Unchained - Is Canton Permissionless? CEO Says Yes, but SuperValidators Need Approval

Episode Date: April 22, 2026

Digital Asset’s CEO faces pointed questions about Canton’s core claims and admits something surprising about the network’s architecture. ======================================================== As Bitcoin's application layer, Citrea gives you access to the first trust-minimized BTC on a fully programmable platform and a native stablecoin for Bitcoin, ctUSD.  You can now participate in Bitcoin capital markets with lending, privacy, payments, Bitcoin yield, trading and predictions. You get expanded Bitcoin utility without sacrificing its security.  Citrea mainnet is live. Put your BTC to work at citrea.xyz/unchained.   Ether.fi is giving Unchained listeners 15% cashback on food and ride apps — and that's on top of the 3% you get on everything else.  Your bank is charging you to use your own money. Laura switched and loves her card! Go to ether.fi/unchained to claim your offer. ======================================================== Canton is the chain behind JPMorgan’s deposit token, DTCC, Broadridge’s $400 billion repo book, HSBC, Visa, and a growing roster of the biggest names in global finance. It describes itself as a public permissionless blockchain. But is it?  Yuval Rooz, co-founder and CEO of Digital Asset, faces off against Alex Gluchowski, co-founder and CEO of Matter Labs, and Dragonfly managing partner Haseeb Qureshi in a live debate.  The charges range from foundational: Canton cannot enforce financial rules without a trusted third party, its validators are permissioned in everything but name, and there is no universally shared ledger. Rooz fires back on all of it and, at one point, concedes something that may surprise you.  If the label matters as much as the technology, this episode will force you to decide what blockchain actually means, and whether that answer has consequences for the institutions staking their infrastructure on it. Host: ⁠⁠⁠⁠Laura Shin⁠⁠⁠⁠, Host / Unchained Guests: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Yuval Rooz: Co-Founder & CEO, Digital Asset Haseeb Qureshi: Managing Partner, Dragonfly Alex Gluchowski: Co-Founder & CEO, Matter Labs Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, everyone. Welcome to Unchained, your no-hap resource for all things Crypto. I'm your host, Laura Shin. Thanks for joining this live stream. Just FYI, everyone, that we pre-recorded this a few hours before the stream. Before we get started, a quick reminder, nothing you hear on Unchained is investment device. This show is for informational and entertainment purposes only, and my guest tonight may hold assets discussed on the show. For more disclosures, visit Unchained Crypto.com. Bitcoin changed how money works. Citrae changes how Bitcoin scales. With a trust minimized BTCC, and a native stable coin, CTUSD, Citraia enables Bitcoin capital markets with lending, privacy, Bitcoin yield, and more. Get started at citraea.xyz slash unchained. EtherFi is giving unchained listeners 15% cash back on food and ride apps, and that's on top of the 3% you get on everything else. Your bank is charging you to use your own money. I switched. Go to ether.fi slash unchained to claim your discount. Today's topic is Canton.

Is it a real blockchain? Here to discuss are Yuval Ruse, co-founder and CEO at Digital Asset, Haseeb Qureshi, managing partner in Dragonfly, and Alex. Alex Kulukovsky, co-founder and CEO of Matter Labs. Welcome, Yuval, Haseeb, and Alex. Great to be here. Thanks for having us. I'm excited to be here. So we're going to start with Yuval.

Yuval, I'm sure you're aware that you're probably going to be a little bit in the hot sea today. but I actually think you're probably somewhat used to it by now, judging from what I'm seeing on social media. So let's just set a baseline for the listeners. Why don't you maybe describe what problem you're trying to solve with Canton and how you've structured it to solve that problem? And then we'll have Alex and Haseeb kind of give the criticisms that they want to have you answer to. Sure. So first of all, great to be here. I don't know if I'm going to be in the hot seat.

Maybe other hosts or participants will be in the hot seat. You know, I think that for me, you know, when we enter the space, so my co-founder started Cumberland, which is a big OTC trading desk. We both came from DRW on the show. I can't remember who it was. Said that this was founded by DRW. That's just not true. We left DRW to start this company.

but nevertheless, our view was we wanted to bring capital markets on chain. And in order to do that, our view is that you need to be able to convince issuers to move their books and records to be natively on chain. And in order to do that, you really need to solve the problem of how do you give settlement finality, get an issuer to be comfortable if they don't want their books and records to be public for the whole world to see. there's a whole set of problems that you need to solve. And really, how do you do that on a permissionless set of infrastructure?

So it's not to say every application or every asset has to be permissionless, but it's actually kind of similar to the internet. The internet is a permissionless piece of infrastructure. Yet if you build a website on the internet, you're not kind of mandated to make your website public permissionless for everyone to be able to access it or see the information that is stored. on it. So, you know, for us, we're trying to make capital markets natively on chain, and there's a lot of features that had to be solved as a result of making that happen.

And actually, I just wanted to go back when you said that DRW didn't launch digital asset. I mean, so you used to work there. You left working there to start it. And then I believe Don Wilson, who is one of the, who is the founder of DRW, that he is also a co-founder of digital asset. That's, is that correct. Yeah, but DRW has no access to digital assets, GITs or anything like that. It's a separate company. It's an investor in our company.

So DRW is an investor. They're not the largest investor. There are other investors. So again, both Eric and I, our third co-founder has nothing to do with DRW. And he shame actively from the world of cryptography. So it's just that me and Eric, my co-founder. or started our career. Well, Eric started his career. I actually started my career at Citadel and then moved to DRW. And we both left DRW to flood this company. Okay. And just to paint the picture for

listeners, you know, you have deals with DTCC. JPM is going to do their deposit token on Canton. Like you just, you know, Broadridge, who is, you know, a very more obscure tradfire player, I think, to the crypto world, but, you know, clearly embedded in that world. So you're sort of at the center of, you know, trends around RWA tokenization, just general institutional adoption, privacy, stable coins. You know, these are all huge trends happening right now in crypto. So, you know, I think like you were sort of, I don't want to call it stealth mode because I don't think that's what it was. But to the crypto world, you didn't really come on the scene until like finally your token

launched and all of a sudden we see, oh, there's this token with a high market cap that's on coin gecko. I think that's why suddenly just the last few months there's just been a lot of public discourse about Canton and what it is. So let's now start with the arguments. Alex, why don't we start with you? I know you have some criticism against Canton.

So why don't you go ahead and lay them out? So actually, hold on. Before we go to Alex, let me just jump in here because I want to set the scene of how we're going to fan the flames a little bit. Because I don't see my role as necessarily criticizing anybody here, but more accentuating the drama.

So you've all, I'm sure you're well aware. There's been a lot of drama in the last couple of months around Canton. A lot of conversation happening on Twitter on X. How would you summarize the drama that has that has catalyzed around Canton? Where do you think it's coming from? And how would you summarize it for the audience? I mean, my honest opinion, why the drama have been created is because we've been able to sign a lot of these partnerships and deals and nothing else. to be honest, I think that

some of the things that have been said, Canton is a centralized database with a coin on top of it. It's a permissioned network. You know, I can keep on going. Are all things that, you know, first of all, are not true. And second of all, I would say that

if people really had those topics deep, deep in their heart and really said that this is not good for the industry, I would say that those topic would have come about a lot of L2s, a lot, some L1s that would have, I would say, even worse characteristics than Canton, yet didn't seem to be problematic for the industry. And I think that, you know, very similarly, I would say that some of the partners that have partnered with us, if they were to choose different L ones to work with them, they would have been deemed heroes and really like the knights of, you know, on-chain capital markets. And yet what they chose canton sudden turn to be the bad guys. And again, as you know, as you know, this industry is very good at, you know, tribalism.

And I think that that's for the most part, the big part of it, not necessarily because it's focused on facts. So to me, it sounds like the really short version is they're just jealous. Kind of. I don't know. I don't tell us. But I think that, again, I think that we didn't do a pre-mine. We didn't go and publish all of these white papers that we're going to, we're saying how we're going to change the world. And we've just very quietly executed.

And now we're signing all of these deals. Just today we announced a partnership in Japan with Mizuho, Nomura, and JPX around tokenized JGBs, announced a partnership with Hanwa, you know, Visa. You mentioned JPMorgan. Last week it was HSBC payments. And we're just executing on those things.

I don't know if they are jealous or what, but, you know, a lot of people have been building positions and, you know, they are defending their position. And I'm actually okay with it. It's normal for them to do that. But again, I would love to understand how what we're doing is so existential for this industry and is so terrible compared to other things that have been hailed with so much praise to date. You know, we'd love to understand that. Okay, Alex, so go ahead with your main criticisms.

Sure, too. I think this is going to be really interesting debate. To give some context to the viewers, we are building Previdium, a private institutional blockchain infrastructure on Ethereum. So naturally, we are solving the same problem as you've all formulated. We want to bring traditional institutions, issuers, and capital markets on chain. And so we are in many of the same rooms where these conversations happen, and we understand the perspective as it's presented to the capital market participant.

in traditional finance and we see the debate that's happening publicly on acts and in other public spaces and what was striking to me about Canton I think where the the core tension were all like major criticism and emotional response of the community is coming from is quite a lot of misrepresentations around this specific project that is quite unusual for this space like the statements we've seen made are not accurately reflecting what's actually happening. So I would love to talk facts as you all invited and actually go and dive and try to understand not the theoretical, ideological things. Or is it permissionless?

Is it not permissible? Is it decentralized? Not decentralized? Who cares? We're serving traditional institutions. We have a specific set of customers. We want to bring them on chain because it's going to help the entire industry. So we want to look from their perspective what they actually get.

and what they're being promised, what they're getting. And I think it starts with definition. Canton is calling itself a public permissionless blockchain. This is how it's spelled on the website. This is what you all just said. I think this is the core misconception to begin with. I believe, and like I would like to understand it better in this debate, that Canton is not really a blockchain.

Because if you, and like it's not about the definitions. It's not about semantics. It's really about the properties. When you say blockchain, you're tapping into more than a decade of an industry with certain value, certain value that was generated, some innovations,

some new ways of doing things that were not possible before that this industry brought into existence, starting with the Bitcoin white paper, which actually where the idea of blockchain originates from. And so my question, My first question to Yuval in this context would be, Yuval, what is the actual innovation? What's the invention?

What's the breakthrough that Canton has built? That was not possible 10 years ago. Why would something like Canton, why you could not build it 10 years ago? I mean, the ability to have, first of all, to say that Canton is not a blockchain. I mean, Canton follows a UTXO model. that can be validated by multiple parties,

you could actually have decentralized composability on Canton, which could not be done in message-based architecture. So Canton does do a decentralized state management, which is the idea of a blockchain. Unlike Providium, which is a single source of RPC messages that can be called by their customers, and we can talk about Alex ZK architecture. But no other blockchain offers, you know, atomic composition of smart contracts with privacy.

So, you know, that's what you can achieve on Canton, that you cannot achieve on other blockchains to the best of my knowledge, including on Providium. So when you say atomic composition with privacy, you know, you are talking about, like you're saying that this would not be possible to build with traditional messaging systems to which this sounds strange to me. Like the swift messaging is atomic, like the message is passed atomically between the two parties. And so it does with, composition. You don't have a guarantee without a reliance on a third party. You don't have any

guarantee of composition today. So this is amazing. So I agree with you. This is what makes the blockchain a guarantee, like certain guarantees of enforcement of financial rules without reliance on third parties. This is actually the point of the Bitcoin white paper where like the core problem there, the Satoshi was solving is the problem of double spent. How do you solve that? It's actually in the abstract of the white paper. How do you solve double spend without relying on the birth?

parties. And so my question to you is, how do you actually solve double span with preserving privacy and with preserving the integrity of the composability with whatever rules that you want to compose in Canton? What's the mechanism that prevents the double span? On Canton, I mean, the issuer of an asset and the issuer I just want to be clear can be a real-world issuer or could be a decentralized party like a Bitcoin, is the mechanism that can protect, you know, double spend. No different. Again, it's a UTIXO model. They are a party to the transaction, and they are the ones that prevents double spend.

Oh, so then, yeah, it sounds like Alex's first point that maybe you don't, like it's not a blockchain, that it could have been done before blockchains existed that. It sounds like that. Exactly. Exactly. It's like circles database can guarantee the same. Right? And no, that's just not true.

Don't pick and choose what you want to listen to. I said, either of a real-world issuer or a decentralized party like Bitcoin is. Bitcoin is a decentralized asset. So you could have a decentralized asset that doesn't have a real-world issuer, meaning there is no centralized intermediary that can prevent double spend. But you're outsourcing, you're outsourcing that function to a different chain then. But you don't, you don't. This is not present in Canton. Yes, it is. Why do you say? How do you prevent a decentralized, sorry, how do you prevent a double spend of a Bitcoin? Like,

you can put Bitcoin on Canton? Is that correct? No, I said that Bitcoin is a decentralized asset. So it is. I'm asking you about Canton. Well, there is an asset, CBTC, which is a decentralized asset on Canton. You don't rely on one third party to actually prevent the double spend. It's completely decentralized. What does it mean? Like who, which party you rely on? Which party? Like, what's the actual mechanism that prevents the double? Lying on a consensus, no different than other other blockchains. Oh, it's very different. That will spend. So, hold on my understanding, I might be out of my death here, but my understanding of Canton is that the super validators are responsible for No.

Like they see all the state and they manage all the state. That's not correct. They don't. Okay. No. Please. Okay. Sorry.

I have clearly a shadowy understanding here. Yvall, can you explain what are the super validators doing if they're not guaranteeing the correct state transitions? Sure. So the super validators do two jobs on Canton. What they do is they do act no different than validators on Ethereum and Bitcoin with respect to Canton coin specifically. So imagine with respect to Canton coin specifically.

So imagine with respect. In fact, the Canton coin specifically, Canton coin is a fully public, permissionless asset, like every other crypto asset. In addition to that, they run a composability infrastructure to actually compose transactions. On those transaction, Haseeb, they behave more like ISPs on the internet. They don't know what transactions they hold compose. They act as an ordering, a decentralized ordering service, but they don't have, they're not validating the actual business logic of the asset.

They're almost like Bitcoin sidechains. That's sort of the relationship with Canton and the Canton. Again, Gantone assets, RWAs that are running on Mainnet, the supervalidators purely act as a coordination layer and a time stamping layer. They do not get to see the transactions that they are actually helping to process. So who validates the transactions? Who guarantees that when you, spend one UTXO that has some asset and produces two different

PtXO as a result again the issuer of the asset which could be of two types a centralized issuer which is an issue of a real world asset and a decentralized issuer which could be an issuer of a decentralized asset meaning has no real issuer behind it well CBTC is a like it's not the Bitcoin validators or Bitcoin miners who validate it, right? It's a decentralized. Yeah, it could be a some group of. So essentially a multi-sick.

No, because they run consensus across them, Alex, and they don't just sign transactions. I understand that they run consensus, but in the Canton itself, when you do the, you consume one contract and you, one demo contract and you produce two different demo contracts, like how do you ensure that the same, you have one Bitcoin locked in this one contract that you consume,

How do you ensure that you don't produce two versions of Bitcoin? Because your privacy infrastructure provides each party only with their view. So, like, if I know where you're going with the global state verification of an asset. I know that that's where you want to go. And we're going to talk about ZKSink and some of your reliance on the third party that sees all the information. And they can actually upgrade the smart contract to be a malicious smart contract without the user actually ever knowing about it. We can go into that.

So, like, honestly, I answered the question on Canton, you could have fully decentralized assets and you could have centralized assets that rely on a real world issue that anyway, you run the same risk that you would run on any public permissionless network. It's absolutely not the same risk. So let me then explain how I understand it,

and then you can correct me if my understanding is wrong. Okay, and before you do that, just one quick note for the listener, Alex mentioned demo contracts, which is digital asset modeling language. That's specific to Canton. It's basically like a smart contract on Canton. I just wanted people who didn't know what that term was to know that. Sure.

So what happens in the reality is the standard demo contract provides the rules that. So the way, like, Yvald, please correct me if I'm wrong. I'm just going to be sharing my understanding. Obviously, you're the expert here on Canton. But the Canton functions as not as traditional account-based blockchains, it's a UTXO model. So each contract is a separate UTXO. Like Bitcoin, UTIO, yes. Exactly, like Bitcoin.

So like all UTXOs are encrypted, so you only see the hash. Like only individual parties that are designated by the DMA can see what's inside the UTXO. And when you, and it does. basically acts as like each of this UTXO is really a multi-sig. A small multi-sig with a number of parties who are privy to the state approving the state transition. And the validators, kind of, or the mediators serve the role of the counter of this votes. If you get enough of the votes, then the EGXO is consumed and new contracts are being created.

And so what really happens there to prevent the double spend. is the standard demo finance contract templates require the issuer to always be the cosigner and authorizer of average transaction. And this creates two big problems that directly go into the Canton's claims about integrity and privacy. On the one hand, your integrity now completely depends on the integrity of each individual issuer. And so, What this practically means, and you really need to clarify this, you depend on the signature of a single hot server, which is basically exactly the same process assumptions

as what happened to layer zero yesterday, with the DVN one-of-one multi-sick approving the invalid transaction. And if this happens, if the issue gets compromised by a sophisticated attack like a state-level actors like North Korea, Korea, the situation gets a lot worse because now the minted assets are going to propagate throughout the network without anyone being able to catch it, creating the systemic risk for the entire network. Thank you for bringing that up, Alex.

Actually, very good, very good example. So what I would say... But first, is this the correct description of what happens? No, it's not. But can you clarify what actually happens there? So the nice thing about Canton is that we don't rely on an issuer to save us. Unlike in providiums, we're an issuer, whether intentionally or unintentionally hacked, as you said, by North Korea or whoever, can upgrade your smart contract without your knowledge as a user of a providium. Can upgrade your contract with...

Alex, now I'm going to talk and you can listen and you can refute my claims later. How about that? So within a block, a user can actually upgrade the smart contracts of ZK Sync, can literally drain an account, downgrade the contract, and all you're going to get as a user is an RPC call from a closed-sourced piece of software. Again, your providium is closed-source, which is not a good idea for a security base. Yes, it is. Your privacy one. Your open-source one is not the privacy one. can upgrade a contract, drain your account,

downgrade the contract, and all you're going to see is a proof that EVM processed the state transition correctly. You have no idea why your account balance went down. Again, in order for you to know your account balance, you have to keep on pinging an RPC. You don't even have the state on your own node. Providium just writes some kind of a proof

to Ethereum Mainnet, which you have no clue what that proof actually proves, other than EVM acted correctly. And that's it. On Canton, what I would say to you is that in order for you to actually do a state change, first of all, you need to have multiple parties agree to a state transition. The issuer would be one of them. So already your point about a one out of one signature is a bit odd. But second of all, I would say if someone wants to change the smart contract, which I would assume on Providium's, the issuer has or the operator, has that right if you want to do the proxy model of being able to upgrade

software without to have anyone's. At least on Canton, what I would say is every user would know that there's a change to the smart contract because they are the ones that are actually validating the transaction. They're not looking through an RPC on some proof that they were not even participant to creating that proof. So again, first of all, your description is incorrect. And second of all, I would say that that attack vector on a providium user, not only is worse, the consequences are even more terrible than Canton. So what happens on Canton when the issue is compromised is it's not that any of the

individual smart contracts that exists before gets. gets corrupted, but instead the e-share will just mint a huge amount of the token and inflate the token supply with the underlying asset being fixed. It means everyone is going to lose the corresponding proportion of the asset. They lose. Well, what happened on yesterday with layer zero and what happened last week with parity was not that individual users were compromised. Let me just finish this here. I was not interrupting it. But the asset was printed. There was an unauthorized inflation of the asset for the Polka dot and for the Kelpdao. So the attacker basically just minted a huge amount of assets for themselves and dumped on the market.

And like inflated, like it propagated for the market. This is unpreventable in Canton and not just unpreventable. It's undetectable. It's way worse than in. public blockchains where there is a single canonical state that everyone can see. So what you describe about Pervidium is, uh, it is, is like absolutely incorrect. Whenever you have a public change on any smart contract on Ethereum, it's going to be visible.

Anyone will see what's happening in the block. It's impossible to hide. So like if something like that happened, it would be publicly visible. And we can talk about the consequences. What this means like, you know, we're, we're serving institutions. They have very different requirements from the cypherpunks. they have other mechanisms to correct, but you cannot hide the change of the smart contract. But in Canton, you cannot prevent it.

You're exposed to the same exact attack vector as what happened yesterday to layer zero, and you cannot detect it. Because if this happens in a... So the way the attack unfolds is this. The issue is compromised. They get a proposal, proposer, or like a submitter, who is also... basically like the attacker just gets a some asset to themselves then they go and make a submission to the issue the compromise server signs the submission and the attacker ends up with

hundreds of millions of dollars worth of asset and then they slowly start propagating this for the system tell me how you prevent this so I just want to be clear so first of all real quick because you said that it's not closed source. Providium use open source licensing model. The ZK stack is fully open source and provide all components required to run a standard chain. Period.

Providium, trademark, adds a closed source enterprise modules that enable private permission deployments for institutional environment. This is correct. There is no contradiction. The protocol part is fully open. The protocol part is open and visible. What's closed source?

is the middleware that you run to connect your banking systems, to connect to your authorization systems and so on. They don't touch on the protocol in any way. Well, it seems like a stack that does privacy with close source should enter. No. The privacy, the vertical part, smart contracts, zero knowledge proof circuits, everything opens for it. Literally your writing says to provide privacy. Literally I just explained what this means. It's a middleware that you use to configure the access of the users and the wrong

whole-based account model. Okay. And yeah, this episode isn't about prividium. So just... No, no, no, no, no. Sorry, sorry. If I'm totally fine, but if a person who runs a chain that it is... I think it's fair play. I think it's fair play. I think he gets a bunch of that. We can't put it out the author of the claims about his, his, his, you know, to say, to say that Canton is not decentralized, but a providium is run by a centralized party that gets to see every thing. I don't care if it's decentralized or not. Again. I'm saying your properties that you advertise certain properties that you don't possess in your system. Your system is worse than public blockchains in terms of integrity, like containment of systemic risks. In fact, it's

worse than the traditional systems. So it does not have the characteristics of a blockchain. So I would describe Canton as a mediated messaging network. And from this perspective, it has a role. to play in the traditional finance. There are some workflows that don't require a blockchain. And I believe the Canton is actually deployed in some of this workflows, maybe with something like Broadridge

where it's essentially being used as a better database, a database with specific financial workflows that are more easily configurable and it has a value there. It's just not a blockchain. And it does not offer the properties of a blockchain. Again, I just want to take your attack vector. What prevents today from any stable coin provider if they got hacked to mint a billion

dollars worth of stable coins on chain? How do you know that they got hacked? You will immediately see the transactions happening. Like the smart people are a lot mint coins. Right? The way so the way they usually works. I'm replying. I'm replying. Someone mint a billion dollars of stable coin on chain? Yes. Cool. And they didn't know that. Look, I'm applying to you. The way they structure, like we cannot talk about every issue because they all have different procedures in place. But the way, so I'm not deeply familiar with how all of them operate. Okay. But I'm familiar with the industry-wide best practices. And they run something like this. In exchanges, you have hot wallets and cold wallets. And you have different. degrees of different permissions on what can be done with hot wallets. Like they usually have lower limits and then most of the SS are in cold wallets.

I assume the issuers operate similar model. I'm not familiar with exactly how they structure this. But there is a huge difference between- With the model. One second, you wanted to attack Canton by saying the issuer got hacked. So can we acknowledge that the issuer got hacked? Because you can't say like, oh, they run these great services and all of that stuff.

I'm going with your claim, the issuer got hacked. So now suddenly you're saying that the issuers are all very safe. Like, I'm just going with your model. Just go with me. The issuer got hacked. You started by saying the issuer got hacked on Canton. So let's just say the- Fine, fine, fine.

Depending on how the issuers are structured, if they have a single function mint, which is operated by a single hot key on a hot server, that's a really bad design of security for the t-shirt and I don't know whole family. Typically they do.

Sorry? Well, Alex, let's just give, let's assume somebody is hacked, stable coin issuer, and they mint a quadrillion USDC. Let's take you up hypothetical. Just a hundred million dollars.

A nice, no, a nice billy, a nice billion. Let's say they meant a nice little billion USC. All you see is that now USDA, given the war that has happened in the Middle East, have had really good issuances. It's just part of normal business, right? You just saw another half a billion dollars

of USDC add to the chain. So what what really, like what blockchains give you are the rules that can be enforced. If you encode your rules as like, I can do anything, there are absolutely no checks on what I can do. Sure,

this can happen. This is not how it's usually structured. Usually it happens to be... Your entire attack vector, your entire attack vector was that on Canton, if, the issuer gets hacked, Canton is terrible. That's what you do.

Your model depends on the issue you're enforcing average election. Any RWA on any permissionless chain relies on the issuer not being. Yeah. Yeah. I feel like we. No, no, no. No, no. No, no.

If Alex went down this rabbit hole, I would like for him to dig himself out of it. And my point is, the point is, we need to stop throwing these parachutes into these holes because we can't go into these corners and then like, again, the referee is separating the fighters. Like,

he just said, an issuer got hacked. An issuer minted an amount of money on Ethereum, on Solana, on any of those things. And nobody knows that the issuer got hacked. even the issuer themselves.

Part of business. Of course they know. Of course they know. Like on public blockchains, any hack would be immediately visible. But that's the thing. The hack, it's a legitimate issuance.

Exactly. Everyone would see that the issuance would happen that there is a certain amount. They can have monitoring systems that observe the public state. Here, they would not be able to monitor this. The issuer is the one that needs to say

we got half. Because you as an observer, even though you've seen $100 million of USCC issued or USDT or whatever stable coin, that even though you could see it, all you know is that another $100 million have been added to a public permissionless change. So you agree with me that the only person who could say we got hacked, these are $100 bad million, are they sure? Can we at least agree on that? that's uh you know what you know what so i so i so we're going to we're going to call this right now because we need to move to ads and then cover a whole bunch of other topics before we before time is so just by the bell wouldn't be a book time so in a moment we are going to discuss whether canton is permissionless and um and dive into other things but before

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Back to my conversation with Yuval, Alex, and Haseeb. So I definitely want to tackle this question of whether Canton is permissionless or not. And I think in order for the audience to understand this, we need to discuss the issue of the supervalidators. So Yuval, before we dive into the meet on this question, I just had a very quick little fact check I needed to make, which was, can you clarify the number of supervalidators? because I saw 13 on a few different sites. I saw 46 on the tie. I didn't know why there was this discrepancy. 46.

It's just that they choose to run on like node operators. And those are the ones that are 13. Oh, okay. That's interesting because, yeah, multiple sites said 13, but only one said 46. So I wasn't sure. Okay, so then why don't you just define what a supervalidator is and give some examples of the different types of institutions

that are in that. group and then explain why it's invite only to be a supervalidator. So I'll start with the end, which is not invite only. The model of how do you become a supervalidator has a process no different than any other chain. On Ethereum, you have to stake 32Eth. On certain chains, you have to stake even more. On certain chains, you can't even become part of the sequencer. Most L2s, you have a centralized sequencer.

There is no multiple participants in the sequence. There are some L1s like, I think, Hadera, closed network of a few entities that can run the sequencing. On Canton, everybody can become an SV, assuming the network agrees with a supermajority that they are an additional value add to the network. there's nothing that would prevent unchained from saying like we think we can add value to the Canton network and as a result of that will become. So we decided, we decided that, you know, in most chains today, you know, the model is staking. Our view is that although staking has some interesting properties, one of the things that a lot of chains have had a lot of challenge is how

to actually bring activity to the network. And our view was that although securing the network is a very important component, our thought was that actually adding sweat equity and value to the network is much more important. And again, we can be challenged that it was the wrong decision. It's stupid. It's all good. But our thesis was, so many chains have written really good technology, have done a really good job,

actually creating really novel, interesting technology and then fumbled on the go-to-market. And therefore, what we said is securing the network is important, but actually we wanted the people that own the network, the supervalidators, not own the whole network, but own kind of like governance on the network and make important decisions, would be those that actually are not just staking the network,

but actually have skin in the game, meaning they have put a significant part of their business or an important investment in the business. And therefore, anybody can apply to become a supervalidator. You put a proposal, and if you got a super majority vote by all of the supervalidators, you join as a supervalidator. And those names will go all the way from small wallet providers that have been early in the journey of Canton and have put quite a lot of investment. to defy protocols that have built them the network

and have made serious investments in the network, all the way to Broadridge or TradeWeb or SBI or DRW or Visa. This is not a closed source network of the Wall Street cabal that is like trying to like preserve their strength. It's the idea is that everybody can participate, but our measurement of why you should become a supervalidator is because you add some kind of non-linear value to the network compared to just being a passive participant on the network.

That's really what a supervalidator is. So, Yvald, let me sharpen this word because permissionless in crypto and blockchain is a very special word. It's like the word democratic. It has all these other extravalence that we put on it as a culture because it's been so core to, what has made crypto crypto historically. So explain to me, so you've, you've countered many of the

people online saying that, oh, Canton's not permissionless. You said, no, it is permissionless. Can you explain what you mean by that? What does permissionless mean in the context of Canton? And what does it mean and what does it not mean? So permissionless to me is that, first of all, everybody should be able to build an app on the infrastructure. Everybody should be able to participate in the infrastructure, meaning I should allow any person to be able to connect to the infrastructure, participate in the infrastructure. It doesn't mean that just by connecting to the infrastructure,

like I gave that example on the internet, I will have access to every asset on the network or that I will have access to every application on the network. And again, everybody can try to become a supervalidator on the network. It doesn't mean that they will be able to. And again, I think that a CBO point about like, it's democratic, again, I challenge that because I would say that most L2s then would not fall into this democratic definition, and yet nobody said a word about it, because again, it's a centralized

sequencer, the operator of that sequencer, the day that they want, can flip the switch, moving from public permissionless to fully private permission, and all of your assets now are locked on that L2, right? You cannot do anything. They can decide unilaterally to censor any person that they would want on that L2. Again, I gave example, there's a few L1s that have a permission set of validators running the consensus for them. My view is that I would say that Canton is much more permissionless than those, but again, we came up with a different model of how to set who can participate as a supervalidator.

I don't know. I can't remember what's the number for some of the L1s today, but in order to be a full node from a staking perspective, we're talking about tens of millions of dollars. That is not very permissionless in the sense that, like, most average Joe cannot become a full node, right? So I guess my point is we just came with a different definition of how you can join in a permissionless manner. It doesn't necessarily mean that everybody would be able to participate in it.

Right? You agree with me that not everybody can become a full node on suey today. So your definition of permission, this is basically you come and ask for permission, and then if it's granted, then you can participate. So I was going to say something like that. I feel like you're painting this equivalence between there being a minimum requirement on Ethereum and Solana and these other chains, which isn't the same thing as like kind of needing to apply on Canton

and then being granted the permission by the existing validators. Like there is literally a permission moment of entities deciding, you know, will we let you in or will we not? So that's not this thing is meeting a minimum requirement. Just to be clear, in order to meet the minimum requirements, a group of individuals came and set their permissioning about it. So just because you could say, what I'm happy for you to say is that the permissioning on some chains

are a bit more objective or more objective in the sense. But again, if two-thirds of the full nodes on Solana or Suey or Ethereum were to come together, guess what? They can change those permissioning today. And they have done that in the past. So you're again... Yeah, I mean, like I said,

I would still say that one is meeting a requirement and then the other, like, you apply and then you're granted permission or you're not. You're meeting the requirement as of right now, I guess is my point. And again, like it's like saying that these networks are fully permission and then we find out that a chain went down

because the foundation did not pay the AWS bill for all the nodes. I mean, we can take this to an extreme of how we want to have these arguments. Everybody can say, I want to become an SV, and if the SVs vote in their favor, that is fine.

On every chain today, if two-thirds of the full nodes decide they want to censor one of the full nodes, they can do that as well. And again, there have been multiple examples how all the pure definitions immutable, not true, there have been hacks, we forked the hacks. I mean, it's no longer immutable. All of these definitions that we claim to be so pure are only true until they're not. And my only point is,

again, I'm happy for Canton to be criticized that it is not permissionless in the same way that Ethereum and Solana is, I'm totally fine with it. I'm totally in agreement with that. I'm explaining our rationale is that anybody can become a supervalidator. And if you look at the spectrum of the types of companies that are supervalidators on Canton, there is no very unique way of saying like, oh, they're clearly going after just banks because as of right now, there's not even one bank that is a supervalidator. Maybe not for long, but as of right now, there's not even one.

one bank that is supervalidator. And there are traditional FMIs and that there's also like really new DGEN kind of like crypto providers that are all SVs. So clearly we are not trying to permission only Wall Street people. We just thought this is a model that would actually create value to Canton as we've actually been able to prove. And that's it. I mean, I don't have to defend.

And I think that this is where we started. My point to Haseeb was, I think that suddenly everybody's nitpicking Canton use of the word permissionless, because like I said, I think Hadera is a permission state of validator. Nobody's like going and throwing flames about like, why are they calling themselves permissionless?

Nobody's... To your earlier point, Haderra's not winning, right? You guys are winning, which is why there is this spotlight. Yeah, but so we evolve, and I, like, I don't want to belabor this, but I think it's more that, like, there is actually a moment where the validators are granting permission to whoever's kind of like applying. So it's just, it's just like, I don't want to go into the semantics. I understand the points you're making that, you know, all these different entities are setting standards and like you have to meet them or not. And this is something that is decided by a certain group.

Like, I get your point. I'm just saying that there is an actual moment where permission is either granted or not in Canton. But I do want to ask about that. Like, what percentage of entities that have applied to become supervalidators have actually become supervalidators or been rejected? For the most part, all have been approved. Not necessarily immediately. There have been feedback from the network about, like, hey, this is not enough value given where Canton is. But again, stellar, ripple.

B&B, every L1, fully permissioned set of validators. Again, I'm just, I'm just very eager to understand in a non-bag kind of. Yeah, well, so, Yuval, let me say, like, I agree with you that there are a lot of chains that have this kind of structure, where basically you have a potential group or committee that decides on who's going to be led into that committee, and they participate in. consensus and they're basically stewards of the chain. The difference is that usually the way that we describe the consensus for these networks is proof of authority.

The authority can be a single party. It can be a small committee. But generally, there's a term for that. It's been around forever. It's a long, long history of proof of authority chains that have these kind of committee-like structures. It sounds like that's what Anton is doing, not that dissimilar from a lot of other chains that have this kind of institutional banking-oriented go-to-market like,

stellar like ripple. I guess the reason why you're getting all this pushback is that, again, it's like calling something democratic, right? It's saying, well, you know, it is democratic because if you want to vote, you can apply and then we'll decide whether you get to vote. Like, you could argue that's democratic, but that's not what people mean when they say democratic, right? I think that's why you're getting such an allergic reaction to the use of the word

permissionless is that it's a very special word in crypticulture. The same way the world democratic is a very special word. Listen, I appreciate that, but I think I will again disagree because I don't think that anyone would say that BNB is proof of authorship or something like that. And again, most of the chains, I can tell you, until Canton started getting a lot of heat, I think would have all described Hadera, Stellar, Ripple, BNB, base, arbitram. I can keep on going as public permissionless chains. and I don't think that they would have gone into that nuance. I just don't. But again, I gave my thesis.

Our thesis is that the SVs can go up to 100, can go even beyond. Right? There's nothing that actually there's no cap on that model. And I guess from my perspective, you know, I've explained that a lot of chains when they design their tokenomics and their structure are trying to solve a specific problem. And, you know, some chain said, oh, in order to have the token rally faster, we'll just create the full node that you have to stake significantly more money. They didn't actually solve for the usage and actually building on the chain.

And, you know, other drawdowns to what we've done, again, clearly from a marketing perspective, we're getting heat from using the wrong word in its purest form. On the other hand, you could say, look, we've actually brought states. stakeholders that put a lot of skin in the game and actually build a lot of things without any grants. We've given today two grants from the Canton Foundation. But what about rewards? The rewards are objective, Alex. They're for everyone to see.

So they are objective. There is no kind of foundation that did a pre-mine and then sitting on a treasure of dollars that is deciding in a very opaque manner who gets what reward and for what reason. So yeah, we actually align the incentives in a much more objective way with the builders. And who decide what degree of rewards you're getting as a validator who joins? What do you mean? Well, you're saying like it's unlike grants, we have a transparent and straightforward model of who gets what. So I'm wondering, like, who decides what level of supervalidate, you have these different levels, right? like tiers with higher tier, the more reward you get.

Like put your side some of this. It's vote. All the super validators applications are public for everyone. Okay, that's fair. So basically it's a permissionless model where an initial set of participants decide who becomes the next participants and how much they will get. And that's fine with me. So it's, I think that like I have much less

problem with the with Canton calling itself permissionless because it's really obvious for everyone what it is if you have to apply and you get you guarantee permission you can call this permission list like it's it's very you know everyone who has listened to this conversation now make their may we'll make their mind and we'll have an opinion i think it's like it's very straightforward i think it's a lot more interesting to talk about whether it's a blockchain or not because they those the this definition gives very different properties, and I think we have not yet to explore all of them.

Yeah, I actually, so why don't we go into that part? Because like, I, so, you know, I am not a technical person as most people know, but from what I could tell of what I read, it did seem like Alex's point earlier about how the point of Canton is more around messaging was valid. And, you know, it wasn't totally clear to me. So, like, and, you know, maybe this could apply to literally any, RWA on any chain, I'm not sure. But it's sort of like, if Canton were to break or any chain

that's holding or that's processing transactions for an RWA, then what does that mean for that asset? Like, does it not really affect the asset? Because there's simply another sort of backup system that can handle those transactions. Let me try to frame the question. It's not about the asset. It's about enforcing financial rules without the trusting trusted third party. This is what Bitcoin white paper was about. This is what Ethereum is about. This is what all the public blockchains, what blockchain technology in general offers. This is what the institutions also look up to blockchains when they embrace this technology. If you are, if you still depend on some trusted mediators or trusted third parties to enforce certain properties,

it's not a blockchain, it's just messaging, maybe cryptographically facilitated messaging between multiple parties. Maybe it's something like a docu-sign for tokens. When all parties agree, they can see their state, like whatever we mutually agreed on, they approved this, it goes forward. What blockchains enable beyond this bilateral relations is enforcement of financial rules in aggregate across, like for smart contracts that encompass multiple parties which can be permissionlessly joined.

And this are, you know, it goes from simple use cases like enforcing a token cap to some more really interesting and exciting topics like liquidity pools, defy, margins, automated margin in liquidations,

collateral management. All of that is not possible on Kansas, on without a trusted third party, which you completely depend on in basically this one-of-one multi-sig security style. So hold on, hold on. It seems very intuitive that like any time you have a centralized issue, you are trusting a third party, right? Like there's no universe in which you have issues.

No, no, but in Canton, you only depend on them. Because in Canton, there is no way to enforce the rules by consensus by the entire network, the way your Bitcoin and hearing them. How many times did I tell you to go and look at CBTC, which is a decentralized asset on Canton? I mean, maybe you should go and look at it and come back and revise your statement. Second of all, it's kind of odd, I have to say, to sit and listen to this argument, because, again, a providium relies solely on an operator to write proofs for you. I'm just trying to understand most of things that happen of the hacks

where an issuer-based asset, forget about Canton. The reason why these hacks have such a bad outcome is not because of the centralized issuer, because if USCC or USD were involved in a bad hack and the hacker wasn't smart and actually stayed on those centralized issued asset, guess what? Eventually, why do people get so angry at Circle with the previous hack is because they didn't act fast enough to prevent the hacker from actually moving into permissionless

assets? So the issue is not with relying on a centralized issuer. Actually, we would have been happier, as we've seen a lot of the cryptospace saying, if the centralized issuer were to intervene sooner rather than allowing assets. actually these assets being traded and swapped into permissionless assets, where then they can no longer interfere. So again, on Canton, no different than any other public chain, the issuer is centralized in real world assets, and they have different properties or similar properties to what they would have on public permissionless chains. We have stopped the conversation earlier from explaining to me

how if the issuer was not aware that they were hacked, similar to any other public chains, how you as a third-party observer of what seems to be the same type of activity that they do the same day all day long would actually prevent anything bad happening from again having this newly minted assets be swapped into a permissionless assets,

which is what always happens when these hacks take place. So again, I would say that at least on Canton, as a party to a transaction, nobody can upgrade the smart contracts on you without your knowledge. You are the one verifying the transaction yourself. You're not relying on a third party doing a proof for you, right? And again, we're going to go back in circles. And Laura, I have to say, if you're not technical, I think that it's dangerous, especially with someone who has reached like you, to say, but it sounds right. I can tell you that if Canton goes down for Broadridge, it would have a systemic issue on running what today is close to $400 billion of repo. And I would say that within the next 12 months, we'll get closer to a trillion dollar worth, which actually does have systemic implications on banks that need to make.

meet liquidity threshold. Now, would those banks and people like Broderidge consider alternative in the case that one of their liquidity pathways had an issue? Absolutely. But I will tell you that assets that have applications on Canton are no different, and I would say in most cases, are just as systemically critical. And Canton is not just a messaging base. Again, I would say that any RWA the actual asset is not the token. It's the asset that sits in a fund admin off-ching, right? That's the reason why people want some of these RWAs to intervene when there's a hack, because no money is actually being stolen from Circle.

The treasuries that they have are still at Bank of New York Mellon. The bank deposits are still at the banks. What actually happens is someone goes and takes a USDC that has been stolen and swaps it into Bitcoin or Ethereum, and that's where the control is lost. So it has nothing to do with real world assets that are being stolen. And that's it. I mean, I just think that it's important to stay factual and not to say, like, if I'm not technical, but that sounds right.

So I want to ask you then just to explain, because some of the things that I read about Canton were that for the sync domains, they are in charge of message queue sequencing, they do time stamping for participant notes. I also heard, I think you said earlier in the podcast on our other podcast that Canton does not do state. So can you just? I said on this podcast that we do state decentralized state management. And I would say that every, every blockchain uses messages. I mean, MMPL are messages waiting literally in a memory pool before they get committed into a block.

I mean, RPC messages. I mean, like we can just keep on going. There's messages everywhere the way the computers communicate. Let me maybe shirbin the question a little bit. So I think the charge that Alex is levying when he calls it a messaging system is not literally that, okay, well, obviously, all blockchain send messages. I think the claim is more that it's not load bearing, right? So normally when people think of USDC, it's like, okay, if I get USC, I know it's a bare

asset, I now have a claim on this dollar. And it doesn't really matter what Circle says. obviously they can later freeze me or whatever, but barring that, this is mine and I have a claim to it. The claim, I think, and Alex correct me if I'm wrong, when you say it's a quote unquote messaging system is that it's more like these are digital twins in the sense that, okay, Broadridge has their own back end. They're recording who their counterparties are and who owns what in these reverse repo transactions, but basically what's happening on Canton is just like a replica of what's happening on their own system. Maybe it's faster. Maybe it's easier to read.

Maybe it's easier for everyone to synchronize on, but it's not load, bearing in the same way the USTC is load bear. But Haseeb, just listen to what you just said. In your words, not mine, I can hold USC stable corn. And it's a bearer acid, granted that USDC doesn't freeze me. I mean, he yourself said it. So it's not a bearer. I mean, it's a spectrum, right?

It's a spectrum, right? There's a, no, no, no, no. It's a bare acid unless. I think this entire, like, like, Yval, thank you for answering the question, but you answered not the question I asked. I asked you about the enforcement. Again, I'm going to come back to this original idea of blockchains. Blockchains is something that enforce that those are systems that enforce financial rules

without reliance on trust of third parties. And Canton cannot ensure this. So when like for bilateral agreements, sure, we don't have a trust of third party. We just sign messages between. I mean, I don't know how many times I'm going to. to repeat the same thing and you're going to keep on ignoring it, you could have an asset on Canton, which has a decentralized party. That's not a... What does it have to do with asset? I'm not asking about the asset.

All right. I'm going to put a kibosh on this thread because I don't think we're making progress. I want to go back. I'm just going to say that we have this conversation with your co-founder, uh, Shaul and show we confirmed this. He admitted it in a public threat with me that, yes, Canton cannot do this. Canton cannot doing anything. Canton cannot enforce aggregate properties. I'm going to actually cut the thread. Actually cutting this thread. I want to come back to this point, Evo, because I think it's a very

interesting one. You claim that, like, well, is it not also true for USC? Like, is there really a difference here between what I'm describing with USC and what maybe is the trust model on something like Canton? I'd like to hear, Alex, your reaction to that point. Do you think there's a difference

to train an acid on Canton and something like USC. That's an RWA on Ethereum. I think everybody agrees that this is the canonical model for a permissionless, quote unquote, RWA. But to Yuval's point, like Circle can decide to delete your coins at any time. And in fact, people are calling for USC to delete people's coins. So what exactly is the difference,

is there a real difference worth noting here or is it purely a cosmetic one? So let me describe what's possible on Ethereum. I don't know if Circle specifically follows this, but what's possible on Ethereum that is not possible on Canton. Okay? So on Ethereum, you can set limits. You can create a smart contract.

You can make it upgradable with the cold keys that you hold in the cold storage by circle with a multi-sick, whatever. And this smart contract enforces limits. So it says, like, sure, the servers can mint some amount of tokens up till, you know, one million per day. And beyond this point, it requires manual confirmation by people. You can do this on Ethereum. I don't know if Circle does this, but you can do this.

You cannot do this on Canton. On Canton, your asset can be compromised up to 100% of the asset by compromising a single server. That's my point. Okay, well, let's assume, for the sake of argument, the Circle does not do that. Let's assume that Circle just has mint function and it can mint as many as they want.

Then no difference. Then no difference. I'm talking about the capabilities of if the, if Circle just does the, like, you know, they have a min function and it's controlled by a single hot signing key. Sure. The only difference will be that it's going to be immediately publicly visible to everyone that Circle supply all of a sudden jump like 100%. On Canton, it's not going to be visible. It's going to propagate silently through the system. That would be the only difference.

Listen, Alex, at this level, at this point in time, I would literally say, if you literally just, just can actually go and open an account on Twitter, you could hack all of providiums. You keep on just propagating this lie. And I keep on trying to say to you, you could have a decentralized party, and you can keep on just propagating this lie on a live show. And we're just going to technically prove you wrong. And you're just going to keep on propagating a lie, which is not very good for someone like yourself to do. And I'm just telling you that we're going to make some proofs on Providium, on what you can do with Providiums, and I think that it's not going to look good for you. So you could keep on making this claim, and I'm just trying to

tell you, let's just go under your assumption that an issuer got hacked, whether it's a single server and a multiple server. And I'm going to make the claim that we cannot prove on this call, neither you or me, and I'm actually recommending that you stop making the same claim, even though I'm telling you that you're wrong, that let's say an issue have been hacked, period and of subject, whether it was a single server or multiple servers, and just answer a Haseep's question. That happened. What can you do on Canton or what can you not do on Canton?

What protections do you lose on Canton that you get from any other chain? You don't, on Canton, you rely solely on the multi-seek. On Ethereum, you rely on smart contracts that are enforced by the network. This is the difference. So you know on Ethereum, you can construct smart contracts that are going beyond the Malteseech. On Canton, you can't. Explain to me, like a smart contract that will say you can't mint more than a million dollars at a time. Exactly.

And beyond that threshold, it will require a different set of keys. In Tenton, you cannot do that. You cannot do that because it's going to be enforced by the submitted transaction by the issuer or by the complicit party with the issuer. And in DEML, you know, the mediator will not see it. just count votes. They will just count votes. It's just not true. It's just absolutely not true. You could have for minting all of the protections that you said that even if a signature by the issuer would not be able to, again, all of the parties that are participating are the ones

validating the smart contract. You would actually have to change the smart contract first and to say now I can actually mint a different smart contract. That's it. You're just, you're just, you're just spewing falsehoods here without actually doing your... You can't enforce aggregate properties of your asset and this is what your co-founder confirmed. So you cannot do... I guess we'll have to take it after the debate and we'll just provide our PIC and you will provide your POC. But in Canton, you rely on hot servers and this is basically what happened yesterday with layer zero. You can't enforce the network, cannot enforce the rules.

The rules are always enforced between a small set of a finite set of participants. You cannot have an open contract that everyone can verify that does not rely on it. Then I were to tell you a decentralized party and you're going to keep on ignoring it and I'm going to keep on reminding it. And Canton Coin is literally an asset that invalidates your whole statement. So to say that Canton can't have it, is just ludicrous. Again, you rely on the multi-sick of the coin issuers. Like if you put more servers into multi-sick, sure, it gets better.

But it's still a multi-sick. It's not a decentralized enforcement. You run a BFT across them. I don't understand this whole point about a multi-sync. The BFT is a consensus between them. What authorizes the transaction is the signature on the, by the mediator. Mediator approves the transaction.

All right. You know, we're running up against time. So I just want to make sure that we touch on two more topics. So we're going to, let's talk about the CC coin. As far as I understand, a large amount of CC, Kantan's native token was used to incentivize validators. So a good percentage of the token was accumulated by Super Bowl. validators who were invited early. So, Yvall, I know you were upset by this question somewhere else,

but I figured it was worth getting your response here on the record. So Austin Campbell tweeted, Canton has many problems, the first of which is a governance problem. I do know many institutions who have looked at Canton and said, why would I invest deeply in a thing where others pre-created all the tokens and who use it only because DRW was paying them to? So what's your response to that? I saw like some back and forth with you and your team with Austin. But if you could just in your answer explain what the financial incentives were for those early partnerships and activity on the network as well. What were the financial incentives for people that participated in Ethereum early on?

I mean. Oh, so there wasn't anything beyond just like you'll get in early? Absolutely not. And honestly, like, here, here is what I will tell you. I am willing for me as a company. So first of all, again, DRW did not create Canton. Right. And actually, one other question.

Sorry, for the early participants, they were just earning from the start. There was no kind of like pre-allocation. No. Okay. No. And here you go. I mean, we, you know, it's so easy for someone like Austin to, put a statement that DRW paid, which is actually making, you know, putting a lie for eternity

on, on, you know, on something that he will ever, you know, have to defend where he got that information. But which, which network today? Like, if I build an Ethereum today, like, should I go, like, well, what's my financial incentive to build an Ethereum? No, you build an Ethereum because it actually solves a problem for you. And it actually generates for you as a business. So this idea that people will not build on Canton, which I'm actually surprised because I would like to understand which financial institution today did not announce that they are already building on Canton

or participating in Canton. So I don't know which community bank Austin is talking to, but I would like to understand, right? You know, there have been no payments. I'm actually happy as kind of like the creator of the technology to go head to head who can get an audit done on his company more efficiently and cleanly because we haven't done any token deals, we haven't done any payment deals. Like, you know, I know it's annoying for people that Canton is a top 20 chain

without doing all of those funny stories that crypto have been doing for a very long time. I know it's annoying. But we have been patient. We've been working on this for 11 years. we haven't done shortcuts. We've tried to do things the right way, right? And, you know, I don't know. I guess it's going to continue to be annoying

that we're going to continue to grow the activity on Canton and just do things the right way. I don't know. I don't know. Like, there haven't been any payments, anything. I mean, like, you know, so I don't know, I don't know even how to respond to someone who clearly has no information to come up with a statement that DRW paid people

to join Canton? Like, honestly, like, it's just outrageous that people even give the stage for statements like that without actually saying, wow, that's a big statement. Can you prove that to us? And if you can't prove it to us,

you're no different than Candice Owens saying that Brigitte Macron is a man. You're literally a lunatic at this point. Thanks for calling me a lunatic. I appreciate that. No, I didn't say you. I said Austin. I think he's talking about Austin. He was talking about Austin. He wasn't talking about you.

Austin said that DRW paid, you were just reading his tweet. Right? If he made this kind of statements, which are big statements, better be able to come with the proofs, right? I mean, like, I think it's extremely unhelpful for this industry to make these kind of statements and not be able to back them with facts. And I think that giving the time of day to these type of things is not good for us as an industry.

Whether you like Canton or not, I'm happy with the criticism. But to blame people for effectively bribing people without coming with facts, I actually think is not something that we should give the time of day to. Okay. All right. Well, I mean, there's a lot of other criticism. I'm just going to ask you about one more, which I actually think this one was the one that kind of kicked off some of the public debate about Canton. It was when Rebecca Reddigg called out Don Wilson, who is a co-founder, as we mentioned before, of digital asset, for his remarks at Das when he said that MAB was not, quote, unquote, suitable for financial markets.

You know, a lot of people were, you know, noting, well, actually, MEV exists by different names in TradFi. So I wondered, you know, what your response was to that. I would love again for anyone to give me and tradify how you can reorder transactions once they hit a matching engine. Would love to know that because that's what the MIV does. It reorders. It gives someone the ability to reorder. By the way, messages, Laura. So messages come into the MAMPool and you as an external participant who looks at the MEPPOL can make a payment to reorder those transactions.

I would love to understand where that happens in Trotify. Again, I'm happy to get criticism and I'm happy to have these conversations, but when people make these big statements on payment for order flow, payment for order flow can be criticized. I'm totally fine with it. But someone who actually pays for order flow has to meet best execution, cannot reorder transactions, cannot say, oh, I'm getting this order from Robin Hood, and therefore, I'm going to, first of all, do all.

of my orders and then I'm going to execute. Not allowed to do that. Criminal. Cannot do that. So making a comparison between payment for order flow and MEV is just not an apples to apples.

But because people don't understand the nuances, it sounds good. We're against the bad guys. The bad guys are the Citadel's, the DRWs, all of those type of players. But again, in TratFi, once an order hit the matching engine based on price and time, you cannot reorder it.

It's just not possible. And that's the only criticism was that at the end of the day, payments for order flow and high-frequency players have shrunk the spreads on markets, and they have provided better execution. If you get reordered your message because someone saw that your order has enough interesting market data in it, where they want to go ahead of you, I'm trying to understand

what's the value for the person who submitted that order? And I think that all the Don claim is that you don't have to have M.E.V. Yet people choose to have MEV. There are chains that don't have MEV. And the question is, why? What is the value?

And I would then go and ask some chains that claim to have a lot of fees on their chains. Why is majority of the fees on their chains are actually MEV chains rather than just regular fees. So if most of the fees on your network are MEV, someone should ask themselves,

well, why are people willing to pay so much money for MEV? People are not stupid. There is value, right? People don't spend money for no reason. So clearly there's a reason why people spend money in MEV. And I think what all that Don is saying is that if you're Wellington, I don't think you would be okay.

Wellington is an example. I didn't have to come up with a specific name, but any type of. And you send a big order, and you know that people now can see your order and decide to reorder transactions, his view, personal view, is that that's not suitable for markets. And again, that can be criticized. But to say that there's MEV in Tradfai, I don't know. I've yet to see an actual concrete example where people can reorder transactions, which is what is.

Okay, I'm going to speed run through a bunch of other criticisms that I came across because I think it's really good for people to be able to hear your responses to these. So Sven Werner published a few in an article and we'll actually, we'll start with one about privacy. So I guess, or sorry, about independent verification. He said that in Ethereum, when you mint a token, the entire network sees it and can verify its existence. And by the way, I'm quoting Gabe Shapiro, who summarized these in a tweet. He said, in Canton, each participant stores and processes only the data relevant to its own contracts.

There is no universally shared ledger, just a virtual global ledger composed of private ledger segments that exchange cryptographic proofs. And so Werner concludes, quote, if Goldman Sachs tokenizes an asset on Canton, that token is just a data entry. It is no independent market presence. Unlike a real tokenized bond on Ethereum, a Canton-based bond cannot be independently verified unless Goldman Sachs allows it. What's your response about that? Cool. So I will, I will again hopefully show my level of integrity, which is that is a true statement. There is no public verifiability on Canton. That is true. On Canton, only if you are a party to a transaction, you could verify that transaction. That's a true statement. Now, I think that understanding

that our view is that the most important thing when it comes to financial services is that parties to a transaction agree on the state of the transaction. And that although we are going to introduce in the future, as of right now, there is no public verifiability. And again, I go back to my example earlier, and I don't want to open this because clearly we've been going in loops around it and nobody would have been willing to actually answer my question. When we deal with issuers, we are by definition taking a risk on those issuers. And the only people that Sven is correct, if an issuer minted more coins on Canton, there is no public state, you don't get to see it.

But my point is, if that issuance was malicious, you are relying on the issuer to tell you that it was malicious. So the fact that, again, you would see an issuance happening does not tell you anything. And again, I would then venture to say that the thing that happens on public permissionless chains is that when something bad happens with respect to a real world asset, what does the attacker do as fast as humanly possible? they move out of a real-world asset to a permissionless asset, so nothing can then happen to them later on with respect to this asset. Because clearly, if a real-world issuer were to know that something bad happened, they would immediately freeze it and would prevent from the assets to move, as we said on USC and USDT and everything. So I am willing to accept.

I think people will be surprised how soon public verifiability is coming to Campton. But it's not because we actually think that, and this is where maybe I would go against then, this is not to protect you from Goldman issuing a bond or at the end of the day, when it comes to real world assets, the issuer will decide what and who can do things with their assets. you could have an issuer say that an asset is fully permissionless to move on Canton. They can't decide to do that. The type of use cases that we want to bring Canton to have north of a few billion dollars of

unchain fees are not these use cases. Like I said, you will see JPI versus USDA is one of the busiest financial corridors. But these are Trat-Fi organizations, and we think that doing these things natively unchain provides a lot of value. So it's not, it's not for me to disagree with spend. What he stated is factually true. I disagree kind of with his conclusions of what are the implications of that. And very soon you will see public verifiable on Canton as well. Okay. I know we're at time. I just, I just really want to ask you about one more of his criticism. Laura, we got to wrap it up. Okay, okay. Well, we'll have to, we'll have to call it.

We, this, wow, this was intense. Not the most well-organized discussion, but it's okay. That's kind of the nature of these things. Thank you, everybody, for tuning in. And thanks to all of the participants, Haseev-Uval and Alex, especially Yuval. I do feel like you were in the hot seat. But you managed it very admirably. So, yeah, this was a great discussion.

I hope it was informative for people. Thanks for tuning in. I've enjoyed it. Thank you, Laura. Thanks, Haseeb. Thank you. That's a good spoil of all. Thank you.