Laura Shin hosts a heated debate between Yuval Ruse (co-founder and CEO of Digital Asset, creators of Canton), Alex Glukovsky (co-founder and CEO of Matter Labs), and Haseeb Qureshi (managing partner at Dragonfly Capital) about whether Canton qualifies as a legitimate blockchain.

The discussion centers on Canton's architecture, which uses 46 super validators who must apply for permission to join the network, and its UTXO-based model that provides privacy but lacks public verifiability. Canton has secured major institutional partnerships including JPMorgan's deposit token, DTCC integration, and deals with Broadridge for repo transactions worth nearly $400 billion.

The core technical dispute revolves around Canton's ability to prevent double-spending and enforce financial rules without trusted third parties - a fundamental property that Alex argues defines what makes a blockchain a blockchain, referencing the original Bitcoin A Peer-to-Peer Electronic Cash System white paper's solution to this problem.

Canton's Institutional Partnerships and Market Position

Canton has secured partnerships with JPMorgan for deposit tokens, DTCC, Broadridge for $400 billion in repo transactions, and recently announced deals with Mizuho, Nomura, and JPX for tokenized Japanese Government Bonds

Yuval argues the criticism stems from jealousy: 'We didn't do a pre-mine, we didn't publish white papers saying how we're going to change the world. We've just very quietly executed and now we're signing all of these deals' - Yuval

Digital Asset was founded by Yuval and Eric (who started Cumberland OTC trading desk) after leaving DRW, with DRW as an investor but not the controlling entity

The Blockchain Definition Debate

Alex challenges Canton's blockchain status: 'Canton is calling itself a public permissionless blockchain... I believe Canton is not really a blockchain' because it cannot enforce financial rules without trusted third parties

Drawing from Bitcoin A Peer-to-Peer Electronic Cash System, Alex argues blockchains must solve double-spend without relying on third parties, which Canton cannot do without issuer involvement

Yuval counters that Canton follows a UTXO model with 'decentralized composability' and can have both centralized issuers (for RWAs) and decentralized assets like CBTC

The fundamental disagreement: Alex claims Canton requires issuer signatures for every transaction, while Yuval insists it can operate with decentralized consensus for certain assets

Permissionless Claims and Super Validator Structure

Canton has 46 super validators who must apply and receive approval from existing validators, with Yuval claiming 'for the most part, all have been approved'

Yuval defends the model: 'Everybody can become an SV, assuming the network agrees with a super majority that they are an additional value add to the network'

Critics argue this creates a permission moment where 'validators are granting permission to whoever is applying' - Haseeb, unlike meeting objective requirements on other chains

Yuval counters that many chains including 'Stellar, Ripple, BNB' have similar validator structures but aren't criticized for being permissioned

Privacy vs Public Verifiability Trade-offs

Canton provides privacy through encrypted UTXOs where 'only if you are a party to a transaction, you could verify that transaction' - Yuval, admitting there's no public verifiability currently

Alex warns this creates systemic risk: if an issuer is compromised, 'the minted assets are going to propagate throughout the network without anyone being able to catch it'

Yuval promises 'very soon, you will see public verifiability on Canton as well' but argues current privacy is valuable for institutional use cases

The security model debate: Alex claims Canton depends on 'single hot server' signatures while Yuval argues multiple parties must agree to state transitions

MEV and Traditional Finance Comparisons

Don Wilson's criticism of MEV sparked controversy when he said it wasn't 'suitable for financial markets', leading to comparisons with TradFi practices

Yuval defends the position: 'I would love for anyone to give me in TradFi how you can reorder transactions once they hit a matching engine... once an order hit the matching engine based on price and time, you cannot reorder it'

He distinguishes payment for order flow from MEV: those who pay for order flow 'have to meet best execution, cannot reorder transactions' while MEV allows reordering based on mempool visibility

Token Economics and Incentive Accusations

Austin Campbell accused DRW of paying institutions to use Canton, which Yuval vehemently denies: 'There have been no payments... we haven't done any token deals, we haven't done any payment deals'

Yuval emphasizes no pre-allocation for early participants: they 'were just earning from the start' through network activity rather than token grants

He challenges critics to prove payment claims: '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'