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Understand Canto economic model and operation mechanism

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How does Canto work? Is it a Ponzi scheme?

Canto's Economic Model and Operation Mechanism

Originally written by @FishMarketAcad

Kate, Marsbit

$CANTO has been getting a lot of attention lately, but I haven't seen an all-in-one thread.

So I decided to explore their ecosystem to help you understand what @CantoPublic is, how it works, is it a Ponzi scheme?

Everything you need to know about $CANTO.

The first thing I noticed was that their site had a hacker vibe, which might appeal to degens but might resist tradfi snooping.

Technically, Canto is fully EVM-compatible, making it easy to fork solidity dapps into Canto, which is twice as fast as Ethereum (6 vs12 seconds of block time).

Canto was originally a $EVMOS branch using the Tendermint Consensus and EVM Executive layer (but using metamask) through the Cosmos SDK.

They are a defi-centric L1, similar to @seinetwork and @0xcarbon, because they have built-in DeFi modules, so it is easier for developers to build DeFi applications on them.

What makes them unique is that they have no official foundation, no presales, no equity vesting and no venture capitalists.

This makes them a completely decentralized chain.

But they often hold hackathons online, and they're all community-led, which sounds like fun.

Canto argues that core primitives should exist in the form of free public infrastructure (FPI) :

Free DEXs(e.g. Uniswap)

Free lending market (eg AAVE)

Decentralized currency (e.g. DAI)

Canto wants users to use these core primitives for free, like free parking.

Interestingly, its DEX cannot be upgraded, will remain ungoverned and will never be charged.

LP also doesn't earn fees, so I think LP is purely earning inflation $CANTO rewards.

The Canto Lending Marketplace (CLM) is managed by Canto stakeholders who want to provide the best possible service to developers and DeFi users.

Currently deposited Canto LPs gives you crazy 3-digit APR! But they can't borrow assets as collateral, and they can't be borrowed, so it's kind of like a Ponzi scheme.

The $NOTE is a decentralized currency pegged to the dollar that uses interest charged to stabilize prices to finance public goods.

The rate-fixing system also prioritises stability over yield maximisation, and the interest paid by the borrower goes to the lender, not the agreement.

I see a lot of misconceptions about $NOTE, so tldr:

1) NOTE is an overcollateralized stablecoin, not an algorithmic stablecoin

2) NOTE only for NOTE/USDC/USDT collateral casting

3) NOTE cannot be cast against any unstable LPs at present

You can use http://synapseprotocol.com or http://bridge.blockscape.network will received Canto balance bridge, start your journey!

Make sure you have some WETH in your wallet, as well as ETH to pay for gas and bridge tolls. USDC/USDT tokens can also be bridged to Canto.

On Canto, you need $0.5 Canto to generate a public key. If you need it, please follow me and send me FCFS!

After entering the Canto, you can go to http://app.slingshot.finance/swap/CANTO started buying memecoin, such as CMOON (jo-jo something?) And even CINU (Canto inu). They also have NFT!

How can developers make money if infrastructure is free?

They built cool dapps on it! With contract guaranteed revenue (CSR lol), a portion of the gas fee spent on the smart contract can be collected in the CSR NFT specified by the smart contract developer to be exchanged for $CANTO as revenue.

Dig into the numbers, and things look a little fishy.

Canto has a market value of $270 million, or 64 cents per share. There are over 80,000 wallets on Canto.

But are these price increases sustainable? Isn't the release of $CANTO acting as a Ponzi incentive for inflation?