FAQs
As interest in the Canton Network grows we see common questions being asked. How does Canton stack up against networks like Solana or Avalanche? How does its approach to privacy and scalability compare? These comparisons are great opportunities to clarify what sets Canton apart.
Let’s break it down.
Privacy: beyond “all or nothing”
Privacy remains one of the thorniest challenges for institutional blockchain—especially in regulated markets. The private side-chain approach (like Avalanche) or L2s force a binary choice. You are either in that subnet and see everything, or you are not and see nothing. FHE and ZKP approaches come closer, but are limited in applicability and have serious security drawbacks today that make these techniques untenable for regulated finance at scale. ZKPs make it possible to hide certain aspects of transactions such as balances on fungible tokens, but vulnerabilities continue to be exposed with high-profile bugs.
Canton introduces a more nuanced model reflecting how financial privacy actually works. Think in simple banking terms: your bank needs to see the accounts of all the customers at the bank. You need to see all your accounts across all the banks you use. That native configurability of privacy rules at scale is not possible with private sidechains. Canton enables selective visibility and the ability to program privacy at the smart contract level, ensuring parties only see what they need to see, while ensuring synchronization of state across the entire L1 and all its subnetworks.
Interoperability: atomic by design
The real promise of blockchain isn’t just connecting chains—it’s enabling atomic transaction composition: combining actions across multiple assets and applications in one indivisible operation. Think of an atomic swap between a stablecoin and a tokenized asset via an app like a DEX or lending pool. This works on all Layer 1s with transparent, native tokens, albeit with the sacrifice of privacy. Canton does this across the entire Layer 1 network too, but with the configurable privacy mentioned before. As soon as you enter the world of regulated assets or money, other public chains point users to their subnets or privacy-focused L2s to implement privacy but sacrifice this core atomicity value in the process and relying instead on messaging bridges or custom protocols that don’t guarantee synchronous settlement, and re-introduce counterparty risk.
Scalability: monolithic vs. modular
Solana has set a high bar for performance, albeit within a monolithic architecture. Its ability to optimize for throughput on a single chain is impressive. But that monolithic model does come with trade-offs: all participants compete for the same global bandwidth, and there's an upper limit to scale.
Canton by design took a different path. It’s a modular network-of-networks, where applications and bandwidth scale horizontally. Capacity is increased with every new participant or operator that chooses to spin up a subnetwork, isolating resources while still benefiting from shared trust and interoperability. Scalability is paired with the ability for institutions to control their own destiny.
It’s the interplay that matters
Canton wasn’t created to solve a single blockchain challenge in isolation like other networks. It was purpose-built for institutions, where privacy, composability and scalability must work together—without compromise. It’s this integrated design, aligned with the operational realities of financial markets and global payments, that sets Canton apart.
- Any institution looking to tokenize assets or cash, service the lifecycle of digital assets, or extend their existing business with multi-party applications on an interoperable network can build new apps, or connect with an existing application.
- The Canton Network increases the utility of distributed ledger and smart-contract technology for regulated financial institutions across a broad spectrum of uses, including the issuance of tokenized assets, cash and securities, trading, custody, securities financing, clearing and settlement, trade finance and more.
- The Canton Network aims to provide the scalability, flexibility and extensibility of the internet, with the security and privacy standards necessary for financial institutions.It provides one common interface, like the web, with access to unlimited applications that set their own permissions, fees and service levels.
- It creates a ‘network of networks’, allowing previously siloed systems in financial markets to interoperate with the appropriate governance, privacy, permissioning and controls required for highly-regulated industries.
- This creates opportunities for financial institutions to offer new innovative products to their clients while enhancing their efficiency and risk management.
- For example, if you look at asset registers and cash payment systems they are distinct and siloed systems in today's markets. With the Canton Network, a digital bond and a digital payment can be composed across two sovereign applications into a single atomic transaction, guaranteeing simultaneous exchange without operational risk.
- Likewise, a digital asset could be used in a collateralized financial transaction via connection to a repo or leveraged loan application.
- In these use cases and many others, assets and value can flow freely where they had previously been constrained by the design of market infrastructure and the trust boundaries and reconciliation challenges between counterparties.
For a full view of applications and participants in the Canton ecosystem, visit canton.network/ecosystem
Applications from RWA tokenization, to on-chain collateral and privacy enabled stablecoins interact on the Canton Network. Apps interoperate with each other, while retaining privacy and control. Highly regulated institutions build and use institutional grade tokenization platforms on Canton such as Goldman Sachs DAP, Broadridge DLR, and Versana for example, and crypto-native participants also run applications, from market leading stablecoins and MMFs, to institutional grade Bitcoin.
The Canton Network provides the foundation for interoperable applications with independent control. Similar to the internet that allows for independent but connected applications with a common protocol - but where application operators have complete control of their web applications.
Canton Network applications are also interoperable, run on the application provider and user's own infrastructure, and with data permissions written in Daml smart contracts at the application level. This ensures control and data privacy for the user.
- The Canton Network is unique in separating consensus among participants about smart contract validity, from consensus on transaction sequencing and confirmation. Consensus on transaction ordering and commits takes place via sync domains.
- Networks of participants validate transactions that they mutually agree to route via the same sync domain. The sync domain guarantees consistent transaction order and confirms that the involved participant nodes are prepared to commit a given transaction. The participant nodes then commit the transaction synchronously and send each other proof of consistent results.
- A collective of independent companies will run a decentralized synchronization domain for the Canton Network. This permissionless, decentralized Canton domain will accept connection requests, sequence transactions, and confirm that participant nodes will commit them, for any participant node.
- Applications may choose to use this decentralized sync domain, or they may order and confirm transactions via any private, centralized Canton sync domain, based on their own preferences around scalability, trust and metadata disclosure.
- The decentralized Canton Network sync domain will use a Byzantine Fault Tolerant consensus protocol. This protocol generates a consistent transaction order, and confirms transaction commits across participant nodes, without requiring trust in any single entity.
- The collective that operates the Canton Network sync domain will also create new applications and connections that bring greater utility to the network and unlock new revenue streams for the benefit of all who use the network.
- For further information and a deeper look, please read the Canton Network whitepaper.