In December 2025, the CFTC launched a pilot program accepting ETH as margin collateral in derivatives markets — establishing for the first time that a crypto-native asset could serve alongside cash and treasuries as eligible collateral.

That regulatory shift created demand for infrastructure that doesn't yet exist on transparent blockchains: a way for institutions to use ETH operationally — as collateral, as a settlement asset — without broadcasting their positions, counterparties, and timing to every participant on the network.

onRails has deployed cETH on Canton Network to provide that infrastructure. cETH is 1:1 wrapped ETH — the first on Canton — with configurable privacy, atomic composability across Canton's asset ecosystem, and institutional compliance controls on a public L1.

ETH has a market capitalization of approximately $200 billion, making it the second-largest digital asset. Canton already settles USDCx (dollars) and CBTC (Bitcoin). cETH fills the ETH gap — and with it, institutions on Canton can now operate across the three largest digital asset classes in a single composable environment.

How cETH works

cETH follows a lock/mint and burn/release model. When ETH is deposited on Ethereum, the off-chain system waits for a confirmation window to pass, to ensure transaction finality (meaning the block where the deposit was made cannot be reorganized), and cETH is minted on Canton at a 1:1 ratio. To unwrap, cETH is burned on the Canton Network, the off-chain system validates the burn transaction, and the corresponding ETH is released on the Ethereum chain by the relayers.

No rehypothecation. No synthetic exposure. State transitions are recorded on-chain and verifiable end-to-end.

ETH backing is verifiable in real time at ceth.network/transparency.

Through the Canton Token Standard (CIP-56), cETH integrates across Canton applications, wallets, and venues from day one — the same standard used by USDCx and CBTC.

ETH is held in audited, protocol-controlled smart contracts on Ethereum. There is no third-party custodian. The smart contract source code has been audited by Consensys Diligence and is verifiable on-chain at etherscan.io/address/0x25fE839D739A1F106B3Acb5888bAd96aa5099d0B.

Apps and participants using cETH at launch

Loop, Bron, C8/Cantor8, Console, Cantex, Zoro Wallet, Silvana, Rho, DA Registry.

What cETH enables

ETH collateral with need-to-know privacy

On Ethereum, posting collateral broadcasts your position size, counterparty, and timing to every participant on the network. That creates front-running risk, MEV extraction, and competitive intelligence leaks before a trade even settles.

cETH on Canton eliminates this. An institution can post cETH as margin on a Canton derivatives venue, and only the parties involved and their designated compliance monitors see the transaction. The rest of the network sees nothing.

This is the infrastructure the CFTC pilot requires: not just regulatory permission to use ETH as collateral, but an operational environment where posting it doesn't create market risk.

Cross-asset settlement in a single operation

Canton settles USDCx (dollars) and CBTC alongside cETH — all under CIP-56. An institution can rebalance from cETH to USDCx, post cETH as collateral against a CBTC position, or clear across multiple asset types in one atomic transaction. For developers, CIP-56 is a standard interface. For institutions, ETH works with every other asset on Canton without bridges, intermediaries, or batch settlement windows.

Hold ETH. Use ETH. No forced liquidation.

Without cETH, an institution that only holds ETH and wants to participate in Canton's ecosystem has to sell ETH, buy USDC, and mint USDCx. That takes time, and it forces them out of the ETH position they wanted to maintain.

cETH eliminates that. Institutions keep their ETH exposure while using it operationally on Canton — as collateral, as a settlement asset, or as part of a multi-asset portfolio. The ETH stays locked 1:1 in protocol-controlled smart contracts on Ethereum, unwrappable at any time.

About onRails

onRails is a token protocol operator on the Canton Network, providing the full asset pipeline — observation, validation, execution, and recovery — for deploying and managing wrapped assets on Canton. cETH is its first protocol. Smart contracts audited by Consensys Diligence. Canton Foundation member (governance participant in Canton's Global Synchronizer).

Website: ceth.network  |  Transparency: ceth.network/transparency

Frequently Asked Questions

What is cETH?

cETH is 1:1 wrapped ETH on Canton Network, operated by onRails. ETH is deposited on Ethereum, held through a confirmation window that ensures transaction finality, and cETH is minted on Canton at a 1:1 ratio. cETH follows the CIP-56 token standard for composability across Canton assets, apps, wallets, and venues, while preserving privacy. It is fully unwrappable to ETH.

How does the mint and unwrap process work?

To mint: a user deposits ETH into the onRails smart contract on Ethereum and receives cETH on Canton at a 1:1 ratio.

To unwrap: a user initiates a burn of cETH on Canton, which triggers an unwrap request. The request enters a validation workflow — the protocol verifies the burn, confirms state consistency, and runs compliance checks before releasing the locked ETH. The unwrap SLA is 7 business days from the moment the cETH transfer is confirmed. The 7-day SLA accounts for edge cases including network congestion, chain reorganizations, and compliance flags that require manual review.

What is the custody model?

ETH is held in audited, protocol-controlled smart contracts on Ethereum. There is no third-party custodian — the smart contract itself secures the locked ETH. The smart contract code has been audited by Consensys Diligence and is verifiable on-chain at etherscan.io/address/0x25fE839D739A1F106B3Acb5888bAd96aa5099d0B.

Real-time reserve verification is available at ceth.network/transparency.

What are the fees?

onRails doesn't charge any fees for using cETH and the protocol.

Why would an institution use cETH instead of holding ETH directly?

Holding ETH and using ETH on-chain are different problems. An institution can hold ETH in custody or via an ETF. But the moment they want to post it as collateral, settle against it, or rebalance across assets, they hit Ethereum's core constraint for institutions: full transparency. Every position, every counterparty, every move is visible to the market. cETH on Canton preserves the ETH position while adding the privacy and compliance infrastructure required for institutional operations.

What is the difference between cETH and wrapped ETH on other chains?

Wrapped ETH on Ethereum L2s and other chains inherits the transparency of the underlying network — every holder and every transfer is publicly visible. cETH on Canton provides 1:1 wrapped ETH with configurable privacy, atomic cross-application composability under CIP-56, and institutional compliance controls. These are properties that wrapped ETH on transparent chains cannot offer.

Does cETH benefit from Canton's full privacy model?

Yes. Holdings, transfers, and transactions remain visible only to the parties involved and their designated compliance monitors. Uninvolved parties on the network see nothing.

Is cETH audited?

onRails' smart contracts have undergone a comprehensive security audit by Consensys Diligence. The audited contract is verifiable on-chain at etherscan.io/address/0x25fE839D739A1F106B3Acb5888bAd96aa5099d0B.

Is the smart contract upgradeable or immutable?

The protocol uses two contracts for token issuance, and both smart contracts are immutable. The vault contract holds the tokens and has a specific router that manages all of the configurations. The router contract can be swapped for a different one for the vault contract.

Locked ETH remains in protocol-controlled smart contracts on Ethereum regardless of onRails' operational status.

How do I integrate cETH into my Canton application?

Follow the integration guide at ceth.network/integration.

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