The amount of funds locked in the DeFi ecosystem Canto, built on Cosmos, has more than doubled since the start of January.
The aggregate TVL of projects for the month rose 121%—from $66 million to about $146 million.
The spike came shortly after Variant Fund invested an undisclosed amount of funds in Canto. Its share of the Cosmos ecosystem’s total TVL now trails only Cronos, Kava, and Osmosis.
The possible reason for the success lies in the project’s incentive framework for liquidity providers and lenders.
The trading volume on the ecosystem’s leading exchange—Canto DEX—rose in January from under $2 million to $58 million, according to CoinGecko.
During the same period, the total value transferred through cross-chain bridges from Ethereum to Canto increased by $77 million.
Since the start of 2023, the price of the CANTO token has risen by almost 400%—from around $0.08 to around $0.38.
Despite the impressive current metrics, The Block researcher Kevin Peng expressed doubts about the project’s long-term sustainability due to high inflation. In his view, since September the circulating supply of the Canto utility token has grown by 158%. Back in autumn last year, Cosmos developers published a white paper outlining new functionality for the project’s ecosystem.