Octant: A decentralized platform for financing public goods by the Golem Foundation (GLM)

Disclaimer: This article is part of a grant awarded by Octant. Our application was selected by an independent jury. The content of this article remains independent, and Octant had no editorial control over the published material.

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What is Octant?

Octant is a decentralized platform launched on Ethereum, designed to enhance crowdfunding for open-source or public goods projects that are essential to the cryptocurrency ecosystem. Developed by the team behind Golem Network (GLM), Octant provides a transparent and community-driven infrastructure to bolster engagement in funding projects that benefit everyone.

Octant allows users to vote on redistributing a portion of the Golem Foundation's funds (from staking rewards) to initiatives they deem most deserving or to contribute their own funds. This approach combines incentive mechanisms with aligned interests to mobilize the community effectively.

With Octant, the Golem Foundation adopts an experimental approach aimed at discovering sustainable funding models for public goods and understanding how communities engage with decentralized governance systems.

By collecting empirical data on participation and user behavior, the Golem Foundation seeks to refine governance models and demonstrate how communities can be effectively mobilized for collective decision-making. In essence, the initiative also serves as a large-scale experiment to aid the ecosystem’s development.

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How Octant Works

Octant operates through a unique model that blends community participation with decentralized project funding using the Golem Foundation's resources. The platform organizes the distribution of funds and encourages user engagement through 90-day cycles, known as epochs.

The Octant Reward Pool

When Octant launched on Ethereum's mainnet in August 2023, the Golem Foundation staked 100,000 ETH from its treasury. The staking yields fund the Octant Reward Pool, which is divided into two categories: User Rewards for participants and Matched Rewards to amplify donations made to selected projects.

Each epoch allocates 70% of staking yields to these two categories, while 25% covers the Golem Foundation's operational costs (validator management, Octant administration, development, marketing, etc.), and 5% replenishes a dedicated community fund.

GLM Locking Participation

To participate, users must lock a minimum of 100 GLM tokens on Octant. This non-custodial GLM-locking mechanism ensures users retain ownership of their funds, which can be unlocked at any time. However, to maximize rewards and influence, participants must keep their tokens locked for the entire epoch.

Rewards are calculated using a weighted average, considering the amount of GLM locked and the duration of locking. Higher amounts and longer locking periods result in increased rewards and voting power for fund allocation.

Allocation Cycles

At the end of each epoch, users have two weeks to decide how to allocate their rewards. They can:

• Claim rewards in ETH.
• Partially or fully donate rewards to selected public goods projects.
• Contribute to the matching fund through the Patron mode.

If a user takes no action, their unclaimed rewards are returned to Octant and staked again.

For a project to be eligible for community donations, it must meet a predefined funding threshold. Rewards for projects failing to meet this threshold are returned to Octant and staked again.

Quadratic Funding

Donations made by participants from their User Rewards are amplified by the Golem Foundation through a "quadratic funding" mechanism introduced in Epoch 4. This method calculates the ideal contribution based on the number of donors and the allocated amounts.

The purpose of this system is to favor projects supported by a broad range of contributors rather than a small number of large donors. Individual contributions are amplified relative to the number of donors, ensuring a more democratic allocation of resources.

Anti-Sybil Mechanisms

To ensure fairness, Octant incorporates anti-Sybil measures, such as using Gitcoin passports to adjust donation multipliers based on user trust scores. Users with scores of 15 or higher receive the highest multipliers, while lower scores are significantly reduced.

To find out more, discover Octant's documentation

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Octant Retrospective

Since its launch on the Ethereum mainnet in August 2023, Octant has completed five full Epochs, raising and redistributing over 1,464 ETH to approximately fifty public goods projects selected by the community. Simultaneously, users claimed 803 ETH as personal rewards, showcasing the platform’s success in balancing individual incentives and collective contributions.

Focus on Epoch 5

Epoch 5, held from July 15 to October 27, 2024, provides a snapshot of how a funding cycle operates. Here are some key metrics:

• 322.6 ETH allocated to public goods projects;
• 187.7 ETH claimed by users as personal rewards;
• 445 users, out of a total 898, chose not to claim their rewards;
• 14.9 ETH from unclaimed rewards were restaked;
• The 422 remaining users donated 17.6 ETH to selected projects;
• The Golem Foundation matched these contributions with 304.9 ETH in Matched Rewards, representing 94% of total distributed funds.

Supported Projects

Octant places a strong emphasis on supporting initiatives that meet public goods criteria, ranging from privacy protection to developer tools and data or information providers. Here are examples of funded projects:

• Protocol Guild: An on-chain collective funding initiative for research and development in the Ethereum ecosystem;
• Gitcoin: A platform enabling open-source developers to monetize or secure grants for their work;
• EthStaker: A community offering guidance, education, support, and resources for individuals interested in Ethereum staking;
• L2BEAT: A free data platform specializing in Ethereum layer 2s;
• Revoke Cash: A free security tool allowing users to review and revoke smart contract approvals;
• Web3.js: A collection of TypeScript and JavaScript libraries for Ethereum developers.

Evolution and Future Steps

Over successive Epochs, Octant has significantly evolved to fine-tune its model. The introduction of quadratic funding and anti-Sybil measures during Epoch 4 marked a milestone, enabling a more equitable and community-aligned distribution of funds.

Currently, Octant is nearing the end of its sixth Epoch. The next funding allocation window is scheduled between January 11 and January 25, 2025. Epoch 7 will begin on January 11, offering the community another opportunity to lock GLM tokens and contribute to the platform’s operations while funding the next wave of projects.

Explore Octant metrics on the app for more details.

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The Octant Community Fund

The Octant Community Fund is a financing mechanism established by Octant and overseen by a temporary Governance Council. Its goal is to support initiatives contributing to Octant's ecosystem growth and public goods projects. Additionally, it aims to explore innovative governance models and experiment with collaborative approaches for resource allocation.

The Governance Council, composed of six members, manages the fund, reviews project proposals, and supervises resource allocation. Proposals are evaluated based on predefined criteria, focusing on their potential impact on the Octant community.

The council organizes its work into three focus areas:

• Marketing
• GLM staking initiatives
• Public goods project collaborations

The Community Fund also aims to provide post-funding support to selected projects, including connections with key players and guidance for integrating into the ecosystem.

Although the Governance Council currently consists of a small group of members, efforts are underway to develop a more open governance framework. Over time, Octant plans to expand decision-making participation in the Community Fund to the broader community, implementing a structured framework to ensure effective and collaborative decision-making.

Note: OAK Research was selected by the Governance Council to participate in the second edition of the Community Fund, announced by Octant on January 3, 2025.