Canto is a permissionless, layer 1 blockchain running the Ethereum Virtual Machine (EVM), where developers build on top of it and execute it via Cosmos chain. It is built by the DeFi advocates with the goal to be the most decentralised, accessible, transparent and free DeFi application layer. 

The aim is to build DeFi primitives which exist as Free Public Infrastructure (FPI) and to be truly decentralised by cancelling centralised incentives as seen in the current protocols. For example, there is no official foundation, there was no presale or there is no vesting. As such, any community member can create resources, channels, imagery for Canto. From branding of canto to building on top of it, everything is being contributed by the community members. 

There are three core primitives to a DeFi ecosystem which makes it quite sustainable — DEXs like Uniswap/Sushiswap, Lend/Borrow like Aave/Compound, and decentralised unit of accounts like USDC/DAI.

Canto has designed three core primitives which are public utility protocols, to support the free public infrastructure and in turn, the ecosystem.

1. Canto DEX

A zero fee, decentralised exchange which uses automated market maker (AMM) to price assets, which derives liquidity from the pools. To avoid the possibility of future rent-seeking behaviour, the DEX protocol cannot be upgraded. The DEX does not even have an official interface, and will run in the state where there is no way to implement fees.

2.  Canto Lending Market 

Canto Lending Market is governed by canto’s stakers since they have a broad interest in the growth & development of the blockchain. The stakers do not have any incentive to extract rent at the application layer. 

3.  $Note & $Canto

$Note is an over-collateralized token, whose value is balanced towards $1 through an algorithmic interest rate policy. It is not a stable coin which is pegged to USD, but a token which has more than 1 USD as collateral — for every $Note in circulation — held by the Canto Lending Market. The supply of $Note is controlled by the smart contracts, which are ultimately governed by the Canto DAO.

The Canto network has its own token called $Canto. This token serves the following purposes, among others in the network: it can be used as payment for transaction fees, and it can be staked with validators to enhance network security.

Canto is a self-governing blockchain created with the Cosmos SDK and unique components. It has the capability to run EVM code due to Ethermint, a module that allows Solidity programs to run from the Ethereum network. It utilises Gravity Bridge as its bridge provider and has fully integrated Gravity into the Canto native UI for a seamless user experience.

Gravity Bridge is a trustless, neutral bridge between the Ethereum and Cosmos ecosystems built using the Cosmos SDK. It functions like any other cross-chain bridges, i.e by locking up a specific token on one side and creating a representation of that token on the other side. There is one critical difference, i.e Gravity Bridge uses the validator set to sign transactions instead of a multi-sig or permissioned set of actors. 

Because Note can only be borrowed and not created, and the supply and borrow rates are equal, a new system was needed to track the amount of interest paid for borrowing Note that goes to the Accountant and Community Treasury versus the amount paid to outside sources of Note. This is accomplished by constantly adding and removing liquidity with every action performed by an external user.

Implementation of Note’s architecture:

Canto introduces a unified governance approach, where the governance of the network and Free Public Infrastructure applications is controlled by holders of the network tokens. At launch, this allows Canto stakers to take part in the governance of the Canto Lending Market, the Canto DEX, and the network itself. Any additional components created under the Free Public Infrastructure model will also utilize unified governance as necessary.

The module provides the following key functions:

• Proposal Submission: Users submit governance proposals along with a deposit. Once the deposit reaches the minimum required amount, the proposal moves into the voting phase.

• Voting: Participants can cast their votes on proposals that have reached the minimum deposit threshold.

• Delegated Voting and Penalties: Delegators can inherit the vote of their validator if they don't cast their own vote.

• Deposit Recovery: Users who made a deposit on a proposal can retrieve their deposit if the proposal is accepted or if it never enters the voting period.

$CANTO is the main currency of the Canto network. It is used to cover the cost of transactions and can be staked with validators to ensure network security. At the launch of the network, the total supply of $CANTO is 1 billion tokens, with an initial circulating supply of 150 million tokens.

Token Distribution

Initial Supply (150 million tokens)

1. 130,000,000 $CANTO (13%) for initial contributors.

2. 20,000,000 $CANTO (2%) for Settlers of Canto who took part in the launch of the testnet.

Remaining Supply (850 million tokens)

1. 450,000,000 $CANTO (45%) for long-term liquidity mining to be distributed over the next 5-10 years

2. 350,000,000 $CANTO (35%) for medium-term liquidity mining to be distributed over the upcoming months and years

3. 50,000,000 $CANTO (5%) for future public goods grants

Inflation: To preserve the security of the Canto network, the maximum total supply of $CANTO increases over time at a continually decreasing rate. The tokens generated through inflation are distributed among $CANTO stakers based on their relative stake in the network.

CUMULATIVE VALUE BRIDGED 

TOTAL VALUE LOCKED

PERCENTAGE OF TVL BY CATEGORY

WALLET STATS

NFTs on Canto protocol has seen a healthy traction with volumes reaching as high as $2 million for the top NFT collection, i.e Longnecks. Alto market is the NFT marketplace on Canto with the most volume, and with zero fees, the marketplace is operating in true decentralised fashion. The topmost collection on Canto are Longnecks, Speranza, Shnoises, Cantographs, among others. There has been a good volume over the past month, with longnecks’ volume reaching as high $800,000.

Canto has seen a significant rise in volume and usage. Being launched in August, 2022, it is impressive what the community is building and how they aim to keep the core values of decentralisation alive. A radical approach towards decentralisation with no fee infrastructure designs makes the protocol stand out.

The community is working hard on the development of the blockchain from ground up. There are no centralised incentives, and they plan to not upgrade any of the base protocols and hence, different project will stem out of these protocols. Their model around fee rewards will be quite significant in their success. In future releases, the smart contracts will have a unique NFT attached to it, which will receive a portion of $Canto which was used in gas associated with the said contract. This can be a key breakthrough as many protocols/projects will be monetised on volume basis and not a set fee model. 

This will encourage developers and contributors to develop and build protocols/projects which are for public good. This model sounds apt, but will require a lot of inputs and experimentations. Overall, the protocol has just started and it can transform into creator economy.

Canto is a permissionless, layer 1 blockchain running the Ethereum Virtual Machine (EVM), where developers build on top of it and execute it via Cosmos chain. It is built by the DeFi advocates with the goal to be the most decentralised, accessible, transparent and free DeFi application layer. 

The aim is to build DeFi primitives which exist as Free Public Infrastructure (FPI) and to be truly decentralised by cancelling centralised incentives as seen in the current protocols. For example, there is no official foundation, there was no presale or there is no vesting. As such, any community member can create resources, channels, imagery for Canto. From branding of canto to building on top of it, everything is being contributed by the community members. 

There are three core primitives to a DeFi ecosystem which makes it quite sustainable — DEXs like Uniswap/Sushiswap, Lend/Borrow like Aave/Compound, and decentralised unit of accounts like USDC/DAI.

Canto has designed three core primitives which are public utility protocols, to support the free public infrastructure and in turn, the ecosystem.

1. Canto DEX

A zero fee, decentralised exchange which uses automated market maker (AMM) to price assets, which derives liquidity from the pools. To avoid the possibility of future rent-seeking behaviour, the DEX protocol cannot be upgraded. The DEX does not even have an official interface, and will run in the state where there is no way to implement fees.

2.  Canto Lending Market 

Canto Lending Market is governed by canto’s stakers since they have a broad interest in the growth & development of the blockchain. The stakers do not have any incentive to extract rent at the application layer. 

3.  $Note & $Canto

$Note is an over-collateralized token, whose value is balanced towards $1 through an algorithmic interest rate policy. It is not a stable coin which is pegged to USD, but a token which has more than 1 USD as collateral — for every $Note in circulation — held by the Canto Lending Market. The supply of $Note is controlled by the smart contracts, which are ultimately governed by the Canto DAO.

The Canto network has its own token called $Canto. This token serves the following purposes, among others in the network: it can be used as payment for transaction fees, and it can be staked with validators to enhance network security.

Canto is a self-governing blockchain created with the Cosmos SDK and unique components. It has the capability to run EVM code due to Ethermint, a module that allows Solidity programs to run from the Ethereum network. It utilises Gravity Bridge as its bridge provider and has fully integrated Gravity into the Canto native UI for a seamless user experience.

Gravity Bridge is a trustless, neutral bridge between the Ethereum and Cosmos ecosystems built using the Cosmos SDK. It functions like any other cross-chain bridges, i.e by locking up a specific token on one side and creating a representation of that token on the other side. There is one critical difference, i.e Gravity Bridge uses the validator set to sign transactions instead of a multi-sig or permissioned set of actors. 

Because Note can only be borrowed and not created, and the supply and borrow rates are equal, a new system was needed to track the amount of interest paid for borrowing Note that goes to the Accountant and Community Treasury versus the amount paid to outside sources of Note. This is accomplished by constantly adding and removing liquidity with every action performed by an external user.

Implementation of Note’s architecture:

Canto introduces a unified governance approach, where the governance of the network and Free Public Infrastructure applications is controlled by holders of the network tokens. At launch, this allows Canto stakers to take part in the governance of the Canto Lending Market, the Canto DEX, and the network itself. Any additional components created under the Free Public Infrastructure model will also utilize unified governance as necessary.

The module provides the following key functions:

• Proposal Submission: Users submit governance proposals along with a deposit. Once the deposit reaches the minimum required amount, the proposal moves into the voting phase.

• Voting: Participants can cast their votes on proposals that have reached the minimum deposit threshold.

• Delegated Voting and Penalties: Delegators can inherit the vote of their validator if they don't cast their own vote.

• Deposit Recovery: Users who made a deposit on a proposal can retrieve their deposit if the proposal is accepted or if it never enters the voting period.

$CANTO is the main currency of the Canto network. It is used to cover the cost of transactions and can be staked with validators to ensure network security. At the launch of the network, the total supply of $CANTO is 1 billion tokens, with an initial circulating supply of 150 million tokens.

Token Distribution

Initial Supply (150 million tokens)

1. 130,000,000 $CANTO (13%) for initial contributors.

2. 20,000,000 $CANTO (2%) for Settlers of Canto who took part in the launch of the testnet.

Remaining Supply (850 million tokens)

1. 450,000,000 $CANTO (45%) for long-term liquidity mining to be distributed over the next 5-10 years

2. 350,000,000 $CANTO (35%) for medium-term liquidity mining to be distributed over the upcoming months and years

3. 50,000,000 $CANTO (5%) for future public goods grants

Inflation: To preserve the security of the Canto network, the maximum total supply of $CANTO increases over time at a continually decreasing rate. The tokens generated through inflation are distributed among $CANTO stakers based on their relative stake in the network.

CUMULATIVE VALUE BRIDGED 

TOTAL VALUE LOCKED

PERCENTAGE OF TVL BY CATEGORY

WALLET STATS

NFTs on Canto protocol has seen a healthy traction with volumes reaching as high as $2 million for the top NFT collection, i.e Longnecks. Alto market is the NFT marketplace on Canto with the most volume, and with zero fees, the marketplace is operating in true decentralised fashion. The topmost collection on Canto are Longnecks, Speranza, Shnoises, Cantographs, among others. There has been a good volume over the past month, with longnecks’ volume reaching as high $800,000.

Canto has seen a significant rise in volume and usage. Being launched in August, 2022, it is impressive what the community is building and how they aim to keep the core values of decentralisation alive. A radical approach towards decentralisation with no fee infrastructure designs makes the protocol stand out.

The community is working hard on the development of the blockchain from ground up. There are no centralised incentives, and they plan to not upgrade any of the base protocols and hence, different project will stem out of these protocols. Their model around fee rewards will be quite significant in their success. In future releases, the smart contracts will have a unique NFT attached to it, which will receive a portion of $Canto which was used in gas associated with the said contract. This can be a key breakthrough as many protocols/projects will be monetised on volume basis and not a set fee model. 

This will encourage developers and contributors to develop and build protocols/projects which are for public good. This model sounds apt, but will require a lot of inputs and experimentations. Overall, the protocol has just started and it can transform into creator economy.