Canto's Journey With Real World Assets - Dr. DODO is Researching

Canto's Recent Update

Canto is a public blockchain primarily driven by the crypto community. It aims to create L1 + DeFi infrastructure that offers a range of free public services. It was launched in a fair manner with no venture capital or fundraising involved, making it a favorite among the native crypto user community.

Recently, the official Canto Twitter account announced changes to the project's latest roadmap. Canto will migrate to the Ethereum ecosystem and collaborate with Polygon Lab. They will utilize the technical services of Polygon CDK to integrate Canto as one of Ethereum's ZK L2 chains. Canto's official statement indicates that this update is in preparation for the next phase of their roadmap, NeoFinance. Canto plans to introduce a significant amount of Real World Assets (RWA) onto the blockchain, allowing crypto-native users to benefit from traditional finance returns. To ensure higher scalability, liquidity, and security, they have decided to leave the Cosmos ecosystem and embrace the Ethereum ecosystem.

NeoFinance

Canto recently announced its collaboration with legally registered entities such as Hashnote and Fortunafi to introduce revenue-generating US dollars onto the blockchain. This includes assets like T-bills (short-term government bonds) and private cash management funds.

Before diving into how NeoFinance introduces revenue-generating RWA assets to users, let's first introduce Canto's native stablecoin, $NOTE. The $NOTE token is minted by users who provide USDC/USDT stablecoins or LP tokens to Canto's lending market (CLM) through over-collateralization, similar to the model of AAVE's $GHO.

NeoFinance's goal is to use the liquidity provided by users to purchase RWA assets and issue tokenized certificates. These certificates are then brought into Canto's lending market (CLM), and interest-bearing stablecoins known as $cNOTE are minted. Users holding $cNOTE can enjoy real-world asset returns, such as the 5% annual yield of short-term US Treasury bills (T-bills).

With the presence of Canto's lending market (CLM), users can even stack their returns through recursive lending, achieving leverage yields close to 35% on top of the 5% annual yield from T-Bills.

Source: https://x.com/TaikiMaeda2/status/1707794667994075525?s=20

Author's Perspective

The Canto team consists mostly of experienced DeFi OGs and many well-known Twitter KOLs, which has kept Canto closely aligned with the crypto-native community. I, as a user, have been involved with Canto from day one and have interacted with one of Canto's top contributors, @scott_lew_is (while he doesn't identify as a Canto founder, the entire crypto community essentially views him as one).

In my view, Canto's strength lies in its close connection to users. The team and contributors are highly responsive to user feedback, and they have a keen understanding of the narratives in the crypto space. The team's agility in responding to market dynamics is quite remarkable.

RWA (Real World Assets) and Ethereum L2 solutions have been two of the hottest topics in the blockchain world this year, even during a bear market. Canto's recent roadmap update positions it squarely in these domains. Although Canto has yet to officially announce NeoFinance, most information has surfaced through community sources and speculations. Nevertheless, the market has responded positively to Canto's upcoming goals, and its token has rebounded nearly 300% after touching its lows. While Canto remains a bit of a dark horse, it has garnered significant attention as one of the few tokens bucking the market trend and showing substantial upside potential.