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Last year, the war against Layer 2 has broken out, especially between Arbitrum and Optimism. And now, NFT-fi platforms such as BLUR have received attention among cryptorians. In this context, some services acting as a go-between have been spotlighted recently.
So Let’s introduce two protocols specializing in DeFi & Tradi-Fi: Canto and Sei Network
Canto is a Layer-1 blockchain built to deliver on the promise of DeFi. It's a new commons powered by Free Public Infrastructure. Also, Sei Network has been built on Cosmos SDK. But Sei Network is a decentralized DeFi-specific order book protocol in the Cosmos ecosystem. This network is intermediate between an app chain and a general-purpose Layer 1. These projects are both similar and different. Here's the research below.
Many crypto enthusiasts on Twitter have already noticed the recent buzz surrounding Canto. This is due to the significant price increase Canto's native asset experienced, as well as their flourishing DeFi ecosystem. Canto is a permissionless general-purpose blockchain running the Ethereum Virtual Machine (EVM). It was built to deliver on the promise of DeFi – that through a post-traditional financial movement, new systems will be made accessible, transparent, decentralized, and free.
- EVM Layer 1 protocol execution through Cosmos SDK (EVMOS fork) delivering Tendermint consensus guaranteed by Canto validator nodes.
- CANTO's three primary components are the DEX, the Lending Protocol, and the $NOTE token, which is a fully collateralized unit of account token as a USDC/USDT soft-pegged stablecoin.
- CANTO’s $NOTE was created to ensure the value of one dollar, but the Canto team did not mention it as a stablecoin. $NOTE is Canto’s unit of account and one of the three core DeFi primitives to be featured on Canto at launch. $NOTE is:
o Fully decentralized
o Backed by M1 assets
Sei Network is a permissioned Layer 1 blockchain protocol, thus before developers can use Sei to deploy a smart contract, they must submit a proposal and see it approved by governance. The two types of contracts that developers can use exchange contracts (CosmWasm contracts that employ Sei's DEX module) and generic contracts (CosmWasm contracts that do not need the functionality of the DEX module).
- Native order matching engine - driving scalability of order-book DEXs built on Sei
- Breaking Tendermint - The fastest chain to finality at ~600ms
- Twin-turbo consensus - improving the latency and throughput
- Frontrunning protection - combating malicious frontrunning that is rampant in other ecosystems
- Market-based parallelization - specializing in the parallelization for DeFi
What CANTO and Sei want to Solve
Crypto currency and blockchain network can help internet economies grow larger and faster as a result of more direct, meritocratic value distribution in markets. Public goods funding, as demonstrated by California's roads, can be an effective way to create positive feedback loops that compound economic growth. Today, this economic development theory is being applied to blockchain ecosystems. Canto is one project that exemplifies this philosophy.
The majority of brand-new Layer-1 blockchains assert a distinctive technology stack or consensus method to set themselves apart from rival networks. Canto, on the other hand, is essentially a copy-paste clone of EVMOS, a generic smart contract network that gives the Cosmos ecosystem EVM compatibility. Instead, Canto sets itself apart by making its collection of fundamental DeFi primitives available to users as "Free Public Infrastructure."
In the past, decentralized ownership models have been used to build DeFi apps. In accordance with this framework, protocols take value from users and redistribute it to holders of the protocol's governance token or aim to do so in the future. Canto's Free Public Infrastructure, which was founded on the three guiding principles of Rent Extraction Resistant, Minimal Viable User Capture, and Liquidity as a Free Public Good, provides DeFi services as free-to-use public utilities.
Blockchain ecosystems are typically restricted to the standardized chain architecture on which they are constructed. Due to the "one size fits all" development environment that is typical of most layer 1 protocols, developers are constrained in how they can design their applications. On general purpose layer 1, dApp users must share a sizable amount of block space with the rest of their native ecosystem and endure slowdowns during congestion. Because these dApps lack interoperability, they can only communicate with other programs created on the same chain.
One of the biggest advancements is building an order-matching engine into the chain itself. Sei serves as a decentralized NASDAQ, making it possible for new types of financial products to emerge—everything ranging from live sports betting to complex options and futures.
Also, Sei serves as the infrastructure and shared liquidity hub for the next generation of DeFi apps. Apps can easily plug and play into the Sei order matching engine and access pooled liquidity from other apps.
Ecosystem development of CANTO and Sei Network is currently in progress.
In the case of CANTO, about 5 DeFi services are open and operating, and efforts are being made to expand the Canto ecosystem by hosting online hackathons.
Furthermore, to prevent the possibility of a predatory evolution toward rent-seeking behaviors, Canto’s DEX protocol:
- Cannot be upgraded
- Has no official interface
- Runs in perpetuity without the ability to implement fees
At launch, users can interact with the DEX contracts through Slingshot, a DEX aggregator platform
- Slingshot is a decentralized exchange that allows for trades across a variety of L1 and L2 networks, including Arbitrum, BNB Chain, and Canto. Slingshot's clean UI and UX make it a convenient way to trade into CANTO as needed, for example, if you've transferred USDC to Canto via Synapse and want to switch that USDC to CANTO for an imminent NFT drop.
- Alto is a no-fee, jazz-themed NFT marketplace that has emerged as the hub of NFT activity on the Canto chain. Users can utilize the platform to browse top and trending collections, purchase and sell NFTs, and mint their own NFTs (only 1/1s are currently supported).
Canto Hackerton Winners
DeFi & Infrastructure – Canto Name Service
Ecosystem Support & Awareness – http://Provenant.art
NFTs – Magnet
New Things/Games – Kanto
Sei Networks's Ecosystem
Sei Network is still in the test net stage, therefore not much information about the ecosystem has been made public. However, the official website claims that more than 70 dApps are now being readied for distribution, with the currently available DApps beingthose listed above.
- The Vortex protocol, which operates on the Sei Network, is a decentralized order book-based derivatives exchange that may make use of the huge liquidity of the network's own order book. Since the network can make use of IBC, it allows for leveraged trading up to 10x and promises to provide perpetual futures trading of more than 35 different assets.
- Pharaoh: On the Sei Network, the Pharaoh protocol is a decentralized synthetic exchange. A token created to monitor the price of a particular commodity is known as a synthetic token. The specifics of how it will operate are yet a secret.
Market Index & Tokenomics
$CANTO is currently open to the public and can be traded on some CEXs and DEXs. On the other hand, Sei has not yet announced its tokenomics and the market index cannot be found.
Point: Centralized Initial Distribution of CANTO token
According to ByBit, after the Settlers of Canto event, almost 129 million of the 130 million CANTO earmarked for early contributors were awarded to only 29 addresses. Because there was no vesting at the start, a considerable quantity of voting power, staking influence, and sell pressure was concentrated in the hands of a few people.
Team & Partners
Scott Lewis, the co-founder of DeFi Pulse and Slingshot Crypto, is a Canto contributor and leader. Another group of participants is the Plex team, which is in charge of the network's development, its Free Public Infrastructure, and the canto.io frontend. A DAO proposal was also just approved to hire the B-Harvest team, an established team within the Cosmos ecosystem, as Canto's core developers.
Another notable contribution is NeoBase, which manages the Canto EVM blockchain explorer and has created a Canto analytics dashboard with protocol details, including the lending market, as well as coverage of the Canto DEX and Forteswap.
The Sei team, which was founded by Jeffrey Feng and Jayendra Jog, includes members with backgrounds in IT and trading firms like Goldman Sachs, Robinhood, Databricks, and Airbnb.
To enable cross-chain DeFi interactions between Sei and other EVM-compatible chains outside of the IBC ecosystem, a partnership with the Axelar IBC bridge has been developed.
Also, Vortex Protocol in Sei ecosystem was acquired by the widely used Ethereum-based decentralized exchange (DEX), SushiSwap for an undisclosed sum on 10th, Feb 2023.
Canto is a new blockchain, but it already has a devoted and growing community. There was no pre-sale or venture capital funding. The mining of medium and long-term liquidity accounts for 80% of the genesis token supply (see a full breakdown here.) From the beginning, core development has been driven by the community. Plex, B-Harvest, and Neobase are examples of notable core developers in the ecosystem.
Sei has secured a private round with well-known VCs, Multicoin Capital, Coinbase Ventures, GSR and so on. In the upcoming weeks, specifics of the round will be made known to the public.
Seamless interoperability of DeFi trading and transaction can be realized by the advancement of DeFi infrastructure. These protocols, Sei Network, and CANTO can be good cases for improving public utility.
In order for Web3's dApp ecosystem to be active, various infrastructure services must be developed. Just as improvements are made to public infrastructure for whole society development, as CANTO and Sei Network provide public utility as public goods to improve the existing limitations, future Defi hegemonic competition will be activated and the development level of Dapps will increase more than ever.