P2P.org becomes validator on $4T Canton Network

P2P.org has become a validator on the Canton Network, a blockchain platform for institutional finance that handles more than $4 trillion in tokenized assets. As a validator, P2P.org will operate nodes that verify and record transactions on the network.

Launched in May 2023, Canton is a blockchain platform developed to support regulated institutions, with emphasis on real-world asset (RWA) tokenization, interoperability and adherence to compliance standards.

The move adds P2P.org — a staking infrastructure provider that reports managing over $10 billion in assets across more than 40 blockchain networks — to a growing list of participants in Canton’s ecosystem, including Goldman Sachs, JPMorgan, Citi, Santander, Bank of America, HSBC and BNP Paribas.

Jonathan Reisman, product manager at P2P.org, told Cointelegraph that many blockchains were not designed with institutional requirements in mind, slowing adoption in traditional finance.

However, Reisman said solutions such as the Canton Network bring “firms into an ecosystem where tokenization of assets, secure trading, and even innovations like BTC wrapping can be developed in a way that aligns with institutional standards.”

He added, “Validators only process the transactions they’re a party to and maintain them on their own ledger. This makes privacy more straightforward and institution-friendly.”

Related: P2P.org expands staking services with TON integration

Institutional staking on the rise

On most proof-of-stake blockchains, validators earn rewards for securing the network by staking tokens. In other words, validators lock up crypto in exchange for yields.

Staking has become one of the dominant trends in the industry this year, with a broader push by institutions into networks such as Ethereum and other public blockchains.

Rather than following the proof-of-stake model of paying validators through staking yields, the Canton Network issues its native token, Canton Coin, aligned with how participants contribute to activity on the network. Infrastructure providers receive 35% of the distribution, application developers 50%, and users 15%.

According to Canton, the design is meant to tie rewards to actual usage and engagement on the network. Each application also has the flexibility to set its own degree of openness and confidentiality.

Like Canton, more protocols are building blockchain infrastructure to address institutional demand. In February, Lido launched its v3 upgrade with “stVaults,” modular contracts designed to give institutions more control and compliance features, citing growing demand from institutions.

More recently, Anchorage Digital added institutional custody and staking for Starknet’s STRK token. The service launched with an initial yield of 7.28% APR.

Liquid staking protocols. Source: DefiLlama

Regulatory developments in the US are helping to boost investors’ demand for crypto yield.

In August, the Securities and Exchange Commission (SEC) issued new guidance on liquid staking, which allows investors to deposit crypto with a provider and receive “receipt tokens” to trade or use in decentralized finance (DeFi) while their assets remain staked. 

The SEC said that these receipt tokens do not constitute securities offerings under certain conditions, a decision industry executives described as a win for both DeFi and institutions.