In a strategic move to redefine the future of decentralized finance, Canto, a Layer 1 blockchain, announced its migration to a zero-knowledge Layer 2 on Ethereum. The migration is powered by Polygon Chain Development Kit (CDK) and aims to focus on real-world assets.
A new chapter in decentralized finance
Launched just a year ago, Canto has been a general-purpose blockchain with an Ethereum Virtual Machine-compatible execution layer. It has offered core financial services like decentralized exchanges and lending markets. The migration to Ethereum’s Layer 2 is a significant shift in strategy, facilitated by Polygon’s CDK. This open-source technology allows the creation of zero-knowledge (ZK) chains that can be customized to reflect a community’s core values. For Canto, this means extending its defining ethos of permissionless sovereignty and liquidity as a public good.
The migration comes after an agreement within the Canto Commons, an open framework that coordinates the decentralized public protocol. Core developers will now focus on building a ZK Layer 2 that taps into the liquidity of a unified Polygon ecosystem, offering fast and seamless access to Ethereum. The security of this new layer will be ensured by best-in-class ZK provers and will inherit its cryptographic robustness from Ethereum.
The rise of ‘neofinance’
This migration is not just a technical upgrade; it’s a step toward a new financial paradigm termed ‘neofinance.’ This concept envisions unlocking financial efficiencies at scale by deploying off-chain assets on blockchain protocols. Polygon’s modular design will enable these efficiencies, offering advantages in terms of access and composability for off-chain assets. However, achieving neofinance at scale requires deep liquidity without compromising security. This is where the trustlessness and decentralization inherent in an Ethereum ZK-powered Layer 2 come into play, all facilitated by Polygon’s CDK.
Canto’s migration also involves using a Plonky2 ZK proving implementation while maintaining a proof-of-stake validator set for decentralized sequencing. This ensures that there will be no changes for Canto’s validators or stakers. Users can expect greater decentralization and trustless guarantees when bridging assets.
In summary, Canto’s migration to Ethereum’s Layer 2 is more than a technical shift; it’s a strategic move aimed at redefining decentralized finance and paving the way for a ‘neofinance’ future. With the backing of Polygon’s robust CDK, Canto is well-positioned to make significant strides in this new financial landscape.