Supporting Canto as a Validator
Origianlly published at February 8, 2023.
Why should we support Canto?
Canto is a Layer 1 blockchain that operates on a permissionless basis and is fully compatible with the Ethereum Virtual Machine (EVM). Its primary objective is to realize the promise of decentralized finance (DeFi), where new models are easily accessible, entirely transparent, decentralized, and free from the confines of traditional financial systems. Notably, Canto’s launch was devoid of any central foundation, presale, vesting, or venture backers, emphasizing its commitment to complete decentralization.
At its core, Canto relies on the Tendermint Consensus and the Cosmos Software Development Kit (SDK) for security, with Canto validators playing a crucial role. It attains EVM compatibility through the Ethermint system, which creates an EVM execution environment, making it easier to deploy Ethereum smart contracts. Key components offered by Canto include the Canto Decentralized Exchange (DEX), Canto Lending Market (CLM), and NOTE.
Canto’s vision is to become the preferred execution layer for original work, characterized by several core principles:
Zero fees for liquidity providers (LPs): This means that protocol users, traders, and arbitrageurs can access liquidity without incurring fees.
Rent extraction resistance: Canto believes that primary decentralized applications (dApps) like decentralized exchanges (DEXs) and lending protocols should not have governance tokens that extract value from users.
Minimally reasonable customer capture: Canto aims to provide customer interfaces for primary public primitives, enabling customer acquisition for its protocols.
Canto is Built Different
Canto’s approach differs from many other DeFi projects. It presents a radical notion that core DeFi primitives should exist as Free Public Infrastructure (FPI). Having observed the growth of the DeFi space, from the launch of DAI in late 2017 to the emergence of many DeFi projects in 2021, three core primitives have emerged to anchor any healthy DeFi ecosystem: decentralized exchanges (DEX), lending markets, and a decentralized unit of account. While other projects introduce governance tokens that extract “rent” from users, Canto has launched these as Free Public Infrastructure (FPI). This means that users can engage with Canto’s offerings for free, with governance being handled within the chain itself.
As the ecosystem has grown, each core primitive has made the same decision: launch a governing protocol token that derives value from its ability to extract rent from future users.
For Canto’s decentralized exchange, the protocol cannot be upgraded and will remain ungoverned. It will run in perpetuity on Canto without ever being able to launch a token or implement additional fees over time, preventing the possibility of a predatory evolution toward rent-seeking behaviors.
For the Canto Lending Market, governance is controlled by Canto stakers. Canto stakers have broad interests in the growth of the ecosystem and fostering the best environment for both developers and DeFi users. As such, they have no incentive to extract rent at the application layer.
For $NOTE, the unit of account token, the interest charged to stabilize its price will be contributed toward funding public goods. The algorithm responsible for adjusting this interest rate is designed to change the interest rate in order to promote a less volatile value as opposed to maximizing revenue. All interest paid by borrowers will be distributed to lenders, with no interest extracted as revenue.
By giving governance powers to the chain, we expect the operation of the primitives to naturally align with the public interest, resulting in a healthy and robust ecosystem free from zero-sum games that have since come to dominate the once egalitarian system of decentralized finance.
Join Canto with Provalidator. We will continue support on Canto, please stay tuned for more of our announcements. Thank you!
About Provalidator
Provalidator is a professional Proof-of-Stake blockchain validator and decentralized infrastructure provider. We offer enterprise-level validation services to more than 30+ blockchain networks, safeguarding over $250 million (as of December 2022) in digital assets through our robust infrastructure. Our team has been operating validator nodes since 2018 starting with the Cosmos Hub, and is currently one of the most prominent validators in the Cosmos ecosystem.
At the heart of our operations is validator service, which are specialized servers or nodes in a blockchain network tasked with proposing, authenticating transactions, and incorporating new blocks into the blockchain. Our dedicated team is on standby around the clock, ensuring swift responses to any validator node concerns. We’ve implemented multi-layered security and monitoring systems to safeguard our infrastructure and prioritize interests of our delegators.
Our mission is to support blockchain infrastructure.
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