Case Study: Securing a First-of-Its-Kind Liquidity Layer on the Canton Network for Tradecraft

Tradecraft is an always-on, automated liquidity layer for asset issuers and builders on the Canton Network. Incubated by Obsidian Systems, Tradecraft gives institutions, protocols, and market participants access to on-chain liquidity through a purpose-built automated market maker designed for regulated financial markets.

The platform combines atomic settlement, institutional-grade infrastructure, and activity-driven rewards to make liquidity more accessible, more productive, and better aligned with the needs of modern financial markets, operating as a decentralized exchange and liquidity infrastructure provider within the Canton ecosystem.

Tradecraft is building on an emerging network using Daml, a novel smart contract language with a first-of-its-kind implementation and little established audit precedent. The team needed a partner capable of reasoning natively about that model rather than reviewing it by analogy to more familiar blockchain ecosystems.

As a liquidity protocol, Tradecraft's risk surface spans authorization boundaries and settlement semantics across multiple parties, not a single contract in isolation. The team needed a reviewer who would assess how components such as pool state, fee logic, and settlement windows interact, rather than evaluating each in isolation and calling the sum secure.

Smart Contract Assessment: a full review of Tradecraft's Daml application conducted within Daml's actual execution model, evaluating authorization boundaries and settlement semantics across the protocol's interacting components.

Code Security Audit: a systematic review of the codebase's pool state, fee logic, and settlement windows as an interconnected system rather than a set of isolated modules.

• Daml smart contracts deployed on the Canton Network
• Automated market maker logic, including pool state and fee calculation
• Settlement windows and atomic settlement mechanics
• Authorization boundaries governing multi-party interactions

• 100% of identified findings remediated and independently re-verified, with every fix closed within 10 days of engagement close.
• A hardened automated market maker with authorization and settlement logic validated against Daml's actual execution model rather than patterns borrowed from other chains.
• Design intent translated into enforced code: additional properties identified during the engagement were encoded directly into the contracts, a lasting improvement to the codebase rather than a one-time fix.

Halborn reviewed Tradecraft's application in Daml's actual execution model, not a translated one. Because Canton and Daml have a small body of prior security work to draw on, many firms would default to mapping familiar patterns from other networks onto unfamiliar syntax. Halborn's findings instead reflected the real constraints and failure modes of the Daml model itself, giving Tradecraft confidence that the review was grounded in how the system actually behaves.

That same rigor carried into remediation. Halborn re-verified and dated each finding individually, treating fix verification as part of the engagement rather than an afterthought to the report. Precise scoping at the outset meant Tradecraft's engineers and Halborn's team shared the same understanding of what was being reviewed throughout, which kept remediation focused and efficient.

To quote the Tradecraft team:

“Halborn set the standard for security assessments on Canton. Daml had little audit precedent, so we needed a partner who could rapidly move into a new model and work within it directly. They did, and they verified every fix before the engagement concluded.”

More than delivering a point-in-time audit, Halborn stayed with Tradecraft through remediation. Every fix was independently re-verified across separate commits and individually dated before closure, so the engagement concluded only once fixes were confirmed, not simply reported. That commitment carried into a repeatable review workflow for Canton applications: a tested pattern for scoping, remediating, and re-verifying a Daml codebase against an external auditor. That pattern is reusable for Tradecraft's future work on Canton and for a wider ecosystem where this kind of process is not yet well established, reinforced by Halborn's Security Solutions Center interface throughout the engagement.

This positions Tradecraft to scale its liquidity layer across the Canton Network with a well-established security baseline already in place, and it elevated confidence across Tradecraft's engineering team that the protocol's core settlement and authorization logic had been tested on its own terms, not on borrowed assumptions.

As Canton adoption grows among institutions and asset issuers, Tradecraft is positioned to expand its automated liquidity infrastructure with a security foundation built for the model it actually runs on.