Development Fund Proposal
Author: Varmeta
Status: Draft
Created: 2026-03-12
Abstract
Canton Stablecoin Studio is a platform for creating and managing stablecoins natively on Canton Network. It provides a common toolkit covering stablecoin creation, token operations, compliance, proof of reserve, fee management, and token settings - delivered as smart contracts, an SDK, and a web application.
Specification
1. Objective
Canton Network currently lacks a turnkey platform for stablecoin issuance. Institutions seeking to issue regulated stablecoins need compliant, privacy-preserving infrastructure that integrates with existing financial workflows. Canton Stablecoin Studio fills this gap by providing a complete toolkit for the stablecoin lifecycle - from creation and minting through compliance enforcement and reserve management.
2. Implementation Mechanics
2.1. System Architecture
graph TB
subgraph "ISSUER STUDIO PORTAL"
WEB["Web Application<br/>(React + Chakra UI)"]
end
subgraph "CANTON STABLECOIN SDK"
direction TB
API["Unified API<br/>StableCoin · Factory · Role<br/>Account · Hold · Fee · Network"]
BROWSER_ADAPTER["Browser Adapter<br/>dApp SDK + WebSocket"]
NODE_ADAPTER["Node.js Adapter<br/>Wallet SDK + gRPC"]
end
SC["DAML Smart Contracts"]
subgraph "CANTON NETWORK"
WALLET["Canton Wallet<br/>(CIP-0103)"]
PARTICIPANT["Participant Node"]
DOMAIN["Sync Domain"]
end
WEB --> API
API --> BROWSER_ADAPTER
API --> NODE_ADAPTER
BROWSER_ADAPTER -->|"CIP-0103"| WALLET
BROWSER_ADAPTER -->|"WebSocket"| PARTICIPANT
NODE_ADAPTER -->|"gRPC"| PARTICIPANT
WALLET --> PARTICIPANT
PARTICIPANT -->|"executes"| SC
PARTICIPANT --> DOMAIN
style WEB fill:#e3f2fd,stroke:#1565c0
style API fill:#fff3e0,stroke:#e65100
style BROWSER_ADAPTER fill:#fff3e0,stroke:#e65100
style NODE_ADAPTER fill:#fff3e0,stroke:#e65100
style SC fill:#e8f5e9,stroke:#2e7d32
style WALLET fill:#f3e5f5,stroke:#6a1b9a
style PARTICIPANT fill:#f3e5f5,stroke:#6a1b9a
style DOMAIN fill:#f3e5f5,stroke:#6a1b9a
2.2 Component Descriptions
- Issuer Studio Portal — Web application (React + Chakra UI) and CLI tool (Commander + Inquirer) for issuers to create, configure, and manage stablecoins. All operations go through the SDK.
- Canton Stablecoin SDK — TypeScript library providing a unified API for all stablecoin operations. Ships as two bundles: browser (dApp SDK + WebSocket) and Node.js (Wallet SDK + gRPC). Uses CQRS internally.
- DAML Smart Contracts — On-ledger business logic as DAML templates. Covers stablecoin lifecycle, role-based access, UTXO-like holdings (CIP-0056), reserves, on-ledger multi-sig, KYC, fees, and escrow holds.
- Canton Network — Infrastructure layer: Canton Wallet (key management + signing), Participant Node (DAML execution + Ledger API), and Sync Domain (ordering + privacy).
2.3 Interaction Flow
- Portal → SDK: The Web App and CLI call the SDK's unified API for all operations (create stablecoin, mint, burn, transfer, manage roles, etc.). Neither interface interacts with Canton directly.
- SDK → Canton Network (Browser path): The SDK's browser adapter sends commands to the Canton Wallet via CIP-0103 for signing, and subscribes to the Participant Node's JSON Ledger API over WebSocket for real-time ACS updates.
- SDK → Canton Network (Node.js path): The SDK's Node.js adapter connects directly to the Participant Node via Ledger API v2 gRPC, managing keys and submitting transactions without a wallet intermediary.
- Participant Node → DAML Contracts: The Participant Node receives commands, executes the corresponding DAML contract choices (e.g.,
CreateStableCoin, Mint, Transfer), and updates the Active Contract Set.
- Participant Node → Sync Domain: The Participant Node coordinates with the Sync Domain (sequencer + mediator) for transaction ordering, conflict detection, and cross-participant privacy.
3. Architectural Alignment
- Built natively on Canton using DAML smart contracts (no EVM/Solidity dependency)
- Compliant with CIP-0056 (Token Standard) and CIP-0103 (dApp-Wallet protocol)
- Leverages Canton's built-in privacy model and multi-party authorization
- Frontend-first architecture - no backend coordinator required
4. Backward Compatibility
No backward compatibility impact. This is a greenfield project with no dependencies on existing Canton applications or workflows.
Milestones and Deliverables
Milestone 1: Issuer MVP
- Estimated Delivery: Week 3
- Focus: Factory-based stablecoin creation, mint (cash-in), burn, wipe, transfer, escrow holds, multi-signature proposals, and supplier allowances - delivered as DAML smart contracts, TypeScript SDK, and React web application.
- Deliverables / Value Metrics: A stablecoin issuer can create a new stablecoin and perform all core token operations end-to-end through the web application. First working product demonstrating Canton's viability for institutional stablecoin issuance.
Milestone 2: Regulatory Readiness
- Estimated Delivery: Week 6
- Focus: On-ledger KYC with external provider integration, account freeze/unfreeze, token pause/unpause, 11-role access control, four proof-of-reserve modes (Internal, External, CrossChain, NoReserve) with staleness enforcement, and configurable fee schedules.
- Deliverables / Value Metrics: The platform meets the compliance and transparency requirements for regulated stablecoin issuance - KYC-gated operations, granular role-based permissions, verifiable reserves, and fee management. Ready for institutional adoption in regulated environments.
Milestone 3: Production Release
- Estimated Delivery: Week 8
- Focus: End-to-end test suite, API documentation, deployment guide, CIP-0056/CIP-0103 conformance verification, and internal security self-audit of all DAML smart contracts.
- Deliverables / Value Metrics: Production-ready platform with full test coverage, comprehensive documentation, verified standard compliance, and a security audit report covering access control correctness, reentrancy safety, and oracle manipulation resistance. Ready for go-live on Canton Network.
Acceptance Criteria
The Tech & Ops Committee will evaluate completion based on:
- Deliverables completed as specified for each milestone
- Demonstrated functionality or operational readiness
- Documentation and knowledge transfer provided
- Alignment with stated value metrics
Project-specific conditions:
- M1: Live demo of end-to-end stablecoin creation and all token operations via the web application; SDK functional for all operations; automated contract tests passing
- M2: KYC enforcement demonstrated on mint and transfer; freeze/pause controls verified; all 11 roles tested with correct permission boundaries; at least two reserve modes validated with staleness rejection; fee collection demonstrated on transfers
- M3: E2E test suite passing across isolated issuer environments; ≥90% line coverage on DAML smart contracts; API reference and deployment guide reviewed and accepted by the Tech & Ops Committee; CIP-0056 and CIP-0103 conformance verified; internal security self-audit report delivered covering access control, reentrancy, and oracle manipulation vectors
Funding
Total Funding Request: 120,000 CC
Payment Breakdown by Milestone
- Milestone 1 (Issuer MVP): 40,000 CC upon committee acceptance
- Milestone 2 (Regulatory Readiness): 60,000 CC upon committee acceptance
- Milestone 3 (Production Release): 20,000 CC upon final release and acceptance
Volatility Stipulation
If the project duration is greater than 6 months:
The grant is denominated in fixed Canton Coin and will require a re-evaluation at the 6-month mark.
If the project duration is under 6 months:
Should the project timeline extend beyond 6 months due to Committee-requested scope changes, any remaining milestones must be renegotiated to account for significant USD/CC price volatility.
Co-Marketing
Upon release, the implementing entity will collaborate with the Foundation on:
- Announcement coordination
- Technical blog post or case study on Canton stablecoin infrastructure
- Developer and ecosystem promotion through workshops or documentation showcases
Motivation
- Regulated stablecoin issuance is a foundational use case for any financial blockchain network
- Enables institutions to issue and manage compliant stablecoins without building custom infrastructure from scratch
- Attracts institutional issuers to Canton Network
- Demonstrates Canton's capabilities for production-grade financial infrastructure
- Establishes a reusable toolkit that accelerates future tokenization projects across the ecosystem
Rationale
- DAML-native approach - leverages Canton's built-in privacy model and multi-party authorization
- Frontend-first architecture (no backend coordinator) - reduces operational complexity and attack surface for issuers
- Abstract oracle interface for proof of reserve - supports all reserve models (internal, external, cross-chain) without requiring architecture changes
- Modular toolkit design - allows issuers to adopt only the capabilities they need, enabling reuse across different stablecoin use cases and regulatory regimes
