Coordinated Vaults and Strategy Profiling on Canton's Common Data Layer

Overview

Canton's global synchronizer creates a unique common data layer that enables multiple institutional vaults to coordinate, share insights, and optimize strategies while maintaining strict privacy controls. This document explores how CantonDefi can leverage this infrastructure for:

1. Coordinated vault rebalancing to minimize market impact
2. DeFi strategy profiling with privacy-preserving disclosure
3. Risk aggregation across institutional portfolios
4. Liquidity pooling without revealing individual strategies

The Common Data Layer Advantage

Traditional Siloed Architecture

Institution A          Institution B          Institution C
┌─────────────┐       ┌─────────────┐       ┌─────────────┐
│  Vault A    │       │  Vault B    │       │  Vault C    │
│             │       │             │       │             │
│  Strategy:  │       │  Strategy:  │       │  Strategy:  │
│  Unknown    │       │  Unknown    │       │  Unknown    │
│             │       │             │       │             │
│  Executes   │       │  Executes   │       │  Executes   │
│  in isolation│      │  in isolation│      │  in isolation│
└─────────────┘       └─────────────┘       └─────────────┘
       │                     │                     │
       └─────────────────────┼─────────────────────┘
                             │
                    Public DeFi Protocols
                  (Market impact compounds)

Canton Common Data Layer Architecture

┌──────────────────────────────────────────────────────┐
│         Canton Network (Common Data Layer)            │
│                                                        │
│  ┌─────────────┐  ┌─────────────┐  ┌─────────────┐  │
│  │  Vault A    │  │  Vault B    │  │  Vault C    │  │
│  │ Participant │  │ Participant │  │ Participant │  │
│  └──────┬──────┘  └──────┬──────┘  └──────┬──────┘  │
│         │                │                │          │
│         └────────────────┼────────────────┘          │
│                          │                           │
│         ┌────────────────▼────────────────┐          │
│         │   Coordination Contracts        │          │
│         │   • Strategy Profiles           │          │
│         │   • Execution Coordination      │          │
│         │   • Risk Aggregation            │          │
│         │   • Liquidity Pools             │          │
│         └─────────────────────────────────┘          │
│                                                       │
└───────────────────────────────────────────────────────┘
                          │
                 Coordinated Execution
                          │
                    Public DeFi Protocols
                 (Minimized market impact)

Key Advantage: Vaults share a common synchronizer and can selectively disclose information to each other while maintaining overall strategy confidentiality.

Use Case 1: Coordinated Rebalancing

Problem: Market Impact Amplification

When multiple large institutional vaults independently rebalance into the same DeFi protocols simultaneously, they create compounding market impact:

Time: 10:00 AM
Vault A: Buys $10M of ETH → Price impact: +0.5%
Vault B: Buys $15M of ETH → Price impact: +0.8% (on already moved price)
Vault C: Buys $12M of ETH → Price impact: +0.7% (on further moved price)

Total impact: ~2.0% slippage (vs. ~1.2% if coordinated)
All vaults pay higher average prices.

Solution: Canton-Based Execution Coordination

Vaults can create a coordination contract on Canton that orchestrates execution timing:

-- Coordination contract for multi-vault rebalancing
template RebalanceCoordinator
  with
    coordinator: Party
    participants: [Party]
    epoch: Time  -- Coordination window (e.g., 1 hour)
  where
    signatory coordinator
    observer participants

    -- Participants can submit intents to the coordinator
    choice SubmitCoordinatedIntent : ContractId PendingIntent
      with
        submitter: Party
        targetProtocol: Text
        direction: Text  -- "buy" or "sell"
        volumeBracket: Int  -- Disclosed: 1=<$1M, 2=$1-5M, 3=$5M+
        urgency: Text  -- "low" | "medium" | "high"
      controller submitter
      do
        -- Intent details remain PRIVATE to submitter
        -- Only metadata is shared
        create PendingIntent with
          submitter
          targetProtocol
          direction
          volumeBracket
          urgency
          epoch

    -- Coordinator analyzes and schedules execution
    choice ScheduleExecution : [ContractId ExecutionSlot]
      controller coordinator
      do
        -- Fetch all pending intents for this epoch
        intents <- query @PendingIntent

        -- Optimize execution order to minimize market impact
        let scheduledSlots = optimizeSchedule intents epoch

        -- Create execution slots
        mapA (\slot -> create ExecutionSlot with slot) scheduledSlots

-- Execution slot assigned to each vault
template ExecutionSlot
  with
    assignedTo: Party
    protocol: Text
    executeAfter: Time  -- Staggered timing
    executeBefore: Time
    coordinatorHint: Optional Text  -- e.g., "Execute slowly over 10 min"
  where
    signatory coordinator
    observer assignedTo

Privacy Model

What is disclosed:

• ✅ Target protocol (e.g., "Aave", "Uniswap")
• ✅ Direction (buy/sell)
• ✅ Volume bracket (coarse-grained)
• ✅ Urgency

What remains private:

• ❌ Exact amounts
• ❌ Specific tokens
• ❌ Full strategy details
• ❌ Vault's total AUM

This is limited disclosure — enough to coordinate efficiently, not enough to front-run or copy strategies.

Implementation Example

// Vault submits coordination request to Canton
async function submitCoordinatedRebalance(
  vault: VaultId,
  intent: ExecutionIntent
): Promise<void> {
  // 1. Analyze intent to extract metadata
  const metadata = analyzeIntent(intent);

  // 2. Submit to coordination contract on Canton
  await canton.ledger.submit({
    templateId: 'Coordination:RebalanceCoordinator',
    choice: 'SubmitCoordinatedIntent',
    argument: {
      submitter: vault.cantonParty,
      targetProtocol: metadata.protocol,
      direction: metadata.direction,
      volumeBracket: quantizeVolume(metadata.estimatedVolume),
      urgency: metadata.urgency
    }
  });

  // 3. Wait for execution slot assignment
  const slot = await waitForExecutionSlot(vault.cantonParty);

  // 4. Schedule relayer to execute during assigned window
  scheduleRelayerExecution(
    intent,
    slot.executeAfter,
    slot.executeBefore,
    slot.coordinatorHint
  );
}

// Quantize volume to coarse brackets (limited disclosure)
function quantizeVolume(volume: bigint): number {
  if (volume < 1_000_000n) return 1;      // <$1M
  if (volume < 5_000_000n) return 2;      // $1-5M
  if (volume < 20_000_000n) return 3;     // $5-20M
  return 4;                                // $20M+
}

Benefits

For Individual Vaults:

• Reduced slippage (up to 40% improvement in high-congestion scenarios)
• Better execution prices
• Preserved strategy confidentiality

For the Ecosystem:

• More efficient DeFi markets
• Reduced volatility from institutional flows
• Enhanced liquidity utilization

Use Case 2: DeFi Strategy Profiling with Limited Disclosure

Concept: Privacy-Preserving Strategy Benchmarking

Institutions want to answer:

• "Are my strategies performing well relative to peers?"
• "What protocols are other institutions using?"
• "Should I adjust my risk parameters?"

But they cannot share full strategy details due to:

• Competitive concerns
• Regulatory restrictions
• IP protection

Canton Solution: Selective Disclosure Framework

-- Strategy profile with tiered disclosure
template StrategyProfile
  with
    institution: Party
    profileId: Text
    disclosureLevel: Int  -- 1=minimal, 2=moderate, 3=detailed
    -- Level 1: Public to all participants
    strategyType: Text  -- "Yield Optimization", "Delta Neutral", etc.
    riskCategory: Text  -- "Conservative", "Moderate", "Aggressive"
    assetClass: [Text]  -- ["Stables", "Blue Chip"], etc.

    -- Level 2: Disclosed to trusted partners only
    observers_L2: [Party]
    protocolsMajor: Optional [Text]  -- ["Aave", "Compound"] (>20% allocation)
    avgAPY_Range: Optional Text  -- "5-8%", "8-12%", etc.

    -- Level 3: Disclosed to select auditors/regulators
    observers_L3: [Party]
    fullAllocations: Optional [(Text, Decimal)]  -- Full breakdown
    riskMetrics: Optional RiskMetrics
  where
    signatory institution
    observer observers_L2 ++ observers_L3

    -- Upgrade disclosure level (irreversible)
    choice UpgradeDisclosure : ContractId StrategyProfile
      with newLevel: Int
      controller institution
      do
        assertMsg "Can only upgrade" (newLevel > disclosureLevel)
        create this with disclosureLevel = newLevel

    -- Share profile with specific party
    choice ShareWith : ContractId StrategyProfile
      with party: Party, level: Int
      controller institution
      do
        let newObservers = case level of
              2 -> party :: observers_L2
              3 -> party :: observers_L3
              _ -> error "Invalid level"
        create this with
          observers_L2 = if level == 2 then newObservers else observers_L2
          observers_L3 = if level == 3 then newObservers else observers_L3

-- Aggregate benchmarking contract
template StrategyBenchmark
  with
    benchmarkId: Text
    aggregator: Party  -- Trusted third party or DAO
    participants: [Party]
    epoch: Time
  where
    signatory aggregator
    observer participants

    choice ComputeAggregate : ContractId BenchmarkResult
      controller aggregator
      do
        -- Fetch all Level 1 profiles
        profiles <- query @StrategyProfile

        -- Compute aggregate statistics (privacy-preserving)
        let aggregateStats = computeStats profiles

        create BenchmarkResult with
          benchmarkId
          epoch
          aggregator
          participants
          stats = aggregateStats

-- Published benchmark results
template BenchmarkResult
  with
    benchmarkId: Text
    epoch: Time
    aggregator: Party
    participants: [Party]
    stats: AggregateStats
  where
    signatory aggregator
    observer participants

data AggregateStats = AggregateStats
  { avgAPY_Conservative: Decimal
  , avgAPY_Moderate: Decimal
  , avgAPY_Aggressive: Decimal
  , topProtocols: [(Text, Int)]  -- Protocol name, usage count
  , participantCount: Int
  }

Privacy Guarantees

Differential Privacy Approach:

When computing aggregates, add noise to prevent inference of individual strategies:

// Compute aggregate statistics with differential privacy
function computePrivateAggregate(
  profiles: StrategyProfile[],
  epsilon: number = 0.1  // Privacy budget
): AggregateStats {
  // 1. Compute raw statistics
  const rawStats = {
    avgAPY_Conservative: profiles
      .filter(p => p.riskCategory === 'Conservative')
      .map(p => p.avgAPY)
      .reduce((a, b) => a + b, 0) / profiles.length,
    // ... other categories
  };

  // 2. Add Laplace noise for differential privacy
  const noise = laplace(epsilon);

  return {
    avgAPY_Conservative: rawStats.avgAPY_Conservative + noise,
    avgAPY_Moderate: rawStats.avgAPY_Moderate + noise,
    avgAPY_Aggressive: rawStats.avgAPY_Aggressive + noise,
    topProtocols: rawStats.topProtocols,  // Threshold k-anonymity
    participantCount: profiles.length
  };
}

Example Usage

// Institution A publishes Level 1 profile
await canton.ledger.submit({
  templateId: 'Profiling:StrategyProfile',
  argument: {
    institution: 'InstitutionA',
    profileId: 'profile-001',
    disclosureLevel: 1,
    strategyType: 'Yield Optimization',
    riskCategory: 'Moderate',
    assetClass: ['Stables', 'Blue Chip'],
    observers_L2: [],
    observers_L3: [],
    protocolsMajor: null,
    avgAPY_Range: null,
    fullAllocations: null,
    riskMetrics: null
  }
});

// Institution A shares Level 2 details with trusted partner (Institution B)
await canton.ledger.exercise({
  contractId: profileCid,
  choice: 'ShareWith',
  argument: {
    party: 'InstitutionB',
    level: 2
  }
});

// Aggregator computes benchmark (visible to all participants)
const benchmark = await canton.ledger.exercise({
  contractId: benchmarkCid,
  choice: 'ComputeAggregate'
});

// Institution A compares its performance to aggregate
const myAPY = 7.2;
const peerAvg = benchmark.stats.avgAPY_Moderate;  // 6.8%

console.log(`My performance: ${(myAPY - peerAvg).toFixed(2)}% above peer average`);

Use Case 3: Risk Aggregation Across Portfolios

Problem: Hidden Concentration Risk

Multiple institutions unknowingly concentrate exposure in the same DeFi protocols, creating systemic risk:

Institution A: 60% in Aave
Institution B: 70% in Aave
Institution C: 55% in Aave

If Aave has an exploit → All three institutions suffer simultaneously
Regulators cannot see aggregate exposure without full disclosure

Canton Solution: Privacy-Preserving Risk Aggregation

-- Risk reporting with privacy preservation
template RiskReport
  with
    institution: Party
    reportId: Text
    epoch: Time
    regulator: Party  -- Observer (e.g., central bank)
    -- Disclosed only to regulator
    protocolExposures: [(Text, Decimal)]  -- e.g., [("Aave", 0.60), ...]
    totalAUM: Decimal
  where
    signatory institution
    observer regulator

    -- Institution can update exposure
    choice UpdateExposures : ContractId RiskReport
      with newExposures: [(Text, Decimal)]
      controller institution
      do
        create this with protocolExposures = newExposures

-- Regulator's aggregation contract
template SystemicRiskAnalysis
  with
    regulator: Party
    epoch: Time
    institutions: [Party]
  where
    signatory regulator
    observer institutions

    choice ComputeSystemicRisk : ContractId SystemicRiskResult
      controller regulator
      do
        -- Fetch all risk reports (regulator can see all)
        reports <- query @RiskReport

        -- Compute aggregate exposures
        let totalExposure = aggregateExposures reports

        -- Identify concentration risks
        let risks = identifyConcentrationRisks totalExposure

        create SystemicRiskResult with
          regulator
          epoch
          aggregateExposures = totalExposure
          concentrationRisks = risks

-- Published result (anonymized)
template SystemicRiskResult
  with
    regulator: Party
    epoch: Time
    aggregateExposures: [(Text, Decimal)]  -- Total $ in each protocol
    concentrationRisks: [ConcentrationRisk]
  where
    signatory regulator
    -- Observable by all institutions (but anonymized)
    observer institutions

data ConcentrationRisk = ConcentrationRisk
  { protocol: Text
  , totalExposure_USD: Decimal
  , institutionCount: Int  -- How many institutions exposed
  , averageConcentration: Decimal  -- Avg % of portfolio
  , riskLevel: Text  -- "Low", "Medium", "High"
  }

Privacy Model

What Regulator Sees:

• ✅ Each institution's full risk report (due to observer status)
• ✅ Aggregate exposures across all institutions
• ✅ Concentration risks

What Institutions See:

• ✅ Aggregate statistics (anonymized)
• ✅ Concentration warnings
• ❌ Other institutions' individual exposures
• ❌ Identifiable breakdown

Example Output (Public):

{
  "epoch": "2025-10-15T00:00:00Z",
  "aggregateExposures": [
    {"protocol": "Aave", "totalExposure": 450000000, "institutionCount": 12},
    {"protocol": "Compound", "totalExposure": 320000000, "institutionCount": 9},
    {"protocol": "Uniswap", "totalExposure": 280000000, "institutionCount": 15}
  ],
  "concentrationRisks": [
    {
      "protocol": "Aave",
      "totalExposure_USD": 450000000,
      "institutionCount": 12,
      "averageConcentration": 0.62,
      "riskLevel": "High"
    }
  ]
}

Institution Response:

// Institution A reads the systemic risk report
const report = await canton.ledger.getContract(reportCid);

// Compare to own exposure
const myAaveExposure = 0.60;  // 60%
const avgAaveExposure = report.concentrationRisks
  .find(r => r.protocol === 'Aave')
  .averageConcentration;  // 62%

if (myAaveExposure >= avgAaveExposure) {
  console.warn('Your Aave exposure is at/above peer average in high-risk zone');
  // Trigger internal policy review
  await triggerPolicyReview('Aave-concentration');
}

Use Case 4: Collaborative Liquidity Pools

Concept: Multi-Institutional Liquidity Pool

Multiple institutions can pool capital for specific strategies while maintaining individual custody and control:

-- Collaborative liquidity pool
template LiquidityPool
  with
    poolId: Text
    manager: Party  -- Pool manager (could be DAO)
    participants: [Party]
    strategy: Text  -- "ETH-USDC LP", "Curve 3pool", etc.
    totalCommitted: Decimal
  where
    signatory manager
    observer participants

    -- Participant commits capital
    choice CommitCapital : ContractId CapitalCommitment
      with
        participant: Party
        amount: Decimal
        vaultAddress: Text  -- On-chain vault address
      controller participant
      do
        create CapitalCommitment with
          poolId
          participant
          amount
          vaultAddress
          manager

    -- Manager executes strategy on behalf of pool
    choice ExecutePoolStrategy : ContractId PoolExecutionIntent
      with
        targetProtocol: Text
        action: Text
        aggregateAmount: Decimal
      controller manager
      do
        -- Verify sufficient committed capital
        commitments <- query @CapitalCommitment
        let totalCommitted = sum (map (.amount) commitments)
        assertMsg "Insufficient capital" (aggregateAmount <= totalCommitted)

        -- Create execution intent
        create PoolExecutionIntent with
          poolId
          manager
          targetProtocol
          action
          aggregateAmount
          participants

-- Execution intent for pool
template PoolExecutionIntent
  with
    poolId: Text
    manager: Party
    targetProtocol: Text
    action: Text
    aggregateAmount: Decimal
    participants: [Party]
  where
    signatory manager
    observer participants

    -- Each participant must sign-off (for their portion)
    choice ParticipantApprove : ()
      with approver: Party
      controller approver
      do
        assertMsg "Not a participant" (approver `elem` participants)
        return ()

    -- Once all approved, manager can finalize
    choice FinalizePoolExecution : ContractId ExecutionIntent
      controller manager
      do
        -- Generate single aggregated ExecutionIntent
        -- This is submitted to a pool-controlled vault on the public chain
        create ExecutionIntent with
          vaultId = "pool-" <> poolId
          nonce = getNextNonce poolId
          actions = [parseAction action targetProtocol aggregateAmount]
          deadline = addRelTime (getTime) (hours 1)

Benefits

For Small Institutions:

• Access to strategies requiring large capital
• Shared gas costs (single aggregated transaction)
• Professional management while retaining custody

For Large Institutions:

• Earn management fees
• Deploy capital more efficiently
• Build reputation and network effects

Privacy Considerations

What is disclosed:

• ✅ Pool strategy (e.g., "Curve 3pool")
• ✅ Participant list (within the pool)
• ✅ Total committed capital

What remains private:

• ❌ Each participant's exact contribution (unless they choose to disclose)
• ❌ Profitability of individual participants
• ❌ Other strategies each participant is running

Implementation Architecture

Canton Contracts Layer

┌───────────────────────────────────────────────────┐
│         Canton Network (Common Data Layer)         │
│                                                     │
│  ┌─────────────────────────────────────────────┐  │
│  │  Coordination Contracts                     │  │
│  │  • RebalanceCoordinator                     │  │
│  │  • StrategyProfile & Benchmarking           │  │
│  │  • RiskReport & SystemicRiskAnalysis        │  │
│  │  • LiquidityPool & CapitalCommitment        │  │
│  └─────────────────────────────────────────────┘  │
│                                                     │
│  Participating Institutions:                        │
│  ┌──────────┐ ┌──────────┐ ┌──────────┐           │
│  │ Vault A  │ │ Vault B  │ │ Vault C  │ ...       │
│  └────┬─────┘ └────┬─────┘ └────┬─────┘           │
└───────┼────────────┼────────────┼──────────────────┘
        │            │            │
        │   Coordinated Execution │
        └────────────┼────────────┘
                     │
            ┌────────▼─────────┐
            │ Relayer Cluster  │
            │ (Execution Layer)│
            └────────┬─────────┘
                     │
         ┌───────────┴───────────┐
         │                       │
    ┌────▼────┐            ┌─────▼─────┐
    │ Ethereum│            │  Polygon  │
    │ DeFi    │            │  DeFi     │
    └─────────┘            └───────────┘

Key Components

1. Coordination Service:

class CoordinationService {
  constructor(
    private canton: CantonLedgerClient,
    private config: CoordinationConfig
  ) {}

  // Submit coordination request
  async submitForCoordination(
    vault: VaultId,
    intent: ExecutionIntent
  ): Promise<ExecutionSlot> {
    const metadata = this.extractMetadata(intent);
    return await this.canton.submitCoordinatedIntent(metadata);
  }

  // Listen for execution slots
  async waitForExecutionSlot(vault: VaultId): Promise<ExecutionSlot> {
    return await this.canton.subscribeToSlots(vault);
  }

  // Report execution results
  async reportExecution(
    slot: ExecutionSlot,
    result: TransactionReceipt
  ): Promise<void> {
    await this.canton.updateCoordinationState(slot, result);
  }
}

2. Strategy Profiling Service:

class StrategyProfilingService {
  // Publish strategy profile
  async publishProfile(
    vault: VaultId,
    profile: StrategyProfileData,
    disclosureLevel: number
  ): Promise<ContractId> {
    return await this.canton.createStrategyProfile({
      institution: vault.institution,
      disclosureLevel,
      ...profile
    });
  }

  // Fetch benchmark
  async getBenchmark(
    strategyType: string,
    riskCategory: string
  ): Promise<BenchmarkStats> {
    const results = await this.canton.queryBenchmark({
      strategyType,
      riskCategory
    });
    return results.stats;
  }

  // Compare performance
  compareToMarket(myAPY: number, benchmark: BenchmarkStats): Comparison {
    return {
      percentile: this.computePercentile(myAPY, benchmark),
      relativeDelta: myAPY - benchmark.median,
      performanceCategory: this.categorize(myAPY, benchmark)
    };
  }
}

3. Risk Aggregation Service:

class RiskAggregationService {
  // Submit risk report to regulator
  async submitRiskReport(
    vault: VaultId,
    exposures: ProtocolExposure[]
  ): Promise<void> {
    await this.canton.createRiskReport({
      institution: vault.institution,
      regulator: this.config.regulator,
      protocolExposures: exposures,
      totalAUM: vault.totalAUM,
      epoch: new Date()
    });
  }

  // Fetch systemic risk analysis
  async getSystemicRiskAnalysis(): Promise<SystemicRiskResult> {
    return await this.canton.querySystemicRisk();
  }

  // Check if vault has concentration risk
  checkConcentrationRisk(
    vault: VaultId,
    systemicReport: SystemicRiskResult
  ): RiskAlert[] {
    const alerts: RiskAlert[] = [];

    for (const risk of systemicReport.concentrationRisks) {
      const myExposure = vault.getExposure(risk.protocol);
      if (myExposure >= risk.averageConcentration * 1.1) {
        alerts.push({
          protocol: risk.protocol,
          myExposure,
          avgExposure: risk.averageConcentration,
          riskLevel: risk.riskLevel,
          recommendation: 'Consider diversifying'
        });
      }
    }

    return alerts;
  }
}

Security and Privacy Considerations

1. Selective Disclosure Controls

Institutions must carefully manage what they disclose:

// Policy engine for disclosure decisions
class DisclosurePolicy {
  // Determine what level of disclosure is appropriate
  assessDisclosure(
    intent: ExecutionIntent,
    context: CoordinationContext
  ): DisclosureLevel {
    // Level 1: Minimal (always safe)
    if (context.trustLevel === 'public') {
      return {
        level: 1,
        shareProtocol: true,
        shareDirection: true,
        shareVolumeBracket: true,
        shareExactAmount: false,
        shareTokens: false
      };
    }

    // Level 2: Moderate (trusted partners)
    if (context.trustLevel === 'partners' && context.reciprocal === true) {
      return {
        level: 2,
        shareProtocol: true,
        shareDirection: true,
        shareVolumeBracket: true,
        shareExactAmount: false,
        shareTokens: true  // More detail for partners
      };
    }

    // Level 3: Detailed (regulators only)
    if (context.trustLevel === 'regulator') {
      return {
        level: 3,
        shareProtocol: true,
        shareDirection: true,
        shareVolumeBracket: true,
        shareExactAmount: true,
        shareTokens: true
      };
    }

    throw new Error('Unknown trust level');
  }
}

2. Anti-Frontrunning Protections

Coordination data must be protected from exploitation:

-- Time-locked coordination data
template TimeLocked_CoordinationData
  with
    data: CoordinationMetadata
    revealAt: Time
    participants: [Party]
  where
    signatory coordinator
    observer participants

    -- Data can only be revealed after designated time
    choice Reveal : CoordinationMetadata
      controller coordinator
      do
        now <- getTime
        assertMsg "Too early to reveal" (now >= revealAt)
        return data

// Commit-reveal scheme for coordination
async function submitWithCommitReveal(
  intent: ExecutionIntent
): Promise<void> {
  // 1. Commit phase: Submit hash only
  const commitment = hash(intent);
  await canton.submitCommitment(commitment);

  // 2. Wait for all commitments
  await waitForAllCommitments();

  // 3. Reveal phase: Submit actual intent
  await canton.revealIntent(intent);

  // 4. Coordinator can now schedule (all reveals collected)
  await waitForSchedule();
}

3. Audit Trail

All coordination activities must be auditable:

template CoordinationAuditLog
  with
    logId: Text
    coordinator: Party
    participants: [Party]
    auditor: Party  -- Regulator or compliance officer
    events: [AuditEvent]
  where
    signatory coordinator
    observer auditor :: participants

    choice LogEvent : ContractId CoordinationAuditLog
      with event: AuditEvent
      controller coordinator
      do
        create this with events = event :: events

data AuditEvent = AuditEvent
  { timestamp: Time
  , eventType: Text  -- "IntentSubmitted", "SlotAssigned", "Executed"
  , participant: Party
  , metadata: Text  -- Sanitized metadata
  }

Governance and Economics

1. Coordination Service Fees

The coordination service (operated by a DAO or consortium) charges fees:

template CoordinationFee
  with
    coordinator: Party
    feeStructure: FeeStructure
  where
    signatory coordinator

data FeeStructure = FeeStructure
  { baseFee: Decimal  -- Fixed fee per coordination
  , volumeFee: Decimal  -- Basis points on volume
  , rebate: Decimal  -- Rebate for providing liquidity timing data
  }

-- Fee payment contract
template FeePayment
  with
    payer: Party
    coordinator: Party
    amount: Decimal
    servicePeriod: Time
  where
    signatory payer
    observer coordinator

    choice SettleFee : ()
      controller coordinator
      do
        -- Mark as settled (actual payment happens on-chain)
        return ()

2. Incentive Alignment

Participants are incentivized to share coordination data:

Rebates for early submission:

function calculateCoordinationFee(
  volume: bigint,
  submissionTime: Date,
  epochStart: Date
): bigint {
  const baseFee = volume * 0.0001n;  // 1 bps

  // Early submission rebate
  const earlyMinutes = (submissionTime - epochStart) / 60000;
  const rebate = earlyMinutes < 30
    ? baseFee * 0.5n  // 50% rebate for submitting >30min early
    : 0n;

  return baseFee - rebate;
}

Performance sharing:

• Vaults that achieve lower slippage through coordination share their savings
• Creates network effects: more participants → better coordination → more participants

Regulatory Compliance

Regulator Integration

Regulators can be permanent observers on risk aggregation contracts:

template RegulatorObserver
  with
    regulator: Party
    jurisdiction: Text
    observedInstitutions: [Party]
    observedContracts: [Text]  -- Template IDs regulator can see
  where
    signatory regulator
    observer observedInstitutions

    -- Institutions must grant observer rights
    choice GrantObserverAccess : ()
      with institution: Party
      controller institution
      do
        assertMsg "Institution not in jurisdiction"
          (institution `elem` observedInstitutions)
        return ()

Compliance benefits:

• Real-time systemic risk monitoring
• No periodic reporting burden on institutions
• Regulators can audit coordination activities
• Privacy preserved for competitive data

Roadmap and Future Extensions

Phase 1: Basic Coordination (Months 1-6)

• ✅ Implement RebalanceCoordinator contract
• ✅ Deploy coordination service
• ✅ Onboard 3-5 pilot institutions
• ✅ Measure slippage improvements

Phase 2: Strategy Profiling (Months 6-12)

• ✅ Deploy StrategyProfile and benchmarking contracts
• ✅ Implement differential privacy aggregation
• ✅ Launch public benchmark dashboard
• ✅ Onboard 10-15 institutions

Phase 3: Risk Aggregation (Months 12-18)

• ✅ Integrate regulator observers
• ✅ Deploy RiskReport and SystemicRiskAnalysis
• ✅ Publish monthly systemic risk reports
• ✅ Implement automated concentration alerts

Phase 4: Liquidity Pools (Months 18-24)

• ✅ Deploy LiquidityPool contracts
• ✅ Enable cross-institutional pooling
• ✅ Launch DAO for pool governance
• ✅ Scale to 25+ participating institutions

Conclusion

Canton's common data layer, anchored by the global synchronizer, enables unprecedented coordination between institutional vaults while preserving privacy and competitive confidentiality.

Key Benefits:

1. Coordinated execution → 30-50% slippage reduction
2. Strategy benchmarking → Data-driven optimization
3. Risk aggregation → Systemic risk prevention
4. Collaborative pooling → Capital efficiency

Privacy Guarantees:

• Selective disclosure controlled by each institution
• Differential privacy for aggregates
• Cryptographic separation enforced by Canton
• Regulator visibility without compromising competition

Next Steps:

• Pilot coordination service with 3 institutions
• Deploy benchmarking contracts on Canton testnet
• Engage regulators for risk aggregation pilot
• Build coordination dashboard and analytics

This represents a fundamentally new capability enabled by Canton's architecture — private yet coordinated institutional DeFi.