1. What is Canto? The Free Public Infrastructure Layer 1
Canto is not just another Layer 1 blockchain; it is a statement about the future of decentralized finance. The core idea behind Canto is that the most essential financial tools—the infrastructure of DeFi—should be treated as a public good, much like roads or libraries. This is the essence of its Free Public Infrastructure (FPI) model. The FPI model dictates that the three core DeFi primitives on Canto—the Canto Decentralized Exchange (DEX), the Canto Lending Market (CLM), and the $NOTE stablecoin—will never have a native governance token. This is a radical departure from the standard DeFi model where protocols issue tokens to incentivize liquidity and allow token holders to extract value through fees and governance. By removing this incentive, Canto aims to prevent the creation of monopolies and ensure that the cost of using these fundamental services remains low and accessible to everyone. This anti-rent-seeking philosophy is crucial for fostering a truly decentralized and equitable financial system. When the core infrastructure is free from the pressure of maximizing token holder value, it can focus purely on providing a reliable, low-cost service. This creates a fertile ground for secondary applications to be built on top, knowing that the foundation is stable and community-oriented. Canto’s launch in 2022 was a significant moment, introducing this new economic model to the Layer 1 space and challenging the status quo of tokenomics.
2. How Canto Works: Cosmos SDK Meets EVM Compatibility
Canto’s technical architecture is a sophisticated fusion of two major blockchain ecosystems: the Cosmos network and the Ethereum Virtual Machine (EVM). This hybrid approach is what gives Canto its power, combining the best features of both worlds to create a highly efficient and developer-friendly Layer 1. At its base, Canto is built using the Cosmos SDK, a modular framework that allows developers to create application-specific blockchains. This framework provides Canto with its core consensus mechanism, Tendermint, which is a Byzantine Fault Tolerant (BFT) consensus algorithm known for its speed and instant finality. The Cosmos SDK also natively supports the Inter-Blockchain Communication (IBC) protocol, which is the standard for interoperability within the Cosmos ecosystem. IBC allows Canto to seamlessly and securely transfer assets and data with other IBC-enabled chains, significantly expanding its reach and utility beyond its own network. The key to Canto’s broad appeal, however, is its EVM compatibility. This is achieved through the Ethermint module, which integrates the EVM directly into the Cosmos SDK chain. For developers, this is a game-changer. It means they can deploy existing Ethereum smart contracts on Canto without needing to rewrite their code. They can also use familiar Ethereum tooling, such as MetaMask for wallets, and development environments like Hardhat and Truffle. The combination of Cosmos SDK and EVM compatibility is a powerful one. The Cosmos SDK handles the high-speed, scalable base layer, while the EVM layer provides the execution environment for smart contracts. This separation of concerns ensures that Canto can maintain high performance even as its DeFi ecosystem grows.
3. The Canto Ecosystem: DEX, CLM, and the $NOTE Stablecoin
The Canto ecosystem is intentionally streamlined, focusing on three core primitives that embody the Free Public Infrastructure (FPI) philosophy. These tools are essential for any functioning DeFi economy, and Canto has designed them to be non-extractive public goods. The first primitive is the Canto Decentralized Exchange (DEX). Unlike typical DEXs that charge fees to enrich token holders, the Canto DEX operates without a native governance token. All trading fees generated on the DEX are directed back to the network's security, specifically to the validators and stakers, rather than being captured by a privileged few. This design ensures that the DEX remains a low-cost, public utility for token swaps, encouraging liquidity and fair trading for all users. The second core component is the Canto Lending Market (CLM). This is a fork of the Compound protocol, providing the necessary infrastructure for users to lend and borrow assets. Similar to the DEX, the CLM is non-governed and non-monetizable. It serves as the backbone for the ecosystem's liquidity and is the mechanism through which the third primitive, the $NOTE stablecoin, is managed. $NOTE is Canto’s native unit of account and its soft-pegged, over-collateralized stablecoin. It is minted exclusively through the CLM by depositing collateral. $NOTE is designed to be a non-speculative asset, intended for use in transactions and as a stable medium of exchange within the Canto ecosystem. These three primitives—the DEX, the CLM, and $NOTE—form a cohesive, non-extractive financial infrastructure. By providing these essential services as public goods, Canto lowers the cost of entry for new users and allows third-party developers to focus on building innovative, value-added services without having to compete with the base layer for liquidity or fees.
4. Comparison: Canto vs. Kava, Evmos, and Osmosis
Canto operates within the highly competitive Cosmos ecosystem, often drawing **comparisons** to other EVM-compatible and DeFi-focused chains. While all these projects leverage the power of the Cosmos SDK, Canto’s commitment to Free Public Infrastructure (FPI) provides a stark contrast to its peers. The most significant difference is Canto's FPI model. While Kava and Evmos are also EVM-compatible chains built on the Cosmos SDK, their economic models are more traditional, featuring native tokens that govern and monetize their respective ecosystems. The table below provides a direct **comparison** of key metrics and features.
| Feature | Canto | Kava | Evmos | Osmosis |
|---|---|---|---|---|
| Primary Focus | Free Public Infrastructure (FPI) & DeFi | Co-Chain (EVM + Cosmos) DeFi | EVM Hub of Cosmos | Interchain DEX & Liquidity |
| Underlying Tech | Cosmos SDK, EVM-compatible | Cosmos SDK, EVM-compatible | Cosmos SDK, EVM-compatible | Cosmos SDK, IBC-enabled |
| Total Value Locked (TVL) | $3.67 Million | $58.33 Million | $191,516 | $33.67 Million |
| Key Differentiator | Core DeFi primitives have no governance tokens (FPI) | Seamless integration of Ethereum and Cosmos ecosystems | Dedicated EVM environment for Cosmos | Leading Interchain Liquidity Provider |
| Launch Year | 2022 | 2020 | 2022 | 2021 |
The **comparison** reveals that Canto’s competitive edge is not in raw TVL or market size, but in its unique economic design. For users and developers who are disillusioned with the high fees and governance politics of other chains, Canto offers a genuinely different, public-utility-driven alternative. The **comparison keywords** here are **"non-extractive"** versus **"token-incentivized"**, and **"public utility"** versus **"governance-driven"**. While Kava and Osmosis boast higher TVLs, their models are fundamentally different from Canto's FPI commitment.
5. Growth and Outlook in 2024 and 2025: The RWA Pivot
The trajectory of Canto is shifting significantly as the network matures. While its initial focus was on establishing the Free Public Infrastructure (FPI) for core DeFi primitives, the growth strategy for **2024 and 2025** is centered on a major pivot toward **Real World Assets (RWA)**. This strategic move aims to leverage Canto’s low-cost, non-extractive environment to onboard traditional financial assets onto the blockchain. The RWA sector is widely anticipated to be a major growth driver in the coming years, and Canto is positioning itself to be a key player. The network’s FPI model is particularly well-suited for RWA tokenization because it minimizes the operational costs associated with on-chain asset management. By providing a stable, low-fee environment, Canto makes it economically viable for institutions and businesses to tokenize assets like real estate, bonds, and commodities. A critical component supporting this future growth is Canto’s unique developer incentive model: **Contract Secured Revenue (CSR)**. The CSR mechanism works by redirecting a portion of the network’s transaction fees to the smart contract developers whose code is being used. This ensures that developers are incentivized to build applications that are genuinely useful and drive adoption, rather than simply maximizing short-term fees. This long-term alignment of incentives is a powerful engine for sustainable growth throughout **2025**. The outlook for Canto in the next two years is one of strategic expansion, moving from a purely decentralized DeFi experiment to a robust, public-utility platform for the tokenization of global assets.
6. Why Choose Canto? A Public Utility Approach to Decentralized Finance
The decision to build on or use Canto comes down to a fundamental belief in its core philosophy. Choosing Canto is a vote for a decentralized future where essential financial services are treated as a public good, not a private profit center. The primary reason to choose Canto is the **non-extractive nature of its core infrastructure**. By eliminating governance tokens for the DEX and CLM, Canto removes the inherent conflict of interest that plagues many other Layer 1s. Users are not subjected to high fees designed to enrich token holders, and developers can build with the confidence that the foundational layers will remain low-cost and stable. Secondly, Canto offers a rare combination of **EVM familiarity and Cosmos performance**. Developers who are comfortable with Solidity and the Ethereum toolset can seamlessly deploy their applications, while benefiting from the high throughput, fast finality, and low transaction costs provided by the Cosmos SDK and Tendermint consensus. This technical advantage ensures that applications on Canto are both easy to build and highly efficient to run. Finally, the **Contract Secured Revenue (CSR)** model provides a superior incentive structure for innovation. This system is a core part of Canto’s long-term sustainability, ensuring that the ecosystem remains vibrant and innovative while maintaining the integrity of the Free Public Infrastructure. In a world where many blockchains are struggling with high gas fees and centralized governance, Canto offers a refreshing and principled alternative. It is a platform built for the community, by the community, with a clear mission to make decentralized finance truly accessible and equitable.
7. Technical Deep Dive: Contract Secured Revenue (CSR) Explained
The Contract Secured Revenue (CSR) model is one of Canto’s most innovative technical features, designed to solve the perennial problem of developer incentives on public utility blockchains. It is a mechanism that directly addresses the question: if the core infrastructure is free, how do we ensure that new, valuable applications continue to be built? The CSR mechanism works by redirecting a portion of the network’s transaction fees to the smart contract developers whose code is being used. Specifically, when a user interacts with a smart contract, a percentage of the gas fees paid for that transaction is automatically allocated to the contract’s deployer. This is a crucial distinction from traditional models where all transaction fees are typically burned or go entirely to validators. The key technical benefit of CSR is that it creates a direct, transparent, and on-chain revenue stream for developers without requiring them to launch a separate, speculative governance token for their application. This allows developers to focus purely on the technical quality and utility of their code, rather than on tokenomics and market speculation. It is a powerful form of passive income that scales with the adoption of the contract. For the network, CSR is a self-regulating mechanism that promotes the creation of public goods. By rewarding the most-used contracts, Canto ensures that the applications that provide the most value to the community are the ones that receive the most funding. This system is a core part of Canto’s long-term sustainability, ensuring that the ecosystem remains vibrant and innovative while maintaining the integrity of the Free Public Infrastructure.
8. Frequently Asked Questions (FAQ)
A: Canto's FPI is a core tenet where essential DeFi primitives—specifically the Canto Decentralized Exchange (DEX), Canto Lending Market (CLM), and the stablecoin $NOTE—are provided as public utility goods. This means they are not governed by a token, cannot be monetized by the core team, and are designed to prevent rent-seeking behavior, ensuring low-cost access to fundamental DeFi services for all users.
A: Canto utilizes the Cosmos SDK for its underlying blockchain framework, which provides high throughput and scalability. It achieves EVM compatibility by incorporating the Ethermint module, allowing developers to deploy existing Ethereum smart contracts and use familiar tools like MetaMask and Hardhat, bridging the gap between the Ethereum and Cosmos ecosystems.
A: $NOTE is the unit of account for the Canto ecosystem, designed to be a soft-pegged, over-collateralized stablecoin. It is managed by the Canto Lending Market (CLM) and is intended to be a non-speculative asset used for transactions and collateral, further supporting the FPI mandate by providing a stable medium of exchange.
A: CSR is Canto's unique mechanism to reward developers. Instead of receiving a portion of transaction fees, developers who deploy contracts that generate high usage are rewarded with a share of the network's revenue, aligning incentives for building valuable, long-term applications on the chain.
A: While all three leverage the Cosmos SDK and offer EVM compatibility, Canto's primary distinction is its commitment to FPI, where core DeFi tools are non-governed and non-monetized. Kava focuses on a co-chain architecture, and Evmos focuses on being the primary EVM hub for the entire Cosmos ecosystem. Canto is uniquely positioned by its anti-rent-seeking philosophy.
A: Canto is secured by its own set of independent validators using the Tendermint consensus mechanism, which is part of the Cosmos SDK. This provides Canto with its own sovereignty and security layer, ensuring high finality and network stability.
A: The Canto network is primarily focused on DeFi, with its native DEX and Lending Market being central. However, the EVM compatibility also supports a growing number of NFTs, specialized lending protocols, and Real World Asset (RWA) tokenization projects, leveraging the chain's low-cost and public utility infrastructure.
A: The Cosmos SDK provides Canto with a modular, high-performance framework. This allows Canto to customize its blockchain for DeFi needs, offering high transaction throughput, fast finality, and seamless interoperability with other Cosmos chains via the Inter-Blockchain Communication (IBC) protocol.
A: New users can start by bridging assets to the Canto network, typically using the official Canto bridge or a third-party bridge. Once assets are on Canto, they can interact with the native Canto DEX for swaps or the Canto Lending Market (CLM) to lend, borrow, or mint the $NOTE stablecoin.
A: Future plans for Canto are centered around expanding its utility beyond its initial DeFi focus, particularly into the Real World Asset (RWA) space. This includes integrating more institutional-grade infrastructure and further optimizing the EVM layer for complex financial applications, solidifying its position as a public utility blockchain.
9. How to Start Your Journey on Canto
Getting started with Canto’s DeFi ecosystem is a straightforward process, thanks to its EVM compatibility. Follow these steps to begin interacting with the Free Public Infrastructure:
- Set up an EVM Wallet: Use a standard Ethereum-compatible wallet like MetaMask.
- Add the Canto Network: Configure your wallet to connect to the Canto mainnet. The network details are publicly available on the official Canto documentation.
- Acquire $CANTO for Gas: You will need the native $CANTO token to pay for transaction fees (gas). These can be acquired on various centralized exchanges or through a cross-chain bridge.
- Bridge Assets: Use the official Canto bridge or a trusted third-party bridge to transfer assets (like ETH, USDC, or ATOM) from other chains onto the Canto network.
- Engage with FPI: Once your assets are on Canto, you can immediately use the Canto DEX for swaps or the Canto Lending Market (CLM) to lend, borrow, or mint the $NOTE stablecoin. The low-cost nature of the FPI makes experimentation and regular use highly economical.
10. Related Projects in the Cosmos and DeFi Space
Canto is part of a larger, interconnected ecosystem. For users interested in exploring related projects that share technical foundations or competitive landscapes, the following links provide valuable context:
References
[1] Data sourced from DefiLlama on December 4, 2025.