Canton Staking

Canton Network is a layer 1 smart contract blockchain specifically designed for public network adoption of Real World Assets (RWAs) and traditional finance (TradFi) institutions.

Key Features

• Enterprise-Grade Privacy: Configurable privacy and controls that meet institutional and regulatory requirements
• Unlimited Scalability: Two-tier consensus mechanism enabling horizontal scaling while maintaining smart contract interoperability
• Atomic Transactions: The Global Synchronizer ensures atomic transaction settlement across the network
• Institutional Backing: Sustained by major financial institutions serving as Super Validators

Network Statistics

Since its launch in July 2024, Canton Network has experienced rapid growth:

• Over $6 trillion of tokenized assets supported
• Over $280 billion in daily US Treasury repo trade volume
• Over 500 Validators securing the network
• Over 30 Super Validators (major institutions)

Canton Network is designed to bridge traditional finance with blockchain technology, providing the privacy, compliance, and performance characteristics required by institutional participants.

CC (Canton Coin) is the native utility token of the Canton Network that performs the following key functions on the platform:

Token Utilities

• Network Fees: CC is used to pay application and infrastructure fees on the Global Synchronizer. Every transaction processed by the network requires a fee payment in CC.
• Validator Rewards: Validators earn CC through liveness rewards for maintaining infrastructure and staying connected to the network, as well as usage rewards proportional to network activity generated by their users.
• Governance: CC holders can participate in network governance decisions that shape the future development of the Canton Network ecosystem.

Unlike traditional blockchain tokens, Canton Coin was launched with no pre-mine, no pre-sale, and no special allocations to founders, VCs, or foundations. Every CC in circulation has been earned through participation in the network.

Canton Coin employs a unique burn-and-mint equilibrium mechanism designed to balance token supply with network usage:

Burn-and-Mint Mechanism

• Burning: Network usage fees are burned, removing coins from circulation when users transact on the network.
• Minting: New coins are minted as rewards based on participant activity every 10 minutes (each "round").
• Equilibrium Target: The network aims to issue and burn approximately 2.5 billion coins annually, creating a balanced token economy.

Fair Launch

Canton Coin had a completely fair launch with:

• No pre-mine
• No pre-sale
• No founder, VC, or foundation allocations

All CC in circulation has been earned through active participation in the network, ensuring a decentralized distribution from day one.

Reward Distribution Evolution

The reward distribution is designed to evolve over time. Initially, Super Validators receive approximately 80% of rewards to establish a strong network foundation. Within five years, Application Provider rewards increase from 15% to 62%, while Super Validator rewards decrease to 20%, shifting emphasis toward application-driven growth.

Canton Network uses a unique two-tier consensus mechanism that enables unlimited horizontal scalability while maintaining full smart contract interoperability.

Network Architecture

• Global Synchronizer: The central coordination layer that ensures atomic transactions across the network and maintains global ordering of events.
• Super Validators: Known institutions (akin to miners in other public blockchains) that secure the decentralized infrastructure. These are the core validators that maintain the Global Synchronizer.
• Validators: Additional network participants that earn liveness rewards for maintaining infrastructure and staying connected to the network.

Privacy and Controls

Canton Network is a layer 1 smart contract blockchain with configurable privacy and controls, specifically designed for public network adoption of Real World Assets (RWAs) and traditional finance (TradFi) institutions. This makes it suitable for enterprise-grade applications requiring regulatory compliance.

The network is sustained by over 500 Validators and over 30 Super Validators, supporting over $6 trillion of tokenized assets.

Canton Network uses a unique reward model where validators earn CC through liveness and usage rewards rather than traditional staking:

Liveness Rewards

Validators earn Canton Coin simply by being online and connected to the network. These "proof-of-life" rewards are distributed every 10 minutes (each round) based on:

• Running and maintaining a validator node
• Demonstrating continuous liveness (staying connected)
• Performance metrics (minimizing missed coupons/rounds)

Usage Rewards

Validators also earn rewards commensurate with the network fees that their users' activity consumes. When users transact through applications connected to a validator, that validator receives a portion of the fees generated.

Key Differences from Traditional Staking

• No stake required: Validators do not need to stake tokens to participate and earn rewards
• No delegation: Users cannot delegate tokens to validators for passive income
• No slashing: There is no penalty mechanism that burns validator tokens for misbehavior
• Licensed model: Validators are licensed participants rather than stake-weighted participants

Note: Only validators can earn rewards on Canton Network. Token holders who are not validators do not receive passive staking rewards.

Canton Network rewards are composed of:

Token Issuance (Minting): The Canton Network mints new CC tokens every round (approximately every 10 minutes). The annual issuance rate is set by the network's Decentralized Synchronizer Operator (DSO) configuration. Approximately 2.5 billion coins are targeted to be issued annually, though this is balanced by the burn mechanism.

Reward Distribution:

• Validator Reward Percentage: A portion of each round's issuance goes to validators as liveness rewards. This percentage is configurable by the DSO and represents the validator's share of new token issuance.
• Super Validators: Receive the largest share initially (~80%) for securing the core infrastructure
• Application Providers: Receive a growing share (15% initially, increasing to 62% over 5 years)
• Other Network Participants: Receive remaining allocations based on their contributions

Fee Burning: When users pay network fees in CC, these tokens are burned (removed from circulation). This creates deflationary pressure that counterbalances the new token issuance. The network aims for equilibrium between minting and burning.

Usage Rewards: Validators also receive a portion of transaction fees generated by users interacting with applications connected to their infrastructure. Higher network usage translates to higher validator rewards.

While Canton Network has several safety features built in, there are still considerations when participating in the network:

No Slashing Risk: Unlike many proof-of-stake networks, Canton does not implement slashing. Validators are not penalized by having their tokens burned for downtime or misbehavior. However, poor performance results in reduced reward earnings.

No Unbonding Period: Since Canton does not require validators to stake tokens, there is no unbonding or lockup period. This removes the risk of being unable to access your tokens during market volatility.

No Passive Staking: Token holders who are not validators cannot earn passive staking rewards. Unlike many other networks, there is no delegation mechanism for CC holders to earn yield by delegating to validators.

Burn-and-Mint Dynamics: The token supply is dynamic based on network usage. High network usage increases burning, potentially making CC deflationary. Low usage could lead to inflationary pressure as minting outpaces burning.

Protocol Security Risks: There is an inherent risk that the protocol could contain unknown bugs. This applies not only to participation but to your CC investment in general. Canton Network is designed for enterprise use and undergoes rigorous security reviews, but no system is without risk.

Regulatory Considerations: Canton Network is specifically designed for RWAs and TradFi institutions with configurable privacy and controls. Regulatory changes affecting tokenized assets or blockchain infrastructure could impact the network.

Please note that this is not an exhaustive list of all risks related to Canton Network.