The State of Tokenization: Locked Capital.

A co-authored piece by Cashen Labs and Hecto Inc.

Capital Commitment on Canton

Most tokenization conversations are about assets. Which ones come on-chain, how they're represented, who can trade them. This piece is about something quieter that turns out to matter just as much. It's about commitment, and what happens when a network decides that commitment has to be held in capital. On Canton Network, it does. Network privileges are tied to locked CC. A Featured App has to keep CC locked continuously to hold its status. A Super Validator has to lock CC to earn forward governance weight. Status isn't granted once and forgotten. It's contingent on capital, held over time, and verifiable on-chain. That makes Canton one of the few places where network governance and capital markets meet directly. And wherever a rule creates a requirement to hold capital, a market forms around meeting it. Cashen has built that market. It's the Canton Coin locking marketplace, a bilateral venue where Featured Apps and Super Validators source locked CC from institutional holders. Hecto builds for a different kind of locked capital entirely. The value sitting inside private companies that the public can't reach. Two very different problems but one shared theme. Capital that is locked is not the same as capital that is useless, as long as someone builds the right structure around it.

The Problem

Two Canton governance proposals set the requirement. CIP-116 requires Featured Apps to hold locked CC continuously: 5,000,000 CC per non-issuer PartyID, or 25,000,000 per asset issuer PartyID. CIP-105 does the same for Super Validators, who need a percentage of their aggregate lifetime rewards locked to earn forward weight, on a tier schedule that tightens every year. The rules are sensible. Locking aligns the network's most privileged participants with its long-term health. But the entities that need the lock are rarely the entities holding idle CC. An app told it needs 5M or 25M CC locked has three options. It can immobilize its own balance sheet, tying up capital it would rather spend building. It can borrow, and take on credit exposure to do it. Or it can delegate, and have someone who already holds CC commit it on the app's behalf. Delegation is clearly the efficient answer. Until Cashen, nobody was running a market for it. Sourcing the lock had become the longest step in becoming a Featured App, and the only one that could, in principle, be solved in an afternoon.

What Cashen Built

Cashen runs locking as a service. An app or validator gets the lock its network status requires without funding it from its own balance sheet. An institutional holder earns a fixed fee on CC it already owns, and keeps custody the entire time.Every deal is bilateral and fixed at origination on five terms:

• the amount of CC
• a fixed APR
• a minimum lock period
• recall notice terms
• a breach rate if a recall goes unresolved

Interest accrues continuously and settles monthly. The terms are agreed once and recorded, with no floating rates and no pool dynamics. Substitution provisions let a supplier exit a deal without breaking the counterparty's lock, which matters more than it sounds. Losing a lock unexpectedly puts a Featured App's status at risk, and substitution only protects you if there's someone to substitute to. Supplier depth is the real product. Structurally, Cashen is closer to an OTC credit desk than a DeFi protocol. Nothing is pooled. Nothing is lent. Both sides stay non-custodial. There's no collateral to post and no credit premium built into the rate, because no party takes principal risk.Access requires onboarding and full institutional KYB, which reads as a feature, not a hurdle, for the counterparties on the other side of each deal. What’s live today? Marketplace listing and bilateral matching, deal confirmations with terms recorded at origination, interest accrual and statements, recall and substitution, institutional onboarding, and Foundation disclosure with ongoing lock confirmation on delegated deals. Deeper automation of lock verification and Foundation reporting, and expanded supplier tooling, are in build. By Cashen's own figures, around 75 apps are onboarded and more than 375M CC is locked in active deals, with the fastest listing-to-match taking ten minutes. Cashen reports that most Featured App applicants who sourced a lock after the June compliance deadline did it on its platform, and the Canton Foundation has publicly pointed to Cashen as a good example of the ecosystem building real infrastructure around a governance rule. Cashen Labs is a Canton Foundation member, backed by DRW Labs (previously Ergonia, A Cumberland DRW Company).

What Each Side Holds

Cashen isn't an issuer and doesn't tokenize anything. What's transacted is the economic right to a lock commitment.

• The supplier keeps their CC throughout. No transfer, no change of custody. They hold their position plus a contractual entitlement to a fixed fee.
• The app or validator holds a bilateral agreement that their counterparty will keep a specified amount of CC in a segregated, identifiable PartyID that the Canton Foundation can monitor.

Custody stays wherever the holder already keeps it: a self-custody wallet, an institutional custodian, or a qualified third-party provider. No one is forced into a custody model. The lock itself is visible on-chain through the disclosed locking PartyID, while the commercial terms live in the confirmation generated at origination. Cashen never takes custody, control, or possession of anyone's assets. Delegation as a category doesn't assets to go anywhere. It just needs someone to promise, credibly and verifiably, that assets will stay put.

What Hecto Is Building

Hecto works on a different kind of locked capital, one with a much older story.The most valuable private companies in the world, the Hectocorns worth $100B+ that haven't listed, have their value locked in a structural sense. Allocations go to insiders. Cap tables are layered. Minimum tickets run into six figures. There's no ticker, no order book, and no daily price.The value is real, but almost nobody can touch it. Hecto is building the infrastructure to change that, natively on Canton. Infrastructure that enables tokenized index exposure through Hecto PMX and qualified, single name access through Hecto Vaults.Hecto also sits on the other side of this piece's rule. As a Featured App on Canton, it's one of the participants CIP-116 applies to. The locking requirement isn't an abstract governance topic for us. It's part of what it means to build seriously on this network.

Two Kinds of Locked Capital

Cashen deals with capital that is locked by design. Canton asks its most important participants to hold CC as a commitment, and Cashen makes that requirement efficient: the lock gets met, the holder earns a fixed fee, and nobody's asset moves.Hecto deals with capital that is locked by structure. Private markets keep the most valuable companies out of reach, and Hecto is building the means to represent, price, and eventually access them.Different problems, different products, different ends of the network. But the same conviction underneath: locked capital doesn't have to be dead capital. Build the right structure around it, keep custody and terms honest, and the commitment itself becomes something a market can work with. That's what serious on-chain capital markets look like. Not just assets coming on-chain, but the commitments, rules, and incentives around them getting the same careful infrastructure. It pays to be early.

Cashen is the Canton Coin locking marketplace, a bilateral, institutional venue where Featured Apps and Super Validators source locked CC from institutional holders under CIP-116 and CIP-105. Cashen is non-custodial on both sides and requires full institutional KYB. Metrics are provided by Cashen and are point-in-time.

Hecto is full-stack infrastructure for the pre-IPO economy, built natively on Canton. Hecto PMX and Vaults are coming soon. Subject to eligibility, KYC, and jurisdiction.