- DL News interviews the man behind Canton Network.
- He shares his rationale for building the $5.5 billion network.
- Critics question if Canton is truly a blockchain.
For the last 11 years, Yuval Rooz has been working on one goal: getting traditional financial institutions to use blockchains.
The problem? "Crypto ideologues," as he puts it, are lambasting his institution-focused blockchain, Canton Network, and slamming it for not being as open and decentralised as they’d like, while other competitors avoid their wrath.
“Nobody made noise from the Ethereum ecosystem on all of these L2s that run literally a centralised sequencer,” Rooz said in an interview with DL News at EthCC in Cannes.
“You go on Base. Base can censor the living hell out of you. You go on Arbitrum. They can censor the living hell out of you.”
“The reality is, ‘Why Canton is getting a lot of the noise?’ It’s a compliment,” Rooz said.
This battle between crypto idealists and pragmatists comes as institutional interest in blockchain technology soars following full-throated support and regulatory approval in the US.
Existing blockchains such as Ethereum are being matched by newer offerings like Canton, and Stripe and Paradigm's Tempo, who are meeting the institutions where they are with tailor-made platforms.
Canton has quickly become a major contender since its 2024 launch. As of December, it claimed $350 billion worth of onchain assets move across the network daily, although this figure can’t be independently verified.
In comparison, Ethereum’s daily decentralised exchange volume sits at around $1.3 billion, according to DefiLlama data.
No world without middlemen
Rooz, 45-years old, has led Digital Asset, the firm behind Canton Network, since 2019. He previously served as chief financial officer and chief operating officer after founding the firm in 2014.
'The point of blockchains is not to get rid of intermediaries.' — Yuval Rooz
He’s an alumni of the traditional finance industry, having worked as an analyst at Citadel and subsequently as a trader at DRW for a total of seven years. And he’s not afraid to challenge some of the crypto industry’s most dearly-held convictions.
“I’m not a believer in a world without middlemen,” Rooz said. “That it is an extremely naive way to think about the world.”
“The point of blockchains is not to get rid of intermediaries,” he said. “The point of blockchains is to reduce the competitive barrier that exists in today’s traditional world.”
They’re bold things to say at Ethereum’s biggest conference. Just weeks earlier, the Ethereum Foundation, the blockchain’s biggest nonprofit, put out a new mandate which reaffirmed its commitment to so-called cypherpunk principles — which include cutting out intermediaries.
“All work must be architected to be maximally unstoppable and to function without incorporating centralised intermediaries or kill switches,” the foundation said in the mandate.
The Bitcoin Whitepaper, commonly viewed as a guiding light for the industry, explicitly says the technology is designed to cut out middlemen.
Make way for Wall Street
Yet Rooz’s views are an accurate reflection of a broad industry trend. Crypto’s founding ideals are increasingly making way for pragmatism in the face of institutional capital.
Bitcoin, built to exist outside the influence of banks and governments, has become increasingly institutionalised. Firms like $14 trillion asset manager BlackRock package and sell the asset via exchange-traded funds, forsaking the network’s self-custody benefits.
Similarly, dozens of crypto projects are rolling out the red carpet for institutions to tokenise real-world assets like debt and real estate on their platforms, often by compromising on crypto’s ideals.
To be sure, many of the assets institutions are tokenising on blockchains are, and will remain, permissioned and centralised.
The question is whether the networks those assets run on should aim to remain as decentralised, open, and permissionless as possible, or make concessions in order to become more similar to the existing financial system, and therefore a more comfortable place for institutions to operate.
Rooz says it’s necessary.
“In order to get enterprises more comfortable and be able to move faster into this tech we had to do all kinds of gives,” he said.
To be sure, Rooz said networks like Ethereum, which prioritise decentralisation and openness above all else, are valuable.
“I just don’t believe that they are going to have material adoption,” he said.
“If you run $20 trillion worth of assets you can’t just say, ‘I’m just going to trust decentralised governance taking care of things.’ It’s just the reality of how the world operates.”
Truly a blockchain?
On the other side of the debate, organisations like the Ethereum foundation argue that ensuring blockchains like Ethereum are decentralised, open, and permissionless is non-negotiable.
“These are the conditions that make Ethereum worth using, and therefore worth building, and worth defending,” the Ethereum Foundation said in a recent blog post. “They must never be traded away for convenience: without them we have nothing.”
With Rooz’s views at odds with some of the technology’s die-hard believers, it’s not surprising that Canton has drawn a substantial amount of criticism.
That criticism often focuses on whether or not Canton is truly a blockchain, and truly permissionless.
Most people in the industry consider blockchains, by definition, to be immutable ledgers. In short, once a transaction is recorded it can’t be reverted, nor the attached data altered.
Canton Network breaks this standard by allowing the removal of historical data, a feature explicitly designed to help those using the network comply with EU privacy and security laws.
On Ethereum, anyone can help process transactions and earn staking yield, as long as they have the required Ether tokens. Canton, however, limits who is able to contribute to the network.
Becoming a so-called Super Validator on the network isn’t open to the public, and is typically given only to institutions and financial service providers. New Super Validators also require approval via a supermajority vote from existing Super Validators.
‘Crypto ideologues’
There’s a thesis behind Rooz’s compromises.
He said he believes real-world assets are where the majority of crypto growth will come from. Those assets are, by nature, permissioned. They require know-your-customer checks, are bound by regulatory and compliance needs, and require counterparty assurances.
'The world is not permissionless. Even if we wanted it to be permissionless, it’s just not.' — Yuval Rooz
So a system that specifically caters to those requirements is better than a fully open and decentralised platform like Ethereum, he said.
“The people who are screaming the loudest about this topic are the crypto ideologues that keep on confusing crypto assets versus real-world assets,” Rooz said.
“The world is not permissionless. Even if we wanted it to be permissionless, it’s just not.”
Another sticking point is that a large amount of CC, Canton’s native token used to pay for transactions and incentivise validators, was accumulated by Super Validator institutions who joined the network early on.
Critics argue this created an uneven playing field, and will discourage commitment from additional institutions.
Since its launch in November, the CC token has swelled to a $5.5 billion market value, resulting in vast profits for those early Super Validators.
To be sure, Ethereum’s creators set aside tokens for the Ethereum Foundation and the development team at its genesis. But they also allowed anyone to start mining the asset from the start, as opposed to Canton which limited the ability to earn tokens.
Measuring success
Just how successful Canton has been since its launch is also a matter of great debate.
The network’s creator has inked several deals with big names in the traditional finance world.
In December, market infrastructure giant DTCC partnered with Digital Asset to tokenise assets on Canton.
In January, Kinexys, J.P. Morgan’s blockchain business unit, unveiled plans to issue its bank deposit token JPM Coin on Canton.
Payments giant Visa and USDC stablecoin issuer Circle have also joined Canton as Super Validators.
Yet at the same time, it’s impossible to independently verify how much actual activity is taking place on Canton, or where that activity is coming from. That’s because the network is opaque by design, a necessity for its institutional users, Rooz said.
'If Canton vanished tomorrow, would there be any impact to the repo market?' — Austin Campbell
Critics argue the $350 billion in daily trading volume of US Treasury repurchase agreements Canton reports shouldn’t be viewed the same as activity on other blockchains.
“This is purely a post trade reporting secondary data feed,” Austin Campbell, a Wall Street veteran turned crypto industry figurehead said. “If Canton vanished tomorrow, would there be any impact to the repo market?”
Another common criticism is Digital Asset’s ties to DRW Holdings, Rooz’s former employer.
DRW is among the earliest, deepest, and most influential backers of Canton Network and Digital Asset, leading funding rounds, providing liquidity, and acting as a Super Validator and Canton Foundation member.
This broad involvement means the firm holds significant influence over Canton, which could be off-putting as the network tries to get more competing institutions to use it.
Campbell has suggested some of Canton’s early success was influenced by DRW paying partners to use the network, based on his conversations with industry insiders.
Don Wilson, CEO and founder of DRW, said his firm has never paid anyone to participate on Canton.
Campbell went on to clarify he has no first-hand knowledge of any payments being made, and said on social media he had received legal threats from DRW in response to his comments.
“DRW's lawyers should know this is not a great tactic,” Campbell said.
A Canton spokesperson declined to comment and directed DL News to DRW, who did not immediately respond to a request for comment.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.