Lesson 6: Canton Network

Captions as YouTube publishes them, usually machine-generated, so names such as Daml and Canton can be misheard.

1. 0:03

   just like with any other technology the value of DL apps is Amplified once the apps start being composed when we talk about composing DL apps what we mean is utilizing on Ledger workflows from one app in on Ledger workflows of another app in this lesson we are going to introduce the global synchronizer as the default choice of synchronizer for composed daps we're also going to explain the alternatives to composing daps on the

2. 0:34

   global synchronizer and considerations for choosing the right synchronizer for your app finally we're going to introduce Canton Network one of the use cases for DL apps is tokenization of real world assets which involves representing financial and other assets such as stocks bonds fund shares or cash as smart contracts or tokens on a distributed Ledger as an example of daml app composition let's consider a fund tokenization app which

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   provides registry service for tokenized shares of a fund and allows transfer of fund share tokens from one app user to another let's also consider a cash registry app that provides safekeeping and transfer services for tokenized cash finally let's consider a trading app that implements delivery versus payment or DVP workflow this workflow provides Aon Atomic settlement for trades in fund shares where the buyer purchases fund shares from the seller and exchange for

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   cash the trading app is composed with the fund tokenization and the tokenized cash registry apps it uses the capabilities of fund tokenization and the tokenized cash registry apps to represent fund shares in cash as tokens and to transfer the ownership of these tokens from one app user to another all three apps are sovereign each app is operated by its own app provider the implementation of a DVP workflow in daml by composing two

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   registry apps was discussed in lesson titled Canton multi-domain applications of the DL applications design and architecture course in the Deo philosophy certification path to refresh the implementation details you may want to review that lesson a DVP transaction where the ownership of fund share token and cash tokens is automically swapped between the buyer and the seller involves five parties the buyer and the cash app

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   provider as co- signatories of the cash holding contract the seller and the fund registry app provider as co-signatories of the fund shares holding contract the trading app provider as the signatory of the DVP contract to process the DVP transaction we need a synchronizer that the the participant nodes of all five parties are connected to the global synchronizer serves this exact purpose it provides the default infrastructure for composing

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   DL apps it is publicly available for use by any DL application it is accessible by any app provider or app user it allows execution of transactions that span multiple apps the global synchronizer is a decentralized synchronizer oper operated by super validators organizations that independently operate the validator and the synchronizer nodes providing the global synchronizer infrastructure the

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   global synchronizer Foundation under the offices of the Linux Foundation facilitates governance of the global synchronizer through transparency and member engagement in the decisions made by super validators the global synchronizer is highly trustworthy due to its high availability and decentralization with a Byzantine fault tolerant consensus mechanism while the global synchronizer is particularly convenient for composed to deml apps it can also be used as primary synchronizer

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   for any deml app the transactions synchronized on the global synchronizer consume traffic credits which can be purchased using Canton coin a utility token used for payments transfers and incentives traffic credits on the global synchronizer can be purchased by by anybody for anybody when choosing a synchronizer for a DL app the app provider has three options the global synchronizer a private synchronizer operated by the app provider a private synchronizer operated

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    by a third party such as another app provider these options are not mutually exclusive DL apps can be designed to synchronize some transactions on one synchronizer and others on another for example transactions that facilitate workflow composition with other apps could be synchronized on the global synchronizer and other transactions for example the ones that are not dependent on other apps could be synchronized on a private synchronizer the choice of a

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    synchronizer also doesn't have to be permanent it's always possible to start with one synchronizer and then migrate to another the considerations for choosing the synchronizer are summarized in the table in all DL apps the app provider and users must trust the operator of the synchronizer for the availability of their ledger to process transactions which is why in the previous lessons that focused on a single DL app the default assumption was that the app provider operates the

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    synchronizer this gives the app provider full control over this piece of the critical infrastructure required to run the app in the case of the global syn synchronizer the app provider does not have control over this infrastructure however the global synchronizer is highly trustworthy thanks to its decentralized nature and its tokenomics that incentivize the super validators to

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    provide a reliable service in the case of an app using a private synchronizer operated by a third party the app provider delegates control over critical infrastructure to the third party this is likely to be a viable option only when there's a close relationship between the app provider and the synchronizer operator that ensures the alignment of incentives for example when the app provider is a subsidiary of the synchronizer operator or when the

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    synchronizer operator is a Consortium and the app providers are the members of the Consortium the next consideration is app composability it's easier to compose apps on the global synchronizer because it's Global trustworthy and public when multiple apps compose workflows on the global synchronizer the stakeholder Canton participant nodes have only one synchronizer to connect to as opposed to having to connect to multiple private synchronizers with private synchronizers

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    app composability is limited by each synchronizer operator who needs to allow stakeholder participant nodes to connect to the synchronizer on the global synchronizer apps can be composed freely without restrictions a private synchronizer is recommended for apps that require High through put or low latency latency of synchronizing a transaction is generally higher on the global synchronizer due to its decentralized nature and Byzantine

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    fault tolerant transaction synchronization mechanism the last consideration is cost the global synchronizer eliminates the cost of operating a private synchronizer however for transactions synchronized on the global synchronizer there's a per transaction fee depending on the volume of transactions it may be more coste effective to use the global synchronizer for all or part of the workflows of your app or it may be more cost effective to

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    operate your own synchronizer for apps with high transaction volume a private synchronizer is likely to be more coste effective so far in this course we focused on the topology of a single daml app which runs on Canton infrastructure with a single synchronizer typically operated by the app provider organization the collection of all Canton infrastructure deployments is referred to as the Canton Network the individual Canton infrastructure deployment on which a daml app runs is a

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    subnet of the overall Canton Network it consists of the set of participant nodes and the synchronizer used used by these participant nodes for committing transactions that Advance the apps workflows the element that distinguishes one Canton subnet from another is the synchronizer which is why we sometimes use the terms Canton subnet and synchronizer interchangeably however it is the participant nodes that make up the Canton Network participant nodes

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    connecting to multiple synchronizers provide the connection between Canton subnets and enable composition of DL Ops synchronizers are independent of each other and never talk directly to one another daml app providers and app users operate their Canton participant nodes where they deploy daml apps multiple apps can be deployed on the same node the nodes store private app data for the damel parties hosted on the Node and provide a way of communicating with synchronization infrastructure which

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    ensures that this private app data is in realtime sync with the app data on other participant nodes the participant nodes connect to private synchronizers and or the global synchronizer since private synchronizers are typically operated by app providers we often synonymize synchronizers and DL apps although such synonymization is not fully accurate as a single synchronizer can be used by multiple apps and a single app can use multiple synchronizers for example consider a

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    financing app developed by a bank where the bank is the app provider that operates a private synchronizer the app has the network of app users issuers investors and service providers we can say that by operating this private synchronizer the bank is running the financing app the global synchronizer facilitates composability of daml apps by providing default infrastructure to synchronize transactions that span multiple daml applications with daml Canton and the

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    global synchronizer Atomic transactions can be executed across multiple apps without making tradeoffs around trust relying on an intermediary or sacrificing privacy the global synchronizer comes with a range of network utilities that participants can run on their notes and which facilitate composability of daml apps on the Canton Network the Canton network was laun launched by the industry to create a global open network like the internet

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    adding guarantees of consistency and synchronization to unlock the potential of synchronized Finance it provides native interoperability for DL apps and allows to connect siloed infrastructure and create sophisticated composed workflows across organizational boundaries while preserving privacy and control