Following Yuval Rooz's sharing, we delve into the core vision of the institutional darling Canton Network to reshape the global financial system, as well as the technological hard power and market soft power behind achieving this vision.

Written by: Deep Tide TechFlow

From ETFs, RWAs to stablecoins and tokenized stocks, we have truly experienced a round of institutional bull market.

Behind the narrative of the crypto market led by institutions, there exists an important role specifically serving institutions to go on-chain and catalyzing the comprehensive explosion of on-chain finance.

This is Canton Network, which not only received investment support from YZi Labs but also garnered the favor of prestigious institutions such as Goldman Sachs, BNP Paribas, HSBC, and Microsoft, choosing it as their on-chain business partner.

What is the fatal attraction of Canton for institutions in providing the necessary infrastructure for going on-chain?

At the Korea Blockchain Week, we engaged in an in-depth dialogue with Yuval Rooz, the driving force behind Canton Network and co-founder and CEO of Digital Asset.

There are many projects focusing on RWA business for institutions, and when discussing the core differences with them, Yuval stated:

Canton's vision is to enable assets to be natively on-chain rather than wrapped. Holding the relevant tokens is equivalent to holding that security in the traditional market. The way we build the chain can help achieve this, which is difficult for others to do.

When discussing the future prospects of institutions going on-chain under the trend of regulatory friendliness, Yuval further emphasized Canton’s advantages:

Regulatory friendliness creates an atmosphere where all parties are willing to participate actively. However, for institutions, just because "digital asset business is now possible" does not mean they will no longer prioritize privacy or the custody and protection of user assets. This is also why I believe Canton has an advantage: When the positive attitude of regulators, the growing interest of clients, and a chain that meets institutional regulatory and privacy requirements combine, it will bring a very strong driving force for the future development of on-chain finance.

In this issue, let us follow Yuval Rooz's sharing to explore the core vision of the institutional darling Canton Network to reshape the global financial system, as well as the technological hard power and market soft power behind achieving this vision.

Bringing Institutions On-Chain and Achieving True Financial Fluidity

Deep Tide TechFlow: We are glad to have the opportunity for an in-depth exchange with you. Some Chinese-speaking users may not be familiar with your background, so first, could you please introduce yourself and share some of your past experiences and current responsibilities?

Yuval:

Hello everyone, I am Yuval Rooz, co-founder and CEO of Digital Asset, and our team is the driving force behind Canton Network.

I have a background in electrical engineering, and my crypto career began at Citadel, one of the largest hedge funds in the world, where I was a quantitative researcher. After that, I joined DRW Trading to engage in high-frequency trading. Later, I was involved in creating one of the largest crypto OTC market makers, Cumberland Mining. Now, I lead Digital Asset and am fully committed to advancing Canton’s development.

Our team combines a wide range of experience from traditional finance and technology sectors: One of my co-founders created Cumberland Mining and has been engaged in market-making since 2012; another co-founder played a key role in the development of zero-knowledge proofs; our CTO holds a PhD in distributed systems.

Overall, our team background is very diverse, and in the direction of institutions and crypto moving towards each other, I believe our background, especially the accumulation in traditional finance, gives us a unique advantage in connecting institutions with the crypto space, making Canton an ideal infrastructure platform for bringing traditional assets on-chain.

Deep Tide TechFlow: If you had to describe what Canton is doing in one or two sentences, how would you say it?

Yuval:

In simple terms, Canton is dedicated to reshaping the global financial system.

We aim to bring institutions onto the blockchain and achieve true financial fluidity on-chain. Our clients are the main participants in today’s global financial markets.

Deep Tide TechFlow: As we understand, Canton’s initial concept should have started in 2023 when RWA was relatively popular, and now RWA is once again in the spotlight. Do you think there are any differences between the discussions on RWA this time and last time? Could you please share some important milestones of Canton over the past few years?

Yuval:

Although Canton officially launched in 2023, our white paper can be traced back to 2015. We have always been committed to building projects with long-term sustainable value and impact, rather than chasing short-term trends.

Some of our important milestones over the years include: collaborating with Chainlink, integrating multiple wallets and stablecoins into the Canton network, and integrating several DEXs.

Without having officially launched on exchanges yet, Canton has already become one of the top 5 public chains in terms of on-chain activity. Our goal is to bring real-world assets on-chain to support the development of a strong and decentralized application ecosystem.

Letting Assets Be Natively On-Chain Rather Than Wrapped Assets

Deep Tide TechFlow: From your introduction, we understand that Canton emphasizes helping traditional mature institutions go on-chain. Could you share the core differences between Canton and other RWA projects like Ondo?

Yuval:

Canton's vision is to enable assets to be natively on-chain rather than wrapped assets. While wrapped assets are an advancement, they are not as appealing to me.

Canton is committed to bringing assets natively on-chain, including U.S. Treasuries, U.S. stocks, Chinese stocks, Japanese stocks, etc. Holding the relevant tokens is equivalent to holding that security in the traditional market. I believe the way we build the chain can effectively help achieve this, which is difficult for others to do.

At the same time, we know that many large institutions care a lot about "privacy" rather than "anonymity." We believe that many chains today are more like "anonymous chains" rather than "privacy chains." Canton can ensure compliance while guaranteeing privacy and security, which is crucial for institutions that value privacy and regulatory compliance.

Deep Tide TechFlow: You just mentioned the core differences between native assets and wrapped assets. Could you share the specific advantages of native assets?

Yuval:

Let’s take an example: Imagine you hold a security, and the issuer pays dividends; you have a direct legal claim to that dividend. By law, you can assert your rights directly.

But if it’s just a wrapped asset, you can only hope that the issuer of the wrapped asset will transfer the dividend to you because you do not actually hold the security, so you have no legal claim against the original issuer.

In simple terms, wrapped assets create a disconnect between the buyer and the asset issuer, and we believe this disconnect is unnecessary. We advocate that investors should maintain a direct relationship with the asset issuer, which is the fundamental difference between wrapped assets and native assets.

The Technological Hard Power Behind Top Institutional Collaborations

Deep Tide TechFlow: We know that Canton has many top partners, such as Goldman Sachs, Microsoft, Nasdaq, and traditional financial exchanges. Could you share one or two representative examples of what Canton has specifically done in these collaborations and what the current effects are?

Yuval:

Canton has many examples in this regard.

First is the repurchase market, where banks and traditional financial institutions finance each other through repos, lending funds and securities. This is one of the largest markets globally. From a data perspective: In the U.S., the daily transaction volume in the repo market is about $5 trillion, and globally about $10 trillion. However, in the crypto industry, the repo market is still very small.

We have moved the repo business on-chain through collaboration with Broadridge. Now, we have achieved about $300 billion in on-chain transactions daily, significantly improving the efficiency and quality of lending and settlement in the traditional financial sector.

Another example is the on-chain U.S. Treasuries. About a month and a half ago, we established a partnership with the Depository Trust & Clearing Corporation (DTCC) and announced that U.S. Treasuries can now be natively issued and circulated on Canton. This means you can trade U.S. Treasuries 24/7, which is an important milestone in the digitization of financial assets, and more important asset classes will be launched on Canton in the future.

Deep Tide TechFlow: The achievement of collaborations also relies on technological strength. We have previously written about some aspects of Canton’s consensus mechanism. In your view, what are the leading aspects of Canton on a technical level, and how will these advantages help Canton grow?

Yuval:

All leading public chains have excellent technical teams, and everyone’s achievements are impressive. What makes Canton unique is that our technical team may not necessarily be smarter or stronger, but we have the ability to combine a very strong technical team with a very strong market team to unleash greater energy.

For example, you can be very smart and create the most powerful engine in the world, but if you make the wheels square, the car won’t move. This example illustrates that even if the technical team can create a powerful "engine," we still need to know how to build the "whole car" well so that it can really run fast.

Canton's ability to integrate technology and market aspects allows us to not only build a strong blockchain but also create a system that meets the actual needs of institutional clients, capable of truly understanding, meeting, and adapting to the operational needs of institutions.

Additionally, we have adopted a high-performance BFT consensus mechanism design. What makes Canton unique is that we split the consensus into two layers: The first layer is executed by participants we call "super validators"; the second layer is where edge nodes reach consensus on the state and data of smart contracts. Through this design, we can achieve compliant privacy protection without relying on technologies like zero-knowledge proofs, which is one of our core innovations.

Canton Can Adapt to Different National Regulations and Is Excited About the Potential in the Asian Market

Deep Tide TechFlow: Currently, Canton’s partners are spread across the U.S., Europe, and Asia, especially as we meet in Korea now. From the perspective of financial institutions going on-chain, what differences do you see in different regions or countries, and what differentiated growth strategies do you have for this?

Yuval:

Here, we must share the inspiration behind the naming of Canton:

The project name "Canton" is inspired by Switzerland's "canton" system. We know that Switzerland is a federation composed of multiple cantons. Each canton has different rules: varying tax systems, languages, and laws, and even different spellings of "canton" in their respective languages, but they all operate under the unified legal framework of Switzerland.

Canton's philosophy is similar: different countries are not the same, and laws and rules are not entirely consistent, but we hope to ensure personalization while allowing different people, companies, and countries to converge and collaborate on Canton, which is crucial.

Taking Asia as an example: In South Korea, we focus on monetary laws; in Japan, there is a strong emphasis on transparency and regulatory compliance. The flexibility of Canton allows it to adapt to different national regulations, making us an attractive choice for global institutions. This is why we have made progress across major continents, as we can collaborate within local regulatory and legal frameworks. In the future, our goal is to ensure compatibility and adaptation to these rules across different jurisdictions.

Deep Tide TechFlow: When communicating with some project parties, many have told me that Japan currently has the most transparent regulatory framework when assessing the Asian market. Due to regulatory reasons, some RWA projects choose to operate only in Japan rather than in South Korea or China. Do you agree with this view? Or what is your perspective?

Yuval:

Japan has always had a relatively open attitude towards digital assets. As for our construction of Canton, I can clearly say that we have never expected to wait for regulatory changes to make Canton operational.

I believe a key reason for the current acceleration of enterprises going on-chain is the positive attitude of regulators towards the relevant technologies. However, we have successfully communicated with regulatory agencies and enterprises and demonstrated through practical results that even without new regulations, Canton can meet the existing compliance requirements of various countries.

Deep Tide TechFlow: How many times have you been to South Korea? How do you feel about this visit? Any interesting discoveries? Are you excited about the market potential in places like South Korea or Japan?

Yuval:

This is my fourth time in South Korea, and my biggest takeaway from this visit is that I need more sleep, haha.

This year's Korea Blockchain Week is more lively than ever. I heard this morning that Canton has reached a new historical high, which is good news, but I don't pay much attention to these numbers; I usually focus more on meetings and in-depth communication with those who want to build or participate.

Additionally, we can see that compared to previous years, there are more advertisements for this year's events, especially outdoor ads, and traditional audiences are showing greater interest in crypto.

I am excited about the potential of the South Korean or Japanese markets, which is one of the reasons we are participating in Korea Blockchain Week. We are very much looking forward to the launch of Canton Coin in South Korea and Japan.

Regulatory Friendliness Brings More Active Participation from Institutions and Users

Deep Tide TechFlow: The general consensus this year is that regulations regarding crypto have become more friendly, but do you feel the same way specifically in Canton’s sector? What obstacles do you think still need to be addressed?

Yuval:

What truly excites me is not just that regulations allow digital asset businesses to "operate," but that it creates an atmosphere where all parties are willing to participate actively, which is something to look forward to globally.

That said, for large institutions, just because "digital asset business is now possible" does not mean they will stop prioritizing privacy or the custody and protection of user assets. This is also why I believe Canton has an advantage:

When the positive attitude of regulators, the growing interest of clients, and a chain that meets institutional requirements combine, it will bring a very strong driving force for the future development of on-chain finance.

Deep Tide TechFlow: Many retail investors sometimes find it unclear how to participate in the construction of Canton. Could you share more effective ways to participate and any recent activities or developments worth looking forward to?

Yuval:

We will launch a funding program for developers and contributors through the Canton Foundation website, which will be online soon, and everyone can learn more through the Canton and Canton Foundation official websites.

At the same time, we also plan to promote the listing of our tokens on mainstream exchanges, allowing retail investors to participate and share in the network's development achievements.

Additionally, many applications will be deployed to Canton in succession. It is worth mentioning that Canton's token economics will reward actively participating users, and users will receive token incentives for experiencing applications on Canton.

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