Canton Coin: How should we view FDV?

Author: Canton Network

Many people see the issuance curve of Canton Coin (CC) and often assume its maximum supply is fixed at 100 billion coins. However, this is a misconception. This article will explain this issue in detail.

Dynamic Supply, Not Fixed Cap

The supply mechanism of Canton Coin (CC) is very similar to Ethereum’s ETH or Solana’s SOL: theoretically unlimited, but practically quite stable.

Canton Coin (CC) has no hard cap on issuance, but each transaction burns CC tokens, offsetting the newly issued tokens. Over time, the forces of issuance and burning will reach a balance influenced by network activity and market prices.

This means that as the burn rate increases with usage, the total supply will stabilize at a level well below the theoretical issuance curve.

FDV and Market Cap

For Canton Coin, FDV and market cap are essentially the same:

FDV = Market Cap = Current Total Supply × Current Market Price

Future supply depends on the ratio of burning to issuance, which is influenced by network demand.

In the short term, CC inflation rate will be higher than Ethereum or Solana, but as the issuance rate halves and burning increases, inflation will steadily decline.

How Supply Is Adjusted

Canton fees are priced in USD (per MB of transaction data), but CC tokens are burned on-chain based on the exchange rate at the time of payment.

When network demand is high (i.e., CC price is relatively low compared to usage), the amount of CC burned increases, slowing supply growth or even causing deflation.

When network activity is low, burning slows down, and supply increases.

This dynamic mechanism creates a natural Burn-Mint Equilibrium (BME), a feedback loop among usage, price, and supply.

Long-term Equilibrium

Once the market reaches equilibrium under BME, issuance and burning will roughly balance.

At that point, total supply should remain relatively stable and adjust slowly based on long-term demand.

Because supply adjusts dynamically, market cap (rather than the theoretical maximum supply) is the proper measure of value.

Example Illustration

Scenario: Network reaches equilibrium between validators and application pools

Assumption: All tokens allocated to validators and applications are burned within a block

Super Validators (SV) are the sole source of inflation

If equilibrium is reached by mid-2026, the total supply might look like this:

Projected Total Supply

July 2026: < 42 billion CC

July 2029: < 48 billion CC

July 2034: < 50 billion CC

These estimates may be somewhat high. Over 1 billion CC tokens have already been burned, and the network burns tokens worth about $900,000 daily.

In this scenario, if SV is the only issuance source, the annual inflation rate is approximately 32.5 million CC, or less than 0.1% based on a 40 billion CC total.

Key Issuance Milestones

The most significant upcoming event in Canton’s dynamic supply is the halving on January 1, 2026, which will double halving the tokens for Super Validators (SV).

First, the total issuance per block will be halved.

Second, since more rewards will be allocated to validators and applications, the SV share of the issuance will decrease from 48% to 20%.

Three years later, a similar “double halving” will occur again:

Total issuance will halve once more, and SV’s share will decrease from 20% to 10%.

This cumulative effect means that once the network reaches a Burn-Create Balance (BME) between validators and applications, the SV pool will become a primary and rapidly shrinking new issuance source.

By the early 2030s, SV issuance will constitute only a small fraction of the total supply, making Canton Coin’s inflation rate one of the lowest among mainstream Layer 1 networks.

Conclusion

Like any resilient network, value increases with utility. Through the fee consumption mechanism, each transaction promotes resource scarcity and consistency. The Canton ecosystem vividly demonstrates this dynamic process.