What is Canto ($CANTO)?

Canto is an EVM compatible Layer-1 blockchain built using the Cosmos SDK and Tendermint core that aims to provide popular DeFi services such as DEX and lending in an accessible and free manner for every one.

The first iteration of Canto is a permissionless general-purpose blockchain running the Ethereum Virtual Machine (EVM). The main tenet of Canto is that DeFi services should be made accessible, transparent, decentralized, and free.

*Learn more in our report discussing in details Canto ($CANTO) and other emerging new layer blockchain projects - Beyond Aptos, Sui & Canto | An in-Depth Guide to the Emerging Alt-L1s

What are the key features of Canto ($CANTO)？

For Canto, their core goal is to become the best execution layer for original work, by providing three key features:

1. Zero fees for liquidity providers (LPs): making liquidity free for protocols, traders, and arbitrageurs. 
2. Rent extraction resistance: in order to provide free public infrastructure, core defi primitives such as the decentralized exchange (DEX) and lending market will have no governance tokens. 
3. Minimal viable user capture: core public infrastructure will have no public interfaces, thus users will have to trade on third-party aggregators, to facilitate user acquisition for protocols building on Canto. 

At launch, Canto provides Tendermint consensus secured by Canto validator nodes and an EVM execution layer via Cosmos SDK in addition to core financial primitives designed to support the Free Public Infrastructure (FPI). These primitives include:

• Canto DEX: a zero-fee DEX for liquidity providers
• Canto Lending Market (CLM): a pooled lending Compound v2 fork
• $NOTE: a fully collateralized unit of account token issued by the CLM which also serves the ecosystem as a USDC/USDT soft-pegged stablecoins.

Who created Canto ($CANTO)?

The team behind Canto operate anonymously and refer to themselves as a loosely organized collective of chain-native builders, and call themselves contributors. The team oversaw the launch of the network from testnet to mainnet, and continue to run both the Twitter account and Discord community. 

• @scott_lew_is: Co-founder of DeFi Pulse and Slingshot
• @RobinWhitney_: Formerly of Acala and Karura
• @rxwald: DeFi Pulse, Slingshot
• @0xzak: Co-founder of Slingshot, Advisor: DeFi Pulse

What is the tokenomics of $CANTO?

The Canto utility token ($CANTO) is the native token of Canto and is used to pay for transactions on the network and can also be staked with validators to help secure the network.  

Liquidity Mining Incentives

In order to compensate LPs for providing capital to Cantos zero LP fee DEX and to help distribute CANTO in a fair manner, a liquidity mining program will release tokens linearly per block to LP token holders. We ensure that there will be suitable liquidity at launch by partitioning the genesis block into two sets of liquidity mining incentives. The first block of tokens will provide incentives for LPs for the first six months after Canto launches and the second block will provide incentives for a longer term multi-year period. We make the incentives sufficiently large enough to ensure that liquidity is freely available for the vast majority of trading activity while accounting for high expected volatility in the initial phases of Cantos launch.

Liquidity Mining Emissions

Medium-Term Liquidity Mining is expected to consist of six month-long epochs. The first epoch will start at launch and will distribute 5.83% of the token supply. The Canto DAO has onchain control over all liquidity mining schedules. As the first epoch concludes, the DAO may choose to pass a proposal to begin a second epoch.

Long-Term Liquidity Mining is expected to continue liquidity mining after the Medium-Term Liquidity Mining allocation is emitted. The Long-Term Liquidity Mining reserves may be emitted over the course of 10 years, or any other schedule the DAO chooses.

Staking Incentives

Canto aims to bootstrap network security through a policy of minimum viable issuance of new tokens to stakers. We achieve this objective initially by issuing a flat amount of tokens linearly per block to stakers in a manner similar to LM incentives. Cantos high inflation allows market participants to effectively price the excess returns on liquidity mining relative to the expected impermanent loss. As Cantos financial primitives become more liquid over time, we expect that this premium converges rapidly to its fair value as new information enters the market.

Security Emissions

Network security emissions will start around an inflation rate of 200M Canto per year for the first 30-day period, minting ~16m new CANTO tokens. The LM reward per block mined will be ~37 CANTO. Every subsequent period will face exponentially decaying security emissions.

Grants for Settlers of Canto

We are grateful to all those who have participated in the Settlers of Canto testnet event, and have decided to distribute 20M tokens to Settlers.

Filtering Criteria

In order to identify real, active Settlers, we subjected participants to a selection of examinations aimed to determine both the likelihood of them being a real human and becoming a Canto contributor. Settlers were scored and granted based on the following:

• Feedback: All feedback responses that were viewed relevant, coherent and original were counted.
• Chain Score: Wallet addresses that had activity across Ethereum and its L2s received higher scores. We accounted for transaction history across ETH, Polygon, Optimism, and Arbitrum. NFT ownership, ENS ownership and other signals were included. The greater the activity, the higher a Settlers chain score.
• Twitter Score: We took metrics from the Twitter accounts of each Settler, such as the Twitter activity and followers, and issued a significant penalty for accounts focused on giveaway promotions and airdrops.
• Canto Score: Every address was assigned a Canto score based on the number of transactions an address made on the Canto Testnet, along with if they completed the Settlers Goals (lending LP tokens in the Canto Lending Market, etc.)

At genesis, CANTO was directly sent to the eligible wallet addresses used to participate in Settlers of Canto. In total, 9364 Settlers were eligible to receive Canto from the event.

Canto (CANTO) is an EVM-compatible layer-1 blockchain with a core focus on making Decentralized Finance (DeFi) free to use. It forms part of the Cosmos (ATOM) ecosystem of interoperable chains and decentralized applications (Dapps) and has enjoyed a rapid ascent since its launch in August 2022, due to its original vision.

Canto aims to deliver on the early promise of DeFi by providing the best execution layer and incentivization for original development work and making new systems accessible, transparent and fully decentralized. Canto is a grassroots project by a stable of DeFi advocates and didnt benefit from any venture capital (VC) or presale raises.

Canto was founded by a team of DeFi advocates and is led by DeFi Pulse co-founder Scott Lewis and the founders of Slingshot Crypto and Plex. Lewis serves as leader and contributor, while Plex helps to develop the networks frontend and free public infrastructure. NeoBase manages the Canto EVM blockchain explorer and also created a useful analytics dashboard to help Canto navigate utility tools such as CLM and the Canto DEX.

Canto has several unique features that set it apart from other blockchains in the DeFi space, with a big part of its success its anti-establishment approach and designs on freeing DeFI tools for mass use. It has no official foundation, token presale, or vested tokens and essentially aims to provide feeless DeFi services to all crypto users.

It does this by establishing what it calls free public infrastructure for three core DeFi primitives, namely decentralized exchanges (DEX), stablecoins and lending market protocols. To this end it has its own Canto DEX, Canto Lending Market (CLM) and NOTE to connect 3 different parties: liquidity providers, stakers and users.

They fit into the Canto ecosystem as follows: Liquidity providers who deposit tokens into the Canto DEX earn CANTO tokens as reward; Stakers govern and expand the Canto Lending Market while also incentivizing work by developers; Users create network effects and enjoy the benefits of zero fees.

To ensure that these tools remain free to use for everyone, its infrastructure does not allow its main DeFi primitives to issue governance tokens or seek rent from future users in the form of fees.

Considering liquidity a free public good, Canto strives to remove all centralized elements from its chain and charges zero fees from liquidity providers such as other protocols, traders and investors who offer arbitrage.

The Canto DEX is not subject to any upgrades, does not have an official interface and will remain free to use through the Slingshot DEX aggregator, whose founders also co-founded Canto. It uses an automated market maker (AMM) mechanism to source liquidity from liquidity pool (LP) trading pairs and rewards their creators with CANTO tokens which can be used as collateral for loans.

Cantos NOTE stablecoin is a dollar-pegged ERC20 token that serves as Cantos official unit of account, NOTE is over-collateralized by loans to CLM and perpetually repegged through an algorithmic interest rate policy and be borrowed by providing CANTO, ETH, ATOM or Canto LP tokens as collateral.

There are 423,437,418 CANTO tokens reportedly in circulation, out of a total supply of 1B tokens.

The distribution of CANTO is allocated as follows: 13% to contributors, 2% to settlers of Canto, 5% to future grants, 35% to medium-term liquidity mining, and 45% to long-term liquidity mining.

Canto secures its network using the Cosmos networks Tendermint Core consensus mechanism and Canto validators. It uses the Ethermint system for EVM compatibility.

Canto can be traded on BingX, BTCEX, Bitget, BitMart and Gate.io. You can find others listed on our crypto exchanges page. Those who want to keep track of CANTO prices live can download the CMC mobile app.