based public goods in the Ethereum ecosystem.

Over the past year, we’ve distributed millions of dollars to hundreds of open-source and impactful projects builders, supporting important projects such as Protocol Guild, Tor Browser, Funding the Commons, L2BEAT, BuidlGuidl, and many others.

Need for Sustainability

Our experience has shown that most impactful, open-source projects / initiatives lack sustainability, often relying on one-time (grant) allocations without a sustainable flywheel.

We aim on solving this by:

• Creating a provably fair, open, and minimally biased funding mechanism
• Leveraging substantial treasury resources and funding streams for maximum impact, powered by the Web3 ecosystems native value generating streams
• Fostering a sustainable ecosystem for open-source, real-world impactful projects development
• Rewarding users for participation in the sustainable impact funding ecosystem
• Coordinating with other web3 ecosystem on funding specific deliverables/initiatives

By staking 100,000 ETH and donating the yield, we’re not just talking about change — we’ve actively started driving it. Our goal is to contribute to a better, more accessible, fair, and open world by making funding impactful projects truly sustainable.

Alignment with ENS DAO

ENS DAO has been stewarding sustainable growth and development of critical, onchain public goods infrastructure ever since its inception, with core ENS contributors being critical to the growth of Ethereum and the ecosystem, experiencing firsthand the need to ensure long-term sustainability — leading to the creation of the ENS Endowment.

We believe there’s a need for a similar Endowment for sustainable public goods funding at scale, and the Sustainability Pool in Octant v2 offers a promising solution: a shared pool to which Dragons (protocols with large resources) allocate their generated yield to fund impactful projects within the Ethereum ecosystem.

According to the ENS DAO Constitution, ENS DAO treasury could be used to fund other public goods within web3 based on ENS governance decisions:

”Any income generated to the ENS treasury is to be used first of all to ensure the long-term viability of ENS, and to fund continuing development and improvement of the ENS system. Funds that are not reasonably required to achieve this goal may be used to fund other public goods within web3 as ENS governance sees fit.”

ENS has launched and continues to grow successful public goods and ecosystem development initiatives — including the ENS Public Goods Working Group, ENS Ecosystem Working Group, ENS Small Grants, among others.

All of the above signals a strong alignment between ENS DAO and Octant, and we believe that together we could create a long-lasting, sustainable impact while funding what matters at scale.

Octant V2 Vision

The DeFi space has largely been disconnected from regenerative models (ReFi) and use cases such as impact investing and public goods funding. We need to bridge this gap and align incentives in a way that benefits both individual users and impactful projects.

The image above illustrates Octant V2 flywheel, which brings together diverse ecosystem participants and creates incentives for collaboration. Our goal is to align ecosystem players with varying motivations, fostering cooperation to achieve a balance between individual rewards and funding for impactful projects.

The diagram above illustrates the workflow of a Dragon (project with substantial principal capital) engaging with the system. The protocol allows individual Dragons to join and deposit capital into their own Dragon Vaults, while all Dragons contribute a percentage of their yield to the Sustainability Pool.

You can think about the Sustainability Pool as a Sovereign Wealth Fund that is used to fund public goods and impactful projects across the broader Ethereum ecosystem.

The Dragon Vault deploys that capital into yield-generating strategies. These strategies may include ETH staking protocols, DeFi protocols, etc. The Vault distribution is decided by the Dragon and can be divided between the Dragon Pool, Sustainability Pool, Regen Vault, and other pools/vaults the Dragon wants to utilize.

The community creates funding rounds from the continuously flowing funds into the Dragon Pool. Regens (community members) then vote with the accumulated tokens using an allocation method, and these votes determine how the funds are distributed.

Opportunities and Collaboration

We’re openly inviting ENS DAO to share your feedback and suggestions on this intro forum post. We see this as the beginning of our long-term, positive-sum collaboration that will directly benefit both ENS ecosystem and the larger web2 and web3 spaces.

With that said, here’re some collaboration opportunities:

1. Community Activations
   Meaningful community activations aligned with ENS DAO goals
2. Sustainable Impact Funding
   Allocating a % of the ENS DAO treasury to generate yield in the Protocol, and streaming a portion of those rewards to the Sustainability Pool
3. Integrations with the ecosystem
   Powerful integrations synergies with ENS ecosystem builders
4. Governance Contribution
   Engage in shaping the future of impact funding via collaborative governance.

It’s time for sustainable evolution

Our industry desperately needs bold experiments in sustainable funding for what truly matters. While experimental approaches may not always succeed, our efforts since Octant launched in summer ‘23 have already shown tangible results and meaningful impact.

We believe that co-creating and nurturing impact funding flywheel will lead to the evolution of how impactful projects and initiatives are funded, laying the groundwork for a sustainable future across the entire ecosystem.

We look forward to hearing your feedback. Thank you!

[nick.eth]

This is outstanding to see, and very strongly aligned with ENS’s vision. 100k ETH staked is a pretty stunning example of “putting your money where your mouth is” too!

My only worry is that the ENS Endowment, while healthy in size, is some way from being enough to sustain ENS if needed; personally I feel the Endowment needs to be returning more before ENS can sensibly look to make large investments elsewhere.

[jefflau.eth]

I echo similar thoughts to @nick.eth. I think what Octant is doing is an amazing endeavour, however the endowment is definitely lacking the returns to sustainably fund ENS for good. I do think we have a lot of great community members that are filtering great public goods projects, and also are also developing PG projects.

So whilst I think we aren’t in a position to contribute by making large investments at the moment, there is a case for using some of the PG working group’s work to filter good projects that have already received an ENS DAO grant, to also receive a complementary grant from Octant, given they may have proven themselves to be worth of PG funding.

[simona_pop]

Thank you for sharing this and thank you for joining the PG Call to share thoughts in depth and also take questions and answer concerns.

Once the new stewardship term commences, we can explore avenues for deeper collaboration and exploring interim steps in advancing the sustainable PG funding conversation keeping in mind points raised by @nick.eth and @jefflau.eth

[DHannum8]

I like this approach. GasHawk for example has received multiple ENS PG grants but have not been able to join Octant as we are not open source. We would love to be involved somehow if possible!

[octant]

We greatly appreciate the warm welcome — thank you @nick.eth @jefflau.eth @simona_pop @DHannum8 for sharing valuable feedback.

We understand the concerns, and Octant v2 is actually much more aligned with ENS Endowment than it might seem at first glance! In fact, it could help allocate more funding resources to ENS DAO’s strategical goals in the future. Let us elaborate:

The ENS DAO could still fund itself from ENS Endaoment while contributing relatively small amount of the generated yield (not the principal amount) into ‘Sustainability Pool’ to fund larger Ethereum public goods.

We’re co-creating a powerful, sustainable mechanism to fund impactful projects on Ethereum — including larger ENS ecosystem. We envision many Dragons (value-aligned ecosystem projects with substantial resources) contributing to the Sustainability Pool a certain % of their generated yield (not the principal amount) — think of it as a pledge to fund Ethereum public goods. Moreover, each Dragon contributing to the Sustainability Pool will have a say on how the funds are allocated to support impactful projects.

The first such Dragon is the Golem Foundation itself — we’re planning to contribute most of our yield returns (70-80%) from 100,000 ETH staked to the Sustainability Pool, proving our commitment and conviction. While most of the yield’s allocation will be solely decided by a given Dragon (ie. ENS DAO funding ecosystem projects, strategical initiatives, and covering its operational costs), 5% minimum yield contribution to the Sustainability Pool will be allocated collectively by all participants (ENS DAO community members, original Octant community, and other Dragons’ community members). This is about how we all come together to support Ethereum public goods.

In Octant v2 users can lock $ENS to claim individual rewards and optionally donate to public goods. If $ENS lockers will choose to donate their rewards, this will be matched with additional funding from the matching pool (QF mechanism). We’re creating a sustainable degen <> regen flywheel, increasing impact funding while tapping into people’s interest in financial upside. Additionally, locked $ENS may earn extra yield while being locked up and may be used for governance (voting).

For example, we have ~15.5% of GLM total supply locked in Octant — with community actively participating every quarter to help fund public goods (it’s by design that they have to be active every quarter in order to claim/donate the rewards). If you’re curious, learn more here.

With that said, there’re different possibilities of co-creating value together for ENS and greater Ethereum ecosystem. We’d love to explore starting with a relatively small experiment to prove that this is powerful primitive. The funds could be flexibly allocated from different value streams — be it revenue-generating mechanisms ENS DAO has (ENS names; % of yield generated from treasury management) or just depositing experimental amount into a pool and using it as a tool for ENS PG grants!

We’re playing long-term game, and would love to create more positive externalities together. From our side, we’d be happy to use (and are already doing so) our yield to fund open-source, public good ENS ecosystem long-term.

[nick.eth]

Thanks for the further explanation! What sort of relatively small experiment did you have in mind?

[DHannum8]

Does Octant plan on changing its stance on only providing funding to open source projects?

[octant]

@nick.eth

Thanks for the further explanation! What sort of relatively small experiment did you have in mind?

Hey Nick! At the high level, we’d love to see ENS open up a dragon vault in Octant v2 and generate yield with capital deployed in it. Fully owned and governed by ENS, this yield would be deployed back into the ENS community via grant funding strategy defined as best by the team. We’d love to jump on a call and flesh this out in more detail with you.

Introducing Octant

Does Octant plan on changing its stance on only providing funding to open source projects?

& Dan, we understand the concern. Communities will have different stances around what types of projects should receive funding, and Octant v2 will allow all Dragons to define the eligibility requirements that meet their communities needs.