The world, Ethereum and Web3 require new resilient and sustainable mechanisms for resources allocation, including funding of socially-beneficial non-commercial projects, open-source software, protocol upgrades, and other initiatives that don't prioritize revenue maximization.
Ethereum, even in its current form, enables better funding models for the world, making its sustainability essential. It already shapes modern finance and impacts a broad community, but its future growth and development is not guaranteed. The key question is: how do we align resource distribution with community values over narrowly-defined private interests that don't capture various positive externalities?
Sustainability must be embedded into the systems and protocols we build and use daily. We can design appropriate incentives and feedback loops, integrating these mechanisms into processes and actions where they're easy to implement.
The component we are currently missing is effective capital formation. It is required to create sustainable pools of funding to experiment and then grow the systems for effective capital allocation.
<aside> 💡 Capital formation is an active process that creates effective mechanisms and incentives to channel value into capital allocation.
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Existing DeFi primitives mainly serve profit-oriented individuals and private entities. Although this isn't problematic by itself, today’s world calls for using this technology to improve capital access for public-interest projects, which often struggle with sustainable business models.
DeFi protocols with revenue streams can integrate directly with funding mechanisms, enabling more optimized, cost-efficent, and automated resource allocation. As technology rapidly evolves, time efficiency becomes increasingly critical for adapting to a changing world.
Ethereum Alignment signals our shared values with the Ethereum community and its technology. As we embed these values into protocols, token design and markets offer a way for ecosystem to demonstrate that alignment.
Octant connects DeFi revenue streams and under-utilized treasuries with onchain funding to create a full-stack system for supporting Ethereum’s common goods. It also helps direct capital to core infrastructure and ecosystem projects like Layer 2s, using programmable incentives to align funding with the network’s values.
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Octant is a financial protocol bridging capital accumulation with effective allocation, empowering communities to sustainably fund their ecosystems, simultaneously creating incentives to fund Ethereum's common goods.
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If you're unfamiliar with Octant, please refer to the https://docs.octant.app/. This documentation describes the first iteration of Octant, including its mechanism design and a user guide. For hands-on experience, feel free to explore the https://octant.app/.