Raising over $400 million in funding, processing $4 trillion in tokenized RWA, how did Canton Network become the "backstage blockchain" of institutional finance?
Written by: KarenZ, Foresight News
On June 24, Digital Asset, the developer of the privacy-focused blockchain Canton, completed a $135 million strategic round of funding, led by DRW Venture Capital and Tradeweb Markets. The investment lineup includes heavyweight players from traditional finance and crypto fields, including BNP Paribas, Circle Ventures, Citadel Securities, DTCC, Virtu Financial, Goldman Sachs, IMC, Liberty City Ventures, Optiver, Paxos, Polychain Capital, QCP, Republic Digital, 7RIDGE, and Virtu Financial.
[The rest of the translation follows the same professional and precise approach, maintaining the specific terminology as instructed.]- Users burn Canton Coin to pay fees, reducing circulating supply.
- Service providers (such as validators and application providers) can only mint new tokens by providing utility functions to the network, increasing supply.
- The long-term goal is to balance the number of burned and minted Canton Coins (stabilizing at 2.5 billion annually), thereby maintaining token value stability.
It is worth emphasizing that validators and super validators (composed of a validator and a Canton synchronizer node, participating in global synchronization) obtain the right to mint Canton Coin by running nodes and maintaining network security. Early super validators receive a higher proportion of token allocation to encourage network launch. Additionally, application providers can earn Canton Coin by providing services to users. "Featured Apps" (requiring super validator voting) can enjoy up to 100 times the minting rewards compared to their burn amount (early ecosystem incentive), while non-featured apps can mint up to 80% of fees as Canton Coin.
Canton Coin has a fair launch, with no pre-mining or pre-sale. In the first 10 years before the Global Synchronizer runs, the total minting of Canton Coin will be 100 billion, with a distribution ratio of 50% for infrastructure providers and 50% for application providers. After ten years, the annual minting will drop to 2.5 billion, gradually tilting towards application providers. Its economic model ensures long-term token value stability by dynamically adjusting supply.
Source:Canton Coin Whitepaper
From Pilot to Handling $4 Trillion RWA
Canton is suitable for scenarios requiring high privacy and high concurrency, such as finance, and has successfully supported tokenization and trading of various asset classes. For example: bonds, money market funds, repurchase agreements, etc.
The participants announced when Canton was disclosed in May 2023 include 3Homes, ASX, BNP Paribas, Broadridge, Capgemini, Cboe Global Markets, Cumberland, Deloitte, Deutsche Börse Group, Digital Asset, DRW, Eleox, EquiLend, FinClear, Gambyl, Goldman Sachs, IntellectEU, Liberty City Ventures, Microsoft, Moody's, Paxos, Right Pedal LendOS, S&P Global, SBI Digital Asset Holdings, The Digital Dollar Project, Umbrage, Versana, VERT Capital, Xpansiv, and Zinnia.
In March 2024, Canton completed a comprehensive blockchain pilot. This pilot project provided participants with distributed ledger applications for asset tokenization, fund registration, digital cash, repurchase, securities lending, and margin management transactions, all of which can interoperate through the Canton Network testnet. This pilot brought together 15 asset management companies, 13 banks, 4 custodians, 3 exchanges, and 1 financial market infrastructure provider. BNY Mellon, Broadridge, DRW, EquiLend, Goldman Sachs, Oliver Wyman, and Paxos provided market expertise for the working group throughout the project. Other pilot participants include: abrdn, Baymarkets, BNP Paribas, BOK Financial, Cboe Global Markets, Commerzbank, DTCC, Fiùtur, Generali Investments, Harvest Fund Management, IEX, Nomura, Northern Trust, Pirum, Standard Chartered Bank, State Street, Visa, and Wellington Management, with Deloitte as an observer and Microsoft as a support partner.
According to Digital Asset, in the first year since Canton Network's mainnet launch, the ecosystem has over 400 participants, with tokenized RWA exceeding $4 trillion and monthly transaction volumes reaching $2 trillion.
According to the latest report from RedStone, over half of digital bond issuances since 2022 were executed through Canton applications. HSBC Orion, Goldman Sachs Digital Asset Platform (GS DAP), BNP Paribas Neobonds, and Broadridge's DLR all use Canton technology. In January, Circle stated when acquiring Hashnote (a USYC issuer incubated by Cumberland Labs) that it also plans to provide native USDC support on Canton Network, enabling private transactions and USDC and USYC usage in TradFi markets.
Summary
Canton Network fills the gaps in existing public chains, combining smart contract functionality with privacy features, providing a viable solution for traditional asset tokenization. Through "selective decentralization" design, Canton allows financial institutions to tokenize assets while retaining control. This architecture makes it an ideal springboard for traditional financial institutions' digital transformation. For financial institutions seeking digital transformation but limited by existing system rigidity, Canton offers a progressive tokenization path and is poised to become a hub connecting traditional finance and decentralized finance.
References:
https://www.digitalasset.com/hubfs/Canton/Canton%20Network%20-%20White%20Paper.pdf
https://docs.daml.com/multiparty-application-intro.html
https://www.digitalasset.com/hubfs/Canton%20Network%20Files/Documents%20(whitepapers%2c%20etc...)/Canton%20Coin_%20A%20Canton-Network-native%20payment%20application.pdf
https://blog.digitalasset.com/press-release/digital-asset-raises-135-million-to-accelerate-adoption-of-canton-network
https://www.canton.network/ecosystem
