Yuval Rooz has a blunt message for the smart contract industry: if you claim to be the future plumbing of global finance, you better show cash flow.
“People have assigned a lot of value to these networks based on what they say they will become,” said Rooz, CEO of Digital Asset and co-founder of Canton Network. “But when you look at the actual volume of business they do, there’s a huge disconnect.”
The Canton Network is a privacy-friendly blockchain infrastructure that aims to connect financial institutions and their tokenized assets through interoperable and permissioned applications.
“The problem is not with a single chain. Many smart contract networks were designed for retail speculation and token trading, not regulated institutional financial workflows,” Rooz told CoinDesk in an interview.
“When you look at metrics like sustained economic throughput, recurring revenue, and actual asset activity, there is often a disconnect between valuation and actual financial usage. Building infrastructure for global institutions requires a very different design philosophy around privacy, compliance and interoperability,” he said.
Rooz, who worked at DRW and Citadel before founding Canton, said he is not anti-crypto. He made a distinction between assets like bitcoin that the market values as a store of value or digital gold, and smart contract platforms that promise to transform financial infrastructure.
“Gold and silver have value because the market assigns it to them,” according to Rooz. “Bitcoin is an asset class. But smart contract networks are shaping up to be the next set of financial rails. If that’s the case, then financial institutions should be using them at scale.”
According to him, most are not.
“If you’re processing very small amounts of value on your network, how does the market give you a valuation of $10 billion or $11 billion? he said, citing large-cap chains whose real financial throughput is limited. “At the end of the day, it’s a memecoin. It doesn’t solve the problem it claimed to solve.”
A speculative design flaw
Rooz argued that the discrepancy stems in part from token design. Many networks have copied bitcoin’s issuance model, minting tokens to reward validators, even though bitcoin is an asset secured by miners, not a programmable platform intended to host financial applications.
“Bitcoin is an asset class, not a platform,” he said. “The people who secure the asset class get paid. Everyone copied that model for smart contract chains, and it was a mistake.”
On many networks, newly issued tokens are primarily intended for validators, regardless of whether the chain generates significant economic activity. If usage is low, inflation dilutes holders while little value returns to the token.
In contrast, Rooz said Canton’s token is designed to reflect the monetary utility of the network itself. Each transaction burns tokens and there are no priority fees or upfront fees. If usage increases in dollar terms, more tokens leave circulation.
“If you believe the USD network utility will continue to increase, more tokens will be taken out of circulation and the price should increase,” he said.
Canton also features a “mint curve,” with new tokens issued at regular intervals. But these tokens are not just for validators. They are distributed to users and applications that generate fees on the network.
“Builders’ compensation should be based on merit,” Rooz said. “Can you bring in clients? Can you generate fees? That’s how you get paid.”
He cited Hyperliquide as an example of a model that resonates with investors: the trading platform generates revenue and uses it to redeem tokens. “When you do redemptions, the price goes up. It’s a much more compelling reason to hold a token,” he said.
In other words, value must flow.
Digital Asset, the company behind Canton, said in December that it had secured strategic investments from four major traditional financial players. Investors in the round included BNY, a financial services company overseeing $57 trillion in client assets, stock exchange operator Nasdaq, financial intelligence firm S&P Global and iCapital, a fintech company backed by BlackRock, Blackstone and JP Morgan.
Bloomberg recently began publishing data related to activity in Canton, and the Depository Trust & Clearing Corporation (DTCC), the industry-owned clearing and settlement market infrastructure, said in December that it had chosen the network as its tokenization partner, a sign of growing institutional traction.
TVL limits
Rooz is also skeptical of total value locked (TVL) as a primary metric.
“TVL is a very bad measure taken in isolation,” he said. “What matters is the use.”
Canton’s design emphasizes configurable privacy for institutional participants and, therefore, much of the network’s activity is not publicly broadcast. This makes traditional DeFi-style dashboards incomplete.
Because transactions can remain confidential, “we rely on participants to post information about what they are doing on-chain,” Rooz said.
Nonetheless, some data points emerge. Broadridge, a financial infrastructure provider, processes approximately $400 billion in Canton repo transactions daily, according to Rooz. Other projects on the network handle comparable volumes, he said.
The network now generates between $2.5 million and $3 million in daily fees, Rooz said, with ambitions to double that amount.
“If a company had bylaws stating that any profit it made would be used to repurchase shares and performance continued to increase, the stock price should rise,” Rooz said. “A decentralized network should be treated the same. Look at the revenue. Look at the growth.”
A review to come
The broader market, he said, is starting to apply this lens.
“When the market is good, money flows into memes and speculative tokens,” Rooz said. “When the market turns, investors become much more demanding.”
Many altcoins that presented themselves as smart contract platforms were gutted in recent downturns, he noted. Meanwhile, tokens tied to revenue-generating platforms performed better.
For Rooz, this signals a shift toward what he calls a “more rational economic structure.”
“Crypto has been defying the laws of gravity for some time,” he said. “But ultimately, gravity wins.”
Stablecoins and product-market fit
Even stablecoins, often hailed as crypto’s revolutionary use case, have not completely crossed the chasm according to Rooz.
“Stablecoins have not yet achieved product-market fit,” he said. “You can say stablecoins are product-market fit when more than 50% of their usage is non-crypto related.”
Today, he argued, much of the demand for stablecoins is driven by crypto trading and on-chain speculation. Real-world payments and non-crypto financial applications remain a minority of the business.
Canton’s strategy is to delve deeper into traditional finance, bringing real-world assets and collateral online. The network recently announced gold-related initiatives and plans additional non-crypto collateral integrations.
The goal is simple: go beyond crypto-native assets and integrate traditional financial workflows.
“If smart contract chains are the next set of financial rails, then financial companies should use them for financial applications,” Rooz said. “Adoption, activity and use; the value will follow. »
As for where Canton’s token price goes from here?
“If you’re looking for the token price, you’re looking for the wrong thing. Focus on utility. Focus on building real financial infrastructure.”
The rest, he suggests, is down to gravity.
Canton Coin (CC) was trading around $0.1538 at press time. The token is up around 2% year to date, outperforming broader crypto markets. The token currently has a market capitalization of around $6 billion.
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