27 Jan 2023
Canto’s novel CSR is now live on the Cosmos ecosystem; and it might change things up
Everything you need to know about Contract Secured Revenue (CSR) from Canto
Over the week, Canto put a few proposals on-chain to enable Contract Secured Revenue (CSR), which was voted in favor and has since gone live yesterday.
Canto is an L1 platform built using tools provided by the Cosmos ecosystem to run on EVM, to support the DeFi movement and provide financial primitives such as a zero-fee DEX (Canto DEX), a pooled lending market (Canto Lending Market), and a stablecoin ($NOTE) as Free Public Infrastructure (FPI) to the public.
As the platform matures, more financial primitives may be added to it. Canto has made it their mission to become the best execution layer for original work by providing zero fees for Liquidity Providers and ensuring resistance of rent extraction.
Canto takes a decentralized approach with no official foundation, presale, vesting, or venture backers.
Governance of the platform is instead managed by Canto stakers, with the interest charged to stabilize the unit of account token being used to fund public goods. The objective of these steps is to create a healthy and robust DeFi ecosystem that allows all participants an opportunity to succeed without engaging in zero-sum games.
In line with the overarching vision behind the Free Public Infrastructure movement of Canto — to make sure core cryptoeconomic components are accessible to everyone for free — contributors of Canto recently proposed a Contract Secured Revenue (CSR) model, which offers a way for smart contract developers to be compensated for their work.
The Contract Secured Revenue (CSR) model is an opt-in fee splitting system that uses NFTs to represent the right to claim revenue from contracts.
To opt in, developers must deploy their contracts and register with the CSR Turnstile smart contract, after which they can choose to receive a new NFT or have the revenue accrue to an existing NFT.
Through this method — and since NFTs are composable — developers can take advantage of the value generated by their contracts, using it to distribute funds, gain access to liquidity, and reduce regulatory risk.
Using the CSR model with NFTs also allows developers to withdraw revenue from multiple contracts, trade tokens, wrap tokens, stake tokens, and more—in effect, creating a single, secure environment which upholds the network’s ethos while providing developers with a unique way to earn from their work.
Over the past month, Canto has increased from $0.06 to $0.38, which is a 6x since the lows at the start of the year — and we think that this is for good reason — and recently proven through the unique use of NFTs, which allows developers to earn yields from their work.
Apart from just generating actual revenue through transactions for developers, the use of this NFT model also allows for endless ways to replace traditional methods of incentivizing users to get onboard a dApp through the use of token incentives, which we’ve all seen is unsustainable in DeFi 1.0 and 2.0, and here are some examples:
- With tools like Canto Split, developers can essentially incentivize stakers to market their product with the goal of getting more transactions, in return for a percentage fee of the yields generated from transactions, instead of token incentives.
- Since a CSR NFT also has a modular input which allows for gathering of revenue from multiple contracts, this incentivizes developers to build DeFi products in the form of a “syndicate”, thus giving a more streamlined experience for users, where they know what to expect from multiple applications, instead of having to always learn a new UI/UX for every single application that solves a different niche in DeFi.
… and much more.
But for now, we’ll just be eyeing how the CSR model gets battle tested, and what are the top few contracts — with help from Plex Labs.
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