Canton Strategic Holdings Issues Statement on MEV and Onchain Transaction Front-Running

Mark Wendland, Chairman and CEO of Canton Strategic Holdings

“Issuers and market participants deserve an onchain market structure that prevents front-running and protects users from hidden costs. When transacting on a chain that permits MEV, the true trading costs are paid by users who receive subpar execution. Meanwhile, 'tips' paid to validators on those networks secure preferential treatment, effectively skipping the line and executing certain orders before everyone else. As Yuval Rooz, CEO of Digital Asset, recently shared, front-running is not the same as payment for order flow. One is underpinned by robust regulation through best execution requirements and associating filings, and the other is simply not compatible with regulated markets. Importantly, the Canton Network is designed to prohibit MEV both in structure and practice. Privacy ensures that orders are not universally visible, and there are no tips or payments to validators that could influence the ordering of transactions. As we speak, decisions are being made by institutions and regulators that will shape onchain markets well into the future. Issuers are determining which tokenized stock venue – and by extension, which blockchain – they may permit their stock to trade on in tokenized form. Firms are evaluating which network can balance cost, speed, and compliance. And regulators in Europe, the U.K., and elsewhere are shaping perspectives on trading practices for this new digital infrastructure. A healthy onchain market takes lessons from the past and ensures that front-running in the form of MEV does not exist. As tokenization moves from ideation to operation, the stakes could not be higher.”