Core technical structure

Canto aims to be a decentralized, permissionless blockchain that provides free public infrastructure for DeFi (Free Public Infrastructure). To achieve this goal, Canto's architecture adopts Cosmos SDK and Ethermint, combining the advantages of the Cosmos modular framework with Ethereum Virtual Machine (EVM) compatibility. This technical foundation ensures that Canto is both scalable and interoperable, allowing developers to deploy Ethereum-compatible smart contracts in a secure, decentralized environment.

Cosmos SDK

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Cosmos SDK is an open-source framework specifically designed for building scalable application-specific blockchains. Its modular structure allows projects like CANTO to customize blockchain functionality while benefiting from the existing network security and interoperability advantages of the Cosmos ecosystem. Through the Cosmos SDK, CANTO is able to focus on achieving its mission of decentralization and public access, creating a resilient and efficient DeFi ecosystem.

Key Features of Cosmos SDK in CANTO

• Modular designThe Cosmos SDK adopts a modular design, allowing CANTO to flexibly integrate and customize blockchain functions such as governance, staking, and account management, perfectly matching its vision of a 'free public infrastructure'.
• Tendermint CoreThe built-in Tendermint core in the SDK is a Byzantine Fault Tolerant (BFT) consensus engine that ensures fast transaction confirmation and high throughput. It empowers CANTO to fulfill the dual promise of speed and security, efficiently processing transactions while maintaining decentralization.
• Inter-Blockchain Communication (IBC)As a member of the Cosmos ecosystem, CANTO can seamlessly connect with other IBC-enabled blockchains such as Cosmos Hub, enabling users to freely transfer assets and data across chains.

By adopting the Cosmos SDK, CANTO is able to leverage this mature blockchain framework to achieve fast deployment and good scalability, ensuring that the system can continue to grow with user demand.

Ethermint: CANTO's EVM compatibility

Ethermint is an Ethereum-compatible platform built on the Cosmos SDK, enabling Canto to run Ethereum smart contracts. Through Ethermint, Canto achieves Ethereum Virtual Machine (EVM) compatibility, allowing developers to directly deploy smart contracts based on Solidity on Canto. This feature makes Canto highly attractive to developers and users familiar with the Ethereum ecosystem and DeFi applications.

The main advantage of Ethermint in CANTO

• EVM compatibility: With Ethermint, Canto can run Ethereum-compatible smart contracts, allowing Ethereum-based decentralized applications (dApps) to be deployed directly to Canto without significant code modifications. This compatibility makes it easy for Ethereum developers to migrate and drive cross-chain dApp development.
• Scalability and Efficiency: Ethermint makes Canto more efficient in processing transactions than the Ethereum mainnet. Leveraging the performance advantages of the Cosmos SDK, Canto can execute EVM smart contracts at a faster speed and lower cost.
• Expanded developer ecosystemEVM compatibility gives Canto access Ethereum's rich ecosystem of tools, libraries, and development environments. Developers can build and use dApps on Canto using familiar tools such as MetaMask, Truffle, and Remix.

Through Ethermint, CANTO realizes seamless integration between the Ethereum and Cosmos ecosystems, enabling users and developers to access a more diverse range of DeFi applications within a unified framework.

Interoperability and Communication across Chains

One significant advantage of using Cosmos SDK in conjunction with Ethermint is that Canto can achieve interoperability with both Ethereum and Cosmos-based networks. Through the Inter-Blockchain Communication (IBC) protocol, Canto can connect with other blockchains that support IBC, enabling secure cross-chain asset transfers and data sharing. This capability aligns with Canto's mission to provide access to DeFi services, allowing assets to seamlessly flow between Canto and other popular networks such as Cosmos Hub and Ethereum.

Advantages of Cross-Chain

• Asset Liquidity:Users can freely transfer assets between all IBC-supported blockchains, enabling them to access a diverse range of DeFi services across chains.
• Enhanced DeFi Opportunities:By enabling cross-chain asset transfer, CANTO provides users with new DeFi opportunities, including multi-chain liquidity pools, lending, and staking options, making the platform more attractive to a wider range of DeFi users.

Proof of Rights and Validator Security

Canto operates based on the Proof of Stake (PoS) consensus mechanism, which is the core of ensuring its security and decentralization. Unlike Proof of Work (PoW), which requires miners to verify transactions by solving complex computational problems, PoS relies on validators participating in the network by staking CANTO tokens. This staking model is not only more energy-efficient but also allows Canto to achieve high-speed transactions while maintaining security and decentralization.

The responsibilities of validators include verifying transactions, creating new blocks, and maintaining the integrity of the blockchain. In CANTO's PoS model, validators are selected based on the amount of CANTO tokens they have staked. As the economic interests of validators are closely linked to the success of the network, this staking mechanism effectively incentivizes honest behavior.

• Transaction VerificationValidators process and verify transactions to ensure their accuracy and consistency with the blockchain's historical records. This validation process prevents double-spending and other malicious behaviors.
• Block creationValidators are responsible for creating new blocks and adding them to the blockchain. Through a secure and decentralized process, they maintain the integrity of the blockchain and prevent tampering or unauthorized changes.
• Consensus Participation: Validators participate in the consensus process by voting on the validity of transactions and blocks. When a majority of validators reach consensus, a new block is added to the chain. This decentralized consensus model ensures that no single validator will be able to control the network.

Through these responsibilities, validators play a key role in securing the security of the Canto blockchain, maintaining its decentralized nature, and ensuring the transparency and immutability of transactions.

Validators are rewarded with staking rewards paid in CANTO tokens as a return for their work in maintaining the security of the Canto network. These rewards provide an incentive for validators to act in the best interest of the network's operation, as dishonest behavior may result in penalties or loss of staked tokens.

In addition to validators, Canto's PoS model also allows delegators to participate in the staking process. Delegators refer to CANTO token holders who do not directly run validator nodes. They can delegate their CANTO tokens to trusted validators, thereby contributing to the network security and sharing staking rewards.

• Enhance decentralizationThe delegation mechanism enables more token holders to support network security by decentralizing power to more participants to enhance decentralization.
• Community ParticipationDelegating allows community members who may not have the technical ability or resources to run a validator node to still contribute to network security and receive rewards.
• Validator Responsibility SystemAs delegators can choose which validators to support, validators are incentivized to take responsible actions and maintain a good reputation within the community. If delegators believe that a validator is not acting in the best interest of the network, they can revoke their support for that validator.

Interoperability

Interoperability is a core cornerstone of Canto's design, allowing it to seamlessly connect with other blockchain networks and expand the reach of its decentralized ecosystem. By leveraging the Cross-Chain Communication Protocol (IBC), Canto enables secure cross-chain communication, asset transfer, and data sharing with other IBC-enabled chains, such as chains in the Cosmos ecosystem and broader blockchains.

In addition, Canto's EVM compatibility implemented through Ethermint enables seamless interaction with the Ethereum ecosystem, supporting Ethereum smart contracts and decentralized applications (dApps). This dual interoperability makes Canto a bridge connecting Cosmos and Ethereum, allowing users to access a rich array of decentralized finance (DeFi) services and applications.

The main function of IBC in CANTO

• Token TransferIBC enables secure token transfers between CANTO and other IBC-enabled chains. This functionality significantly enhances ecosystem liquidity by facilitating bi-directional flow of multi-chain assets.
• Cross-chain dApp FunctionalityThe cross-chain support of IBC allows decentralized applications to run across networks. For example, dApps on Canto can utilize data and assets from other IBC-compatible chains to provide cross-chain DeFi services.
• Interoperability of the futureAs IBC is adopted by more blockchains, Canto will seize development opportunities by connecting with these blockchains, thus creating a broader DeFi and blockchain application ecosystem.

IBC makes Canto part of a broader blockchain ecosystem, promoting cross-chain collaboration and enabling innovative DeFi use cases across multiple blockchains.

Free public infrastructure

Canto's philosophy in decentralized finance (DeFi) is based on "Free Public Infrastructure" (FPI), ensuring that core DeFi services remain open, accessible, and free of charge or rent-seeking behavior. Unlike traditional financial systems or even many DeFi projects that charge basic service fees, Canto's FPI model eliminates these costs, enabling users to access decentralized exchanges, lending markets, and stable asset systems without barriers. By prioritizing a public utility model, Canto is committed to building a truly democratic and inclusive financial ecosystem.

The free public infrastructure model of CANTO is built on several core principles aimed at reducing reliance on intermediaries and preventing centralised control. These principles include:

• Free to access: Canto's core DeFi services, such as decentralized exchanges (DEX) and lending markets, are completely free. This zero-fee structure ensures that all users, regardless of their economic background, can use DeFi services without being affected by high transaction costs.
• Neutral and non-exclusive infrastructureCanto's public infrastructure does not use governance tokens or exclusive control mechanisms, which may tend to favor large stakeholders. This neutrality ensures that no single entity can control or influence core services, thus maintaining a fair and just ecosystem.
• Decentralized operationBy eliminating centralized regulation, CANTO's free public infrastructure promotes a community-driven approach that allows users to participate in the ecosystem without external interference. This decentralized approach promotes transparency, autonomy, and security across all services.

Canto's FPI mode, with the following advantages, makes it an accessible and inclusive DeFi platform:

• Enhanced AccessibilityBy eliminating transaction fees and other cost barriers, CANTO's FPI model makes DeFi accessible to everyone, regardless of their economic background. This is especially important for small retail investors who may be unable to participate due to high fees.
• Economic inclusivityThe neutral and free nature of Canto's core services promotes financial inclusion and makes decentralized finance accessible to users from all socioeconomic backgrounds.
• Empower the community to participate: As Canto's FPI model does not use governance tokens or central control, it enables community members to freely use the services and participate in the ecosystem. This incentivizes more users to actively participate in the development of Canto.
• Resisting the influence of centralizationCanto's decentralized infrastructure reduces control risks of major stakeholders or external entities. This approach creates a more resilient DeFi environment, always maintaining its mission of accessibility and public services.

With the above advantages, Canto's FPI model presents a sustainable and decentralized DeFi solution that allows users to access core financial services freely without suffering from any additional exploitative fees.