Canton Network CEO Slams Smart Contract Chains for Lacking Real Financial Utility

Yuval Rooz, CEO of Digital Asset and co-founder of the Canton Network, has issued a stark warning to the smart contract sector: if you claim to be the future of global finance, you’d better start showing real cash flow. In a recent interview with CoinDesk, Rooz criticized the disconnect between the valuations of many smart contract networks and their actual economic throughput, arguing that most are still designed for retail speculation rather than institutional financial workflows.

“The issue isn’t about any single chain,” Rooz explained. “Many smart contract networks were architected for retail speculation and token trading, not for regulated, institutional financial workflows. When you look at metrics like sustained economic throughput, recurring revenue, and real-world asset activity, there’s often a disconnect between valuation and actual financial usage.”

Rooz, who previously worked at DRW and Citadel before founding Canton, isn’t anti-crypto. He draws a clear distinction between assets like Bitcoin, which the market values as a store of value or digital gold, and smart contract platforms that promise to transform financial infrastructure.

“Bitcoin is an asset class,” he said. “Gold and silver have value because the market assigns it to them. But smart contract networks pitch themselves as the next set of financial rails. If that’s the pitch, then financial institutions should be using them at scale. And in my view, most aren’t.”

The gap, Rooz argues, stems partly from token design. Many networks copied Bitcoin’s issuance model, minting tokens to reward validators even though Bitcoin is an asset secured by miners, not a programmable platform meant to host financial applications.

“Bitcoin is an asset class, not a platform,” Rooz emphasized. “People who secure the asset class get paid. Everyone copied that model for smart contract chains, and that was a mistake.”

On many networks, newly minted tokens flow primarily to validators regardless of whether the chain is generating meaningful economic activity. If usage is thin, inflation dilutes holders while little value accrues back to the token. By contrast, Canton’s token is designed to reflect the dollar utility of the network itself. Every transaction burns tokens, and there are no priority or front-running fees. If usage grows in dollar terms, more tokens leave circulation.

“If you believe the USD utility of the network will continue to increase, more tokens will go out of circulation and the price should go up,” Rooz explained.

Canton also features a “mint curve,” with new tokens issued at regular intervals. But those tokens aren’t reserved only for validators. They’re distributed to users and applications that generate fees on the network.

“Compensating builders should be merit-based,” Rooz said. “Can you bring customers? Can you generate fees? That’s how you get paid.”

He pointed to Hyperliquid as an example of a model that resonates with investors: the trading platform generates revenue and uses it to buy back tokens.

“When you do buybacks, price goes up. That’s a much more convincing reason to hold a token,” he said. “In other words, value must flow.”

Digital Asset, the company behind Canton, has secured strategic investments from major traditional financial players including BNY (which oversees $57 trillion in client assets), Nasdaq, S&P Global, and iCapital. Bloomberg has begun publishing data related to activity on Canton, and the Depository Trust & Clearing Corporation (DTCC), the industry-owned clearing and settlement market infrastructure, has selected the network as its tokenization partner.

Rooz is equally skeptical of total value locked (TVL) as a headline metric. “TVL is a very bad metric in isolation,” he said. “What matters is usage.”

Because Canton’s design emphasizes configurable privacy for institutional participants, much of the network activity isn’t publicly broadcast. That makes traditional DeFi-style dashboards incomplete. Broadridge, a financial infrastructure provider, processes roughly $400 billion in repo transactions daily on Canton, according to Rooz. Other projects on the network handle comparable volumes. The network is now generating between $2.5 million and $3 million in daily fees, with ambitions to double that.

“If a company had bylaws saying any profit it makes will be used to buy back stock, and performance keeps going up, the share price should go up,” Rooz said. “A decentralized network should be treated the same way. Look at revenue. Look at growth.”

The broader market, he said, is starting to apply that lens. “When the market is good, money flows into memes and speculative tokens. When the market turns, investors get much more demanding.”

Many altcoins that marketed themselves as smart contract platforms have been eviscerated during recent downturns, he noted. Meanwhile, tokens tied to revenue-generating platforms have fared better. For Rooz, this signals a shift toward what he calls a more “rational economic structure.”

“Crypto has defied the laws of gravity for some time,” he said. “But eventually gravity wins.”

Even stablecoins, often hailed as crypto’s breakout use case, haven’t fully crossed the chasm in Rooz’s view. “Stablecoins haven’t hit product-market fit yet,” he said. “You can say stablecoins have product-market fit when more than 50% of usage is not crypto-related.”

Today, he argued, much of stablecoin demand is driven by crypto trading and onchain speculation. Real-world payments and non-crypto financial applications remain a minority of activity.

Canton’s strategy is to push deeper into traditional finance, bringing real-world assets and collateral onchain. The network recently announced gold-related initiatives and plans additional non-crypto collateral integrations.

“If smart contract chains are the next set of financial rails, then financial companies should be using them for financial applications,” Rooz said. “Uptake, activity and usage; the value will follow.”

As for where Canton’s token price goes from here? “If you’re chasing token price, you’re chasing the wrong thing. Focus on utility. Focus on building real financial infrastructure.” The rest, he suggested, is gravity.

Canton coin (CC) was trading around $0.1538 at publication time. The token has risen about 2% year-to-date, outperforming wider crypto markets. The token currently has a market cap of roughly $6 billion.

Tags: Canton Network, Yuval Rooz, Digital Asset, smart contracts, blockchain, institutional finance, tokenization, TVL, stablecoins, crypto valuation, financial infrastructure, DTCC, Broadridge, Hyperliquid

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