Digital Asset is a leading financial technology company and the creator of the Canton Network distributed ledger. The network is rapidly gaining traction across the fintech space, serving as a key enabler for established financial institutions entering the digital asset economy, as well as crypto-native companies looking to scale decentralized finance (DeFi) with enterprise-grade privacy. Companies using the Canton Network include: J. P. Morgan, HSBC, BNP Paribas, DTCC, Circle, and Tradeweb. You can explore the full ecosystem here.
VirtusLab has been a long-standing technology partner of Digital Asset, supporting the development of the Canton Network for over five years. We have strongly contributed to more than 20 initiatives across various layers of the system.
Read more about the Canton Network and what problems it solves.
Previously, upgrading the Canton Network's protocol version required a high-touch, synchronized effort known as a Hard Domain Migration. This was due to the fact that Canton operates as a decentralized network where each participant node independently maintains its own local transaction history and validates ledger states. Changes to the protocol version alter the core rules governing how decentralized nodes reach consensus on transaction processing. If all participants do not switch to the new protocol version simultaneously, this consensus mechanism becomes compromised. This necessitated pausing transaction sequencing, freezing the network state, and requiring all node operators to manually migrate to a new domain instance in lockstep.
To eliminate this downtime and remove heavy coordination overhead, the Digital Asset core team supported by VirtusLab engineers set out. Its ultimate goal was to redefine how the network handles protocol version upgrades and replace hard migrations with a minimal downtime mechanism: the Logical Synchronizer Upgrade (LSU) – an automated, protocol-level mechanism within the Canton Network that would allow the underlying synchronization infrastructure to be upgraded seamlessly on a live application.
Our engineers were ready to take part in this initiative and tackle such a high-stakes infrastructure shift because they were already familiar with the Canton ecosystem. They had previously helped with several modernization initiatives to phase out legacy code, including:
- Introduction of IaC unit testing – unlocking rapid feedback loops for infrastructure changes and significantly expanding test coverage.
- Infrastructure config refactoring and modularisation – eliminating monolithic configuration bottlenecks to improve development velocity.
Architecturally, the Canton Network infrastructure is decoupled into several isolated deployment units within Pulumi – the Infrastructure as Code (IaC) platform Digital Asset uses to automate and manage its cloud footprints. Because we had deep expertise in Pulumi, we aligned it with the network's new LSU requirements.
Since implementing the LSU required complex state and resource migrations within Pulumi itself, one of our experts analyzed various state-migration strategies, mapping out the precise trade-offs, edge cases, and safety pitfalls of each approach and presented internally the outcome during the internal knowledge sharing session.
The critical step for the LSU framework was executing a participant migration. This involved isolating a specific, stateful node component and safely transitioning its state to a separate deployment unit without triggering redeployment. By re-engineering these Pulumi stacks and decoupling the deployment units, the team successfully built the foundational infrastructure required to unblock and execute the Logical Synchronizer Upgrade. LSU decouples the upgrade process by spinning up the new synchronizer infrastructure in parallel with the live network. This ensures that when the transition occurs, applications experience zero disruption to the logical network and maintain access to all historical data without requiring complex database migrations.
Through this successful collaboration, the team deployed the Logical Synchronizer Upgrade (LSU) framework – transforming Canton Network updates into a seamless, non-invasive process. By shifting the migration mechanics directly to the Canton protocol level, the new system drastically simplifies network logistics.
Key outcomes of this new architecture include:
- Asynchronous Node Progression: Participant nodes no longer need to be upgraded simultaneously in a forced lockstep. Instead, nodes communicate natively across the network to automatically propagate and coordinate the transition state.
- Configurable Governance: Network operators can now programmatically define the duration of the upgrade window, offering enterprise participants unprecedented predictability and control over maintenance timelines.
- Live Application Continuity: The entire protocol transition occurs seamlessly on live, running applications without requiring a system-wide freeze.
Ultimately, the defining benefit of the project is that the Canton Network can now execute critical core infrastructure upgrades with reduced downtime and minimized risk, ensuring continuous, 24/7 availability for the institutional financial systems relying on the network. We are proud to have been part of the Digital Assets team behind this vast improvement.
Looking to de-risk your upcoming Canton Network or Daml deployments? Contact us and we will discuss your engineering needs!
