We’re nearing the public launch of Canto, a Layer 1 blockchain providing core DeFi primitives designed to support the Free Public Infrastructure. We’re excited to invite the community to review the following details on token distribution for the Canto network, including the inaugural liquidity mining incentives, and grants for eligible participants in the Settlers of Cantos testnet event.

Genesis Block

At genesis, 1B tokens were minted. The tokens will be distributed in the following manner:

• Contributors: 13.0%
• Settlers of Canto: 2%
• Future Grants: 5%
• Medium-Term Liquidity Mining: 35%
• Long-Term Liquidity Mining: 45%

Tokens not yet distributed (Grants and Future Liquidity Mining) will be kept in the community pool.

Liquidity Mining Incentives

In order to compensate LPs for providing capital to Canto’s zero LP fee DEX and to help distribute CANTO in a fair manner, a liquidity mining program will release tokens linearly per block to LP token holders. We ensure that there will be suitable liquidity at launch by partitioning the genesis block into two sets of liquidity mining incentives. The first block of tokens will provide incentives for LPs for the first six months after Canto launches and the second block will provide incentives for a longer term multi-year period. We make the incentives sufficiently large enough to ensure that liquidity is freely available for the vast majority of trading activity while accounting for high expected volatility in the initial phases of Canto’s launch.

Liquidity Mining Emissions

Medium-Term Liquidity Mining is expected to consist of six month-long epochs. The first epoch will start at launch and will distribute 5.83% of the token supply. The Canto DAO has onchain control over all liquidity mining schedules. As the first epoch concludes, the DAO may choose to pass a proposal to begin a second epoch.

Long-Term Liquidity Mining is expected to continue liquidity mining after the Medium-Term Liquidity Mining allocation is emitted. The Long-Term Liquidity Mining reserves may be emitted over the course of 10 years, or any other schedule the DAO chooses.

Staking Incentives

Canto aims to bootstrap network security through a policy of minimum viable issuance of new tokens to stakers. We achieve this objective initially by issuing a flat amount of tokens linearly per block to stakers in a manner similar to LM incentives. Canto’s high inflation allows market participants to effectively price the excess returns on liquidity mining relative to the expected impermanent loss. As Canto’s financial primitives become more liquid over time, we expect that this premium converges rapidly to its fair value as new information enters the market.

Security Emissions

Network security emissions will start around an inflation rate of 200M Canto per year for the first 30-day period, minting ~16m new CANTO tokens. The LM reward per block mined will be ~37 CANTO. Every subsequent period will face exponentially decaying security emissions.

Grants for Settlers of Canto

We are grateful to all those who have participated in the Settlers of Canto testnet event, and have decided to distribute 20M tokens to Settlers.

Filtering Criteria

In order to identify real, active Settlers, we subjected participants to a selection of examinations aimed to determine both the likelihood of them being a real human and becoming a Canto contributor. Settlers were scored and granted based on the following:

• Feedback: All feedback responses that were viewed relevant, coherent and original were counted.
• Chain Score: Wallet addresses that had activity across Ethereum and its L2s received higher scores. We accounted for transaction history across ETH, Polygon, Optimism, and Arbitrum. NFT ownership, ENS ownership and other signals were included. The greater the activity, the higher a Settler’s chain score.
• Twitter Score: We took metrics from the Twitter accounts of each Settler, such as the Twitter activity and followers, and issued a significant penalty for accounts focused on giveaway promotions and airdrops.
• Canto Score: Every address was assigned a Canto score based on the number of transactions an address made on the Canto Testnet, along with if they completed the Settler’s Goals (lending LP tokens in the Canto Lending Market, etc.)

At genesis, CANTO was directly sent to the eligible wallet addresses used to participate in Settlers of Canto. In total, 9364 Settlers were eligible to receive Canto from the event.

About Canto

Canto is a Layer 1 blockchain built to deliver on the promise of DeFi – that through a post-traditional financial movement, new systems will be made accessible, transparent, decentralized, and free. Created by a loosely organized collective of chain-native builders, Canto is a new commons powered by Free Public Infrastructure.