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For years, crypto users have complained about high usage fees for blockchain technologies that seem to benefit those who can afford to pay a higher premium a whole lot more than the average user. They argue that blockchain technology should be free to use and that new users shouldn't have to be stuck in a position of paying excessive rent to people who were lucky enough to hear about the platform during a presale. Luckily for these crypto users, that problem may have been solved.
Canto is a base-level or Layer 1 blockchain software based on the principles of decentralized finance (DeFi). Its self-sustaining system allows users to complete zero-fee crypto and crypto-related transactions with the highest levels of accessibility, privacy and freedom.
CANTO is the official native token of the Canto blockchain. For clarity, CANTO (in all capital letters) is the token and Canto (only the first letter being capitalized) is the underlying Blockchain technology.
CANTO is used to secure the network through staking with validators. At launch, 150 million tokens were issued out of the initial total supply of one billion. The current plan is that the other 850 million tokens will be distributed over time, a process that has already begun in earnest.
NOTE is an immutable ERC-20 token with a value of around $1, which serves as Canto’s unit of account. It is not possible to create NOTE, as it is only available by borrowing from the Canto Lending Market. Users must post collateral in either USDT or USDC tokens and all interest gained by the market has been earmarked for public-use projects.
Despite some sources claiming otherwise, it is important to know that NOTE is not technically considered a stablecoin, as its value is not pegged to the U.S. Dollar. Instead, interest rates are raised or lowered by the Canto DAO in order to bring the price closer to the target of one USD.
Canto was created in August 2022 by a grassroots collective of people who supported the DeFi movement, including Scott Lewis (the co-founder of Slingshot crypto). They felt that it was time to develop a decentralized financial network that could be run cooperatively without charging excessive fees to users, particularly new ones.
Unlike other cryptos like Bitcoin, Canto was not funded by venture capitalist firms. There was no presale and it does not offer vesting. It is funded purely by idealistic backers who received 2% of the original supply of CANTO. It is currently being developed by a team that includes Lewis, the Plex team and NeoBase.
These are just a few of the developers on the project. The main (public) team represents a larger group of developers whose identities are not considered important to the project. They work anonymously in order to further the mission's goals, instead of for personal glory or their own financial interest.
Put simply, the main inspiration behind the project is that users are able to use blockchain technology and trade crypto freely in both senses of the word. To borrow from a Richard Stallman quote, Canto and its related FPI applications are both "free" as in freedom (it has complete access with no restrictions) and "free" in the sense that there are no rent or usage costs to end-users.
Canto aims to become the best execution layer protocol for original work. To achieve this goal, it heavily uses its Free Public Infrastructure (FPI) to meet its three core tenets:
For comparison, the idea is similar to the one undertaken a few years ago by traditional stock market trading platforms like Merill Lynch, TD Ameritrade, and others, where they eliminated the standard 50-cent commission for stock purchases and instead only charged options traders. This led to a massive increase in the number of retail traders.
The project and its developers hope to revolutionize the blockchain in the same way, by reducing user fees and discouraging rent-seeking behavior. This allows normal users freer access to crypto trading and could eventually increase the number of crypto traders worldwide.
Canto works like other Layer 1 blockchain platforms, allowing users to trade crypto, NFTs, and other digital assets through a peer-to-peer connection. It uses the Tendermint Core to verify transactions immediately, unlike other exchanges such as Bitcoin which have a higher-energy proof of work (PoW) algorithm.
Canto is a general-purpose blockchain that requires no permissions and is based on the Ethereum Virtual Machine (EVM). Through its liquidity mining program, it is self-sustaining without the need to charge rent or crypto transaction fees from its users. These liquidity mining incentives provide CANTO stakers with additional tokens that can be further invested for additional gain, as well as the ability to vote on governance measures.
One important distinction between Canto and other Ethereum-based systems is that, due to the lower energy and higher efficiency of the updated EVM system, block times are significantly lower. Ethereum runs an average block time of about 12 seconds, while Canto EVM has an average running time of about six.
One of the main ideas behind the project is that it provides a Free Public Infrastructure for conducting blockchain transactions. Most other exchanges, which are often backed by venture capitalists from the start, tend to benefit those initial contributors and settlers at the expense of new users.
As mentioned, since Canto has no VC firms behind it, it can focus on offering a majority of its services for free, because it has no outside investors that need to be repaid. It was built on the belief that blockchain technology should be accessible to everyone, not just those who were lucky to be there when it started.
The Canto Bridge allows users to bridge assets from Ethereum, Cosmos Hub and Gravity Bridge. It acts in the same way that a real-life bridge would, allowing things to move from one "island" or location to another. It connects those third-party platforms like Cosmos to the Canto EVM and allows for assets to be taken in or out of the project's ecosystem.
Canto’s liquidity providers (LP) can use the Canto LP interface on the official website to exchange liquid assets and receive Canto LP tokens. Currently, there are five liquidity pools: CANTO/NOTE, CANTO/ETH, CANTO/ATOM, NOTE/USDC and NOTE/UDST. In keeping with the spirit of the project, there are no fees for liquidity providers.
In other words, the Canto Liquidity Mining Program allows users to loan out their assets to the network in exchange for additional assets (i.e., they receive their initial stake back, plus interest in the form of additional Canto LP Tokens). These liquidity mining incentives cannot be borrowed from the CLM (see below) but can be reinvested as collateral to receive additional NOTE tokens.
The Canto Lending Market (CLM) allows users to obtain NOTE tokens by putting up collateral in either USDC or UDST. Should the value of NOTE be higher than that of the collateral, users will be able to turn a profit by holding NOTE tokens.
To increase the capital efficiency of the CLM, additional tokens will be added to the collateralization pool in the future, although it is not yet known which assets will be introduced to the system.
The CLM is an adaption of Compound v2 and operates with an automated market maker (AMM) that allows users to complete borrowing or lending transactions using the underlying liquidity pool instead of forcing peer-to-peer transactions, which reduces wait times and makes the system self-sustaining. As long as liquidity mining incentives are given to stakers, the CLM will always be available.
Staking allows investors to "lock up" their tokens for a set amount of time to ensure the security of the network. There is a 21-day minimum hold period, however, meaning stakers won't be able to take back their CANTO tokens until those three weeks have expired.
There are several benefits to staking, including interest paid in the form of additional CANTO tokens. Additionally, all stakers receive voting rights when new governance proposals are issued by the Canto DAO. This allows the system to avoid being overtaken by bad actors who want to exploit the system for their own gain.
Since Canto was built on the ideas of freedom and equality for all, it runs under a new system called Unified Governance. That means that any staker can participate in the governance of not only the network itself but the Canto Lending Market, as well as any new FPI applications.
Note that this does not apply to the exchange itself, the Canto DEX. It can never be upgraded, it cannot produce new tokens and it remains ungoverned. These actions were put in place to discourage rent-seekers from abusing the system, which would be a violation of the project's entire mission.
In the future, there are plans to expand Canto’s operation into further FPI applications, allowing crypto users to bridge crypto from additional sources and networks into the Canto DEX. Backers believe that an increase in free public infrastructure is vital to the crypto and blockchain landscapes.
The Canto Lending Market will also relax and become less conservative over time, as well as add support for additional collateralization assets. The DAO that controls the system will be able to allow the CLM to produce greater capital efficiency once the system is fully in place and certain benchmarks have been reached.
Above all, every action taken by the DAO will ensure that free access to the Canto blockchain system is maintained for all users, the system continues to be self-sustaining by rewarding stakers and discouraging rent-seekers from attempting to take over the project.
CANTO operates on an inflation system, where the amount of CANTO available changes by varying amounts, with stakeholders receiving additional coins after every inflation period. The percentage started at nearly 20% and each successive period will be lower until it eventually trends toward 0%.
The total number of available tokens will eventually reach one billion. At creation, 130 million (13%) coins were issued to the first contributors and 20 million (2%) were issued to the Settlers who helped test Canto’s initial framework. 450 million (45%) of the remaining total supply is allocated to long-term liquidity mining while 350 million (35%) is reserved for medium-term liquidity mining. The last 50 million (5%) CANTO tokens are kept for future public goods grants. At the time of writing (Feb 27, 2023), close to 442 million CANTO coins have been issued.
The experts at DigitalCoinPrice.com predict that CANTO will increase by nearly 225% by the end of the year 2025. They state that every technical analysis they've run on CANTO indicates that the price will continue to rise over the next few years, hitting $1.84 and $5.34 by 2025 and 2030 respectively. PricePrediction is also bullish on CANTO, suggesting that CANTO price will break $1 by 2024. CANTO price is believed to reach $1.70 by 2025 and $9.99 by 2030.
CANTO experienced a slight peak at $0.39 on Aug 26, 2022 after its launch in the same month. Its price then declined steadily to approximately $0.10 before recovering slightly to hit a lower peak of $0.34 on Nov 5, 2022. This was followed by a sharp decline in price when the FTX exchange went bankrupt and devastated every sector of the cryptocurrency market in November. However, LDO price quickly recovered and, in January of 2023, exploded in price with a 700% increase, going from its all-time low of $0.07 on Jan 1, 2023 to its all-time high of $0.76 on Feb 7, 2023. As of Feb 27, 2023, CANTO’s current price is $0.43.
Based on the above information, CANTO is considered an excellent investment opportunity. Like all investments, cryptocurrencies have inherent risks and success is not guaranteed. However, based on the expert predictions listed above, CANTO's price is expected to continue increasing over the next decade.
It should be noted, of course, that this is not financial advice and investors are free to make their own decisions. Despite all of the positive predictions and expectations, Canto is still an experimental application. As with all investments, crypto traders should only invest as much into this project as they can afford to lose.
Crypto users who want a solid Layer 1 blockchain to conduct transactions anonymously and without any transaction fees will definitely want to consider both using Canto and investing in the associated coin. Supporters of the Canto Network believe that FPI technology is the future of crypto trading and the blockchain itself. If they are correct, it could become the most popular blockchain on the market and overtake the competition, due to its emphasis on putting users over profits.