19 June 2024

Canto rallies 13% following plans to migrate to Ethereum as layer2 network

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Canto, a Cosmos-based layer1 network, plans to migrate to Ethereum (ETH) and become a layer-2 network.

Following the news, the CANTO token jumped by nearly 13% to $0.1285 as of press time, according to CryptoSlate’s data.

Canto to build on Polygon.

Canto core developers will build a zero-knowledge rollup on Ethereum Layer-2 using the Polygon (MATIC) Chain Development Kit. Polygon Labs says Canto can tap “the liquidity of a unified Polygon ecosystem with easy access to Ethereum.”

“By joining a growing number of chains that extends blockspace, the move reflects a significant step toward a “neofinance” future, or the protocolization of existing finance,” Polygon added.

Polygon co-founder Sandeep Nailwal expressed delight with the move, noting that Canto’s migration would “turbocharge the neofinance revolution.” He added:

“The focus of a ZK-migrated Canto L2 is neofinance – bringing off-chain assets onto crypto rails. But to do this, the Canto community needs to be able to tap Ethereum’s liquidity in a trustless and secure way, without compromise. A Canto L2 will feature a trustless ZK bridge to Ethereum, out-of-the-box.

At the same time, Canto retains its L1 sovereignty, even as the community scales its core ethos of liquidity as a public good.”

Other networks, including Astar, Palm, IDEX, and Gnosis Pay, have made similar moves to build ZK rollups on Ethereum’s second layer using Polygon CDK. Nailwal stated, “the plan is for all CDK-powered chains to be interconnected and interoperable, with access to the shared liquidity of all other chains.”

Layer2 networks specialization

The migration of several layer-1 networks to Ethereum’s second layer is concurrent with the maturation of the layer-2 ecosystem. New specialized networks are emerging in response to these developments.

Blockchain analytical firm IntoTheBlock reported that major layer-2 networks are experiencing growth in distinct domains.

Optimism (OP), for instance, is carving a niche for itself as a superchain. Many networks are adopting the OP stack for their layer-2 solutions. Meanwhile, Polygon and Arbitrum (ARB) actively support scaling solutions through their respective technologies.

In decentralized finance (DeFi), Arbitrum stands out as a dominant force, boasting the highest liquidity and total value locked (TVL) among all layer-2 networks. Coinbase Layer-2 Base has also demonstrated significant transaction volume and a growing user base, positioning it as an attractive option for decentralized social applications.

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