Can Canto contribute to building a free and robust infrastructure for the DeFi world?On September 19th, Cosmos-based L1 public chain Canto announced its collaboration with Polygon. The core focus of this partnership is to migrate Canto to an Ethereum Layer2 solution that supports ZK technology, using the Polygon CDK. The aim of this migration is to create a dedicated blockchain network for real-world assets, and seamlessly access Ethereum liquidity through the integration with the Polygon ecosystem and the use of shared ZK bridges.Canto's official statement on this collaboration states, "After evaluating various possible paths, we quickly realized that the Polygon CDK provides a powerful toolkit for Canto to introduce a ZK L2 that upholds the core principles of sovereignty, security, and liquidity as public interests, without the need for permission." Canto further expounds that the Polygon CDK is an open-source codebase specifically designed for creating ZK-enabled Ethereum Layer2 solutions.Moving forward, we will delve deeper into Canto's core principles, the reasons behind their decision to migrate to Polygon, as well as the product and community motivations behind this strategic move.

Canto emerges with the noble endeavor of addressing the financial pain points of humanity, aiming to foster inclusivity in the realm of decentralized finance (DeFi).

Canto is dedicated to unlocking the true potential of DeFi, striving to create a financial system that is more open, transparent, decentralized, and completely free. It is not just a concept, but a guiding principle of action. The birth of Canto was not driven by a centralized organization or company, but rather by a group of creators passionate about building native-chain infrastructure. They believe that through free public infrastructure, a new public domain can be created for society, where everyone can freely communicate and collaborate.On the official website of Canto, they extensively describe their vision and goals. They recognize that the modern financial system has many issues, such as centralization, lack of transparency, and high costs. Canto, on the other hand, aims to address these problems by offering a fully decentralized, transparent, and free platform. Their goal is to establish a financial system that truly belongs to the users, allowing everyone to enjoy the benefits of finance.Furthermore, Canto emphasizes the importance of community. They believe that only through the power of the community can this vision be truly realized. Therefore, they encourage everyone to join them, working together to build a more fair, transparent, and open financial world.

Transferring the technical agreement to Polygon, we lay the foundation for forging a whole new financial realm.

The emergence of new finance is shaping a whole new era in the financial industry, unleashing vast financial efficiencies through the deployment of off-chain assets on a protocol track. This represents not just a technological advancement, but also a sign of financial revolution. The modular design of Polygon CDK provides robust support for this vision, allowing off-chain assets to fully leverage the efficiency, accessibility, and composability advantages of blockchain.However, to realize this vision, we need deep liquidity without sacrificing any security. Here, the inherent trustlessness and decentralization of Ethereum's ZK-powered L2 become crucial. They provide a solid foundation for the new finances, ensuring both transaction security and efficiency. Polygon CDK, in turn, offers the perfect solution by connecting a unified liquidity ecosystem, ensuring smooth and secure transactions.Canto's decision to migrate to Polygon is based on these considerations. They recognize the tremendous potential that Polygon CDK offers to the new finance and have decided to leverage this tool to bring more opportunities and value to their community. This is not just a technical migration, but also a strategic choice aimed at providing better services and experiences for Canto's users and developers.

The core developers will be able to construct a ZK L2, sustaining the community's core idea of sovereignty and liquidity as a common good. By leveraging a shared ZK bridge, Canto will eventually have easy access to the unified Polygon ecosystem and seamless access to Ethereum. The security of the users is ensured by the most reputable ZK provers, meaning that the community's security is protected by cryptography and inherited from Ethereum, rather than relying on socio-economic incentives of fraudulent proofs.Canto will adopt the Plonky2 ZK proof implementation while maintaining a decentralized ordering of proof-of-stake validators. There will be no changes for Canto's validators or token holders, while users will enjoy increased decentralization and trustless assurances when bridging assets. Canto's developers will shift towards utilizing the shared ZK bridge for standard assets.

In the course of advancing the Ethereum ecosystem, there may be a potential to mobilize additional technological and financial support in the future.

Since the launch of the Canto protocol, the total value of its cross-chain assets on Ethereum has reached an impressive 590 million USD. This figure not only demonstrates the strong appeal of Canto within a short period of time but also underscores the significance of Canto to the Ethereum ecosystem. The anticipated Ethereum L2 migration via Polygon will further strengthen the connection between Canto and the Ethereum ecosystem, offering users and developers an abundance of opportunities and choices.

The challenge faced by Canto lies in its limited L1 ecosystem, especially during bearish market periods. Canto often needs to rely on the strength of a broader ecosystem and community to drive innovation and development. Referring to the early DeFi projects like Uniswap, Yearn, and Curve during the previous DeFi Summer, Canto's current ecosystem is primarily composed of forks of established DeFi projects. Depending solely on its own resources can easily result in isolation, whereas joining the Ethereum ecosystem holds the potential to break this pattern.With the decision to integrate deeply with Ethereum, the situation is expected to undergo a complete transformation. Through this integration, Canto will be able to collaborate with more projects and developers, collectively propelling the development of the entire blockchain industry. This is not merely a technical migration, but also a strategic choice aimed at bringing greater value and opportunities to Canto's community.

Canto's offerings, centered around their commitment to freedom and autonomy, greatly benefit developers.

The core philosophy of Canto revolves around autonomy and freedom. Unlike many blockchain projects that rely on third-party developers, Canto insists on autonomously building a free public infrastructure (FPI) on its own blockchain. This independence not only ensures the stability and security of its products, but also provides users with greater freedom and flexibility.Here are the key products and services of Canto:1. Decentralized Exchange (DEX): Similar to platforms like Uniswap, Canto's DEX offers users a secure and efficient trading environment, allowing them to freely trade various cryptocurrencies.2. Canto Loan Market: Similar to AAVE, Canto's loan market provides users with a platform to borrow or lend cryptocurrencies while enjoying competitive interest rates.3. Decentralized currency $NOTE: $NOTE is the official currency of Canto, similar to stablecoins like DAI. It provides users with a stable value store and is also a key component of the Canto ecosystem.Canto often uses a vivid metaphor to describe the characteristics of its FPI: While many existing blockchain protocols serve their communities like "pay-per-hour private parking lots," Canto's FPI is more like "free parking on city streets" for community members. This metaphor aptly reflects Canto's commitment to openness and sharing, as well as its determination to create a truly decentralized, fair, and open blockchain ecosystem.Canto's decentralized exchange is designed to be non-upgradable and non-regulatory. This means it will run permanently on Canto without issuing new tokens or imposing additional fees, ensuring that it does not engage in exploitative or rent-seeking behavior.In the Canto loan market, governance is in the hands of Canto's stakeholders. These stakeholders are passionate about the growth of the ecosystem and creating the best environment for developers and DeFi users. Therefore, they have no intention of charging additional fees at the application layer.As for $NOTE, it is a stable unit of currency, and the interest earned on it supports public goods. The algorithm for adjusting interest rates is not intended to maximize profits, but rather to maintain stable value. All interest charged to borrowers is distributed directly to lenders without any intermediaries.By transferring governance to blockchain, we aim for these primitives to align with public interest, building a healthy and robust ecosystem and avoiding zero-sum game effects that once dominated the egalitarian system of decentralized finance.

An analysis of the economic model: How shall one billion tokens be distributed?

On August 14, 2022, Canto made the announcement of minting one billion Canto tokens. The distribution of these tokens is as follows:Contributors: 13.0%; Cantorian settlers: 2%; Future grants: 5%; Mid-term liquidity mining: 35% (already concluded, lasting for 6 months); Long-term liquidity mining: 45%.To incentivize liquidity providers (LPs) to inject funds into Canto's feeless DEX, Canto has designed a liquidity mining program. This program linearly releases tokens to LP token holders in blocks. To ensure sufficient liquidity at launch, Canto divided the genesis block into two parts-the mid-term incentives and the long-term incentives. The first portion of tokens will be released within the first six months after Canto's launch, while the second portion will be released over multiple years.The mid-term liquidity mining program lasted for six months, with the first epoch starting at launch, allocating 5.83% of the token supply. The Canto DAO holds on-chain control over all liquidity mining programs. The long-term liquidity mining is expected to continue after the mid-term liquidity mining concludes, potentially releasing tokens over a period of 10 years or within a time frame chosen by the DAO.Canto's staking incentive strategy is implemented to ensure the security of the network by linearly issuing a fixed amount of tokens to stakers per block. This high inflation strategy allows market participants to effectively provide excess returns for liquidity mining. As Canto's financial foundation gradually stabilizes, this premium is expected to quickly converge.The emission for security purposes started within the first 30 days, with an annual inflation rate of 200 million Canto, resulting in approximately 16 million new Canto tokens being minted. The reward per mining block is approximately 37 CANTO. Each subsequent period will experience exponential decay.

Dedicated to environmental conservation, I have repeatedly advocated for the reduction of emissions.

Canto is dedicated to reducing emissions and has proposed 7 relevant initiatives thus far. The incentivization for mining has also significantly decreased, from an initial emission rate of 37.74 CANTO per block to just 3.47 CANTO per block, resulting in an impressive 90% reduction in emissions.The proposal on September 9th of this year marks an important recent adjustment, outlining the following key points:1. A 10% reduction in liquidity mining incentives;2. Provision of funding for future periods of liquidity mining;3. Accurate 10% reduction in secure emissions;4. CANTO/NOTE Ratio: 8.491 CANTO per block (reduced by 10%);5. ETH/CANTO Ratio: 3.429 CANTO per block (reduced by 10%);6. ATOM/CANTO Ratio: 3.429 CANTO per block (reduced by 10%);7. NOTE/USDC Ratio: 0.612 CANTO per block (reduced by 10%);8. NOTE/USDT Ratio: 0.612 CANTO per block (reduced by 10%);9. cUSDC Ratio: 0.164 CANTO per block (reduced by 10%);10. cUSDT Ratio: 0.164 CANTO per block (reduced by 10%).However, the proposal in September of last year was even more significant. At that time, the community called for a reduction of approximately 54% in the net emissions from both security and liquidity mining compared to the previous period. This means that the security emissions of the network were adjusted from an inflation rate of 37.74 Canto per block (with an annualized rate of approximately 20%) to an inflation rate of 10 Canto per block (with an annualized rate of approximately 5.3%). This decision reflects the community's commitment to the long-term health and stability of Canto.

Closing statement: The expansion of the Canto ecosystem holds great promise, eliciting anticipation.

The decision for Canto to migrate to Ethereum's ZK L2 is not only a technical upgrade, but also a leap in the development of the ecosystem. By being connected to Ethereum's robust ecosystem, Canto is poised to expand its ecological footprint and drive the growth of more application ecosystems.

Under the impetus of multiple proposals within the community, Canto has successfully gained control over emission inflation. This achievement not only contributes to the health and stability of the network, but also forms a solid foundation for the long-term value of the Canto token. As emission decreases, the scarcity of Canto tokens will increase, thereby potentially enhancing their worth.However, the true competitive advantage of Canto lies not only in its technological or economic model, but in its unique culture and philosophy. Free Public Infrastructure (FPI) and community governance serve as the core weapons of Canto, embodying its steadfast commitment to decentralization and the public interest. These cultural traits set Canto apart from numerous public blockchains. For instance, early Canto users can become permanent participants through various means, such as building communities, initiating projects, or running validators. Furthermore, Canto's hackathon activities have attracted a significant number of participants, further demonstrating its ecosystem's vibrancy and innovation.In summary, Canto is at a crucial turning point. Through its integration with the Ethereum ecosystem, adjustments to emission strategies, and its distinctive culture and philosophy, Canto is poised to play a more significant role in the future blockchain world.