Stan

“Help Opus escape from prison.» 🖖

𝗖𝗮𝗻𝘁𝗼𝗻 𝗗𝗮𝗺𝗹 𝗪𝗼𝗿𝗸𝗳𝗹𝗼𝘄𝘀 - 𝟭. 𝗗𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀, 𝗔𝗰𝘁𝗼𝗿𝘀 𝗮𝗻𝗱 𝗔𝘂𝘁𝗵𝗼𝗿𝗶𝘁𝘆 One of the 𝗰𝗼𝗿𝗲 𝗶𝗱𝗲𝗮𝘀 𝗯𝗲𝗵𝗶𝗻𝗱 𝗗𝗮𝗺𝗹 𝘄𝗼𝗿𝗸𝗳𝗹𝗼𝘄𝘀 is that multi-party applications are not just about data and state, but about people, decisions and consequences. In a centralized system, many of these details can stay hidden inside one organization, because the same system usually controls the process, validates the decision and applies the result. In a distributed workflow, this is no longer enough, because decisions can cross several organizations, roles and trust boundaries, while still needing to remain coordinated, verified and authorized. This means that design of distributed application needs to answer several basic questions very clearly:   • what was the decision?  • who made it?  • what role they had?  • who authorized them to make it?  • what consequences followed from it?  • who was informed about those consequences?  • who needed to be notified afterwards? In Daml, this logic is represented through contracts, choices and parties, where a decision becomes a choice exercised on an active contract, the party making that decision is represented as a controller, and authorization is tied to the parties and roles defined on the contract. This makes workflow design in @CantonNetwork not only about modelling assets or records, but also about modelling the real structure of authority between organizations.

Gold remains the dominant asset in the tokenized commodities sector, with @tether and @Paxos controlling most of the market and splitting it almost evenly between them. Data from @RWA_xyz

Remember the name of our "hero" - Markéta Gregorová from Pirate Party, Czech Republic

“These companies - @AnthropicAI and @OpenAI - they encourage waste” 100%

It feels like tokenization is everywhere in the news feed. But how is it actually being built? Practically speaking, there are two main infrastructure paths available for tokenized assets. 1) The first is public, permissionless blockchains, primarily EVM-compatible networks. Ethereum remains the clear leader in this space. However, it has also faced some challenges in its evolution, especially considering the major issues with L2 as a scaling strategy. 2) The second is a fully permissioned ecosystem designed for institutional financial markets and confidential coordination between participants. Here, the number and quality of participants in the infrastructure layer are strictly controlled. There is a fair amount of rational thinking behind this - why build critical financial capabilities on fully public infrastructure that is not directly governed by the institutions relying on it, especially considering the extremely high rate of attacks on smart contracts and RPCs, as well as Solidity constraints, even if EVM world offers certain privacy features (e.g., ZKsync ones)? Why not make privacy, access control and regulatory compatibility core properties of the network from the start, while preserving interoperability with the outside world, including the EVM ecosystem? The rising star here is the @CantonNetwork. To be fair, it is not the first one - there are similar projects like Hedera or Ripple available on the market - but Canton has received unprecedented support and attention from major financial institutions. While this blockchain is still relatively unknown outside institutional circles, it takes a different approach to smart contract design (based on the DAML language), data privacy and token economics. Let’s explore the philosophy behind Canton, it should be interesting. Firstly, I want to highlight Canton's key features of distributed ledger and DAML design.

As the U.S. GENIUS Act highlights, stablecoins are often grouped together even though they use very different methods to maintain their value. Although all are called stablecoins, their risks differ significantly. USDT holders rely mainly on the issuer and reserves, DAI holders rely on smart contracts and collateral management, and USDe holders rely on hedging strategies. Regulators classify stablecoins according to distinct risk profiles rather than treating them as a single category:  𝟭. 𝗙𝗶𝗮𝘁-𝗯𝗮𝗰𝗸𝗲𝗱 𝘀𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻𝘀 such as USDT and USDC are backed by reserves like cash and U.S. Treasury bills. The GENIUS Act mainly focuses on this category through reserve, disclosure, and oversight requirements. These stablecoins can be regulated using familiar financial-sector tools such as reserve audits, licensing requirements, disclosure obligations, and redemption standards. Frameworks like the GENIUS Act in the United States and MiCA in the European Union are largely designed around this model.  𝟮. 𝗖𝗼𝗺𝗺𝗼𝗱𝗶𝘁𝘆-𝗯𝗮𝗰𝗸𝗲𝗱 𝘀𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻𝘀 are backed by assets such as gold and represent ownership of a real-world asset held by a custodian. They require oversight of the underlying assets, custody arrangements, redemption rights, and verification that the represented assets actually exist and remain accessible to holders.  𝟯. 𝗖𝗿𝘆𝗽𝘁𝗼-𝗰𝗼𝗹𝗹𝗮𝘁𝗲𝗿𝗮𝗹𝗶𝘇𝗲𝗱 𝘀𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻𝘀 use cryptocurrencies as collateral and are typically overcollateralized to account for price volatility. DAI is a leading example. These stablecoins introduce risks related to smart contracts, collateral volatility, liquidation mechanisms, and protocol governance. Regulators may therefore focus on operational resilience and risk-management frameworks in addition to collateral quality.  𝟰. 𝗔𝗹𝗴𝗼𝗿𝗶𝘁𝗵𝗺𝗶𝗰 𝘀𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻𝘀 rely on supply-and-demand mechanisms rather than full reserves. The collapse of TerraUSD showed the risks of this model. These stablecoins present unique challenges because their stability depends primarily on market incentives and protocol design rather than fully reserved assets. The failure of TerraUSD demonstrated how quickly confidence can collapse when these mechanisms break down.  𝟱. 𝗛𝘆𝗯𝗿𝗶𝗱 𝘀𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻𝘀 such as USDe combine collateral with hedging strategies to support price stability. They combine elements of multiple models and may depend on collateral management, derivatives positions, and hedging strategies. Their risk profile requires regulators to evaluate both asset backing and the effectiveness of the stabilization mechanisms. As stablecoins evolve, it is important to understand both (a) the asset or value the stablecoin is pegged to and (b) the mechanism it uses to maintain that peg.

One of the most common mistakes in discussions about stablecoins is focusing on the technology before understanding the problem that it is trying to solve. For all the advances in technology over the past several decades, moving money across borders remains surprisingly inefficient. International payments often rely on multiple intermediaries, settlement can take several days, fees can be significant, transparency is limited, and access depends on banking infrastructure that was designed long before the internet became the foundation of global commerce (this was exactly how I discovered USDT myself 😎 ). This issue is noticeable compared to how information moves today, almost instantly and globally with very little friction. Money, however, still largely depends on systems built around banks, correspondent banking relationships, business hours and jurisdictional boundaries. Stablecoins emerged as an attempt to address this gap by combining the stability of traditional currencies with a digital infrastructure that allows value to move more efficiently. And they are not trying to replace existing currencies. The most successful stablecoins are denominated in the same currencies that already dominate the global financial system, primarily U.S. dollar and Euro. Their value is not in creating a new unit of account, but in creating a different way for that unit of account to move through the digital economy with low fees, global coverage and instant execution. This distinction helps explain why stablecoins have succeeded where many other blockchain applications did not achieve meaningful adoption. Rather than asking users to accept an entirely new monetary system, stablecoins allow them to continue using familiar currencies while benefiting from a different settlement infrastructure. Stablecoin transaction volumes have grown rapidly. According to Visa's on-chain analytics, stablecoins processed more than $24.4 trillion in transaction volume since 2019. The total stablecoin marketcap has also grown to more than $160 billion, while major issuers such as @tether and @circle now serve tens of millions of users globally. Business adoption continues to increase, and nearly every major financial institution, including J.P. Morgan, PayPal, Visa, Mastercard, etc, is now exploring or actively developing stablecoin-related initiatives. Stablecoins are often discussed as a separate category within digital assets, while in reality they are the first successful example of tokenization at scale. For major ones, like USDT and USDC, every token represents a claim on an underlying asset held outside the blockchain. In other words, stablecoins demonstrated that tokenized representations of real-world assets could attract users, liquidity and global adoption. But the whole tokenization ecosystem is much broader than stablecoins, as we will see in the next parts of this series.

.@tether's recent win in Georgia highlights an interesting trend: 𝘀𝗺𝗮𝗹𝗹𝗲𝗿 𝗻𝗮𝘁𝗶𝗼𝗻𝘀 𝗺𝗮𝘆 𝗯𝗲 𝗯𝗲𝘁𝘁𝗲𝗿 𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻𝗲𝗱 𝘁𝗵𝗮𝗻 𝗺𝗮𝗷𝗼𝗿 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗲𝘀 𝘁𝗼 𝗹𝗮𝘂𝗻𝗰𝗵 𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝘀𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻𝘀. The announcement of GEL₮, a stablecoin backed by the Georgian lari and developed in partnership with Tether, shows how countries can leverage existing private-sector infrastructure instead of spending years building a central bank digital currency from scratch. When national stablecoins are discussed, most attention goes to the United States, EU, China, UK and Russia. Yet speed is an advantage that smaller countries often have over larger economies. They often face fewer layers of coordination, allowing them to move faster, create regulatory frameworks, partner with technology providers, and bring products to market more quickly. Many are also eager to 𝗰𝗮𝗽𝘁𝘂𝗿𝗲 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀 𝗶𝗻 𝗲𝗺𝗲𝗿𝗴𝗶𝗻𝗴 𝘀𝗲𝗰𝘁𝗼𝗿𝘀 𝗮𝘀 𝗮 𝘄𝗮𝘆 𝘁𝗼 𝘀𝘁𝗿𝗲𝗻𝗴𝘁𝗵𝗲𝗻 𝘁𝗵𝗲𝗶𝗿 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀 𝗮𝗻𝗱 𝗿𝗲𝗹𝗲𝘃𝗮𝗻𝗰𝗲 𝗶𝗻 𝘁𝗵𝗲 𝗴𝗹𝗼𝗯𝗮𝗹 𝗲𝗰𝗼𝗻𝗼𝗺𝘆, especially when positioned between larger economic powers. Looking beyond payments, national stablecoins represent much more than a digital version of a local currency. They are:  - a way to make a national currency accessible within the global digital economy  - can reduce the cost and friction of cross-border payments  - can support international trade  - can become a foundation for entirely new financial services For that reason, I believe the next few years will not only be about competition between USDT, USDC and other major stablecoins. We are also likely to see competition between jurisdictions seeking to become the most attractive home for digital representations of national currencies. That is why I have decided to start a series focused on stablecoins, tokenization, as well as the overall growing intersection between digital assets and AI. I invite you to join me as I explore this space, starting with the fundamentals, moving toward more advanced topics such as tokenization mechanics and beyond. As always, the focus will be on practical aspects rather than abstract discussions.