AN OVERVIEW OF COTI

COTI is a layer one blockchain that facilitates the development of innovative fintech products that comprises various aspects of the modern digital economy. In this article, we’ll discuss COTI, and explain how it incorporates Proof of work and a directed acyclic graph (DAG) based data structure called Trustchain to establish its Proof of Trust consensus mechanism.

TL; DR

• COTI is a blockchain-based fintech platform that employs a Proof of Trust consensus mechanism and a novel directed acyclic graph (DAG) based data structure to facilitate the development of decentralized fintech solutions.

• The Proof of Trust (PoT) consensus algorithm is a blend of the Trustchain Algorithm and Proof of Work. The Proof of Trust Consensus mechanism is more energy efficient than proof of work as it eliminates the mining process involved by allocating a Trust Score to network users.

• The MultiDAG data structure on which the Trustchain is built allows for a throughput of more than 100,000 transactions per second (TPS). The MultiDAG architecture also makes it possible for several DAGs to coexist.

WHAT IS COTI?

COTI which is short for Currency of the internet is an enterprise-grade layer one blockchain based on a directed acyclic graph (DAG) architecture that was built to revolutionize payments and facilitate the development of decentralized fintech solutions such as payment networks, stablecoins, remittance services, and lots more.

COTI offers a remarkable throughput than many other payment systems as it can process over 100,000 transactions per second (TPS) with near-instant transaction finality, placing it in the same category as next-gen layer one solutions such as Aptos which can complete over 160,000 transactions in one second with sub-second finality.

COTI also provides a dispute resolution process to guard against counterparty abuse, fraud, and user mistakes. In addition to eliminating intermediaries, offering easy-to-use user and merchant-facing tools, and facilitating top-tier security.

OVERVIEW AND HISTORY OF COTI

COTI was established in 2017 by Shahaf Bar-Geffen.

Shahaf holds a bachelor of science degree in biotech and economics from Tel Aviv University. After his university days, he co-founded and directed Maple, Positive mobile, and WEB 3. Shahaf is currently the chairman of UnCaged Studios, a web3-based gaming studio, focused on developing next-gen AAA games.

COTI was launched in 2017, and its early goals included creating a decentralized payment system on the Ethereum network. However, the   Ethereum network wasn't scalable enough to meet its demands. Hence, COTI chose to create a blockchain protocol that would be suitable for usage by enterprises. After the debut of its Trustchain protocol in October 2018, COTI launched its Testnetwok in January 2019, before launching its mainnet in June 2019.

In February 2020, COTI announced the launch of MultiDAG, a protocol that issues tokens on a DAG infrastructure. In September of the same year, COTI-X was launched which was followed shortly by the launch of the Global trust system for Bitcoin in December.

In September 2021, COTI announced the launch of its bank accounts and debit cards. In the same month, Charles Hoskinson the founder of Cardano announced that COTI will create Cardano’s new stablecoin – Djed.

In November 2021, COTI announced the launch of its Mainnet 2.0 which provided support for a wide range of financial technologies and use cases for enterprises, merchants, and users. Important upgrades such as the COTI Treasury, the stablecoin factory, and merchant services, were included in this launch.

In March 2022, COTI launched the COTI Ecosystem Fund which is led by Yair Lavi, the chief financial officer of COTI, alongside a group of knowledgeable analysts and researchers. Yair and his team are tasked with identifying promising joint venture prospects and assessing how they could be of benefit to the COTI ecosystem. Recently, the fund joined other investors such as cFund, Longhash, and others, to make its first investment in WingRiders, a DEX on Cardano. The second investment was made at AdaSwap, which raised $2.6M in a round that featured notable investors including Hollywood superstar Gal Gadot.

In November 2022, Binance Pay added support for the COTI native token. Also in the same month, COTI announced the launch of Bridge 2.0 to testnet.

COTI is currently supported by a host of key industry players such as Cardano, BlackEdge Capital, Block Crafters, HARD + YAKA, Wave financial, and Lancaster.

HOW DOES COTI WORK?

COTI is based on a Directed Acyclic Graph mechanism – the Cluster –  which facilitates lightning-fast transaction finality via Trust Scores that represent transactions on the cluster.

COTI's architecture is centered on a novel consensus algorithm called Trustchain. The MultiDAG data structure on which the Trustchain is built allows for a throughput of more than 100,000 transactions per second (TPS).

Consensus is reached on the COTI network via the Proof of Trust (PoT) consensus mechanism which is a blend of the Trustchain Algorithm and Proof of Work. The Proof of Trust algorithm is more energy efficient than proof of work as it eliminates the mining process involved by leveraging DAGs to guarantee minimal network congestion, high levels of security, mass scalability, and low fees, in addition to allocating a Trust Score to network users.

The purpose of the Trust Score is to determine the amount of Proof of Trust (PoT) required to confirm a transaction. Every transaction is tied to two prior transactions with a comparable Trust Score, rather than to every other block of transactions. As a result, scalability is enabled without sacrificing performance as transactions are approved concurrently and asynchronously. Thereby, reducing network congestion and enhancing scalability.

ABOUT THE COTI TOKEN

COTI is the native token of the COTI ecosystem and it is used for the payment of transaction fees. As of the time of writing, COTI had a market capitalization of over $104.531 million US dollars and was trading at $0.09456, representing a drop of roughly 85.40% from its all-time high in November 2021 when it traded for $0.648826.

COTI is available on three different mainnets; The native COTI token is available on the  Trustchain network, the COTI coin is also available on Ethereum as an ERC-20 token, and a BEP-2 variant can be found on the Binance Network. The ERC-20 COTI token is readily accessible on most exchanges. However, holders of COTI tokens can utilize the COTI bridge to convert them between mainnets.

The COTI Dime, a stablecoin with a fixed price equivalent to 10 US cents, was also created by COTI. The COTI Dime is a unique currency that only exists on the COTI platform and acts as a mechanism for stabilizing prices.

COTI PRODUCTS AND SERVICES

COTI offers a collection of products and services to enterprises and end users, some of which include:

• COTI NFT Game:

COTI NFT Game allows users to collect NFTs, and win prizes worth over 2,000,000 COTI tokens. The COTI NFT game is playable for four weeks out of every season. Participants can gather a variety of creative non-fungible tokens (NFT) available through COTI and SuperFarm in order to win rewards.

• COTI Pay:

COTI Pay is a flexible payment solution that can handle crypto and fiat transactions both on and offline. COTI Pay also comes with benefits such as business loans and interest on deposits. COTI Pay is also integrated with the COTI bank accounts and Visa card.

• Stable Coins:

COTI provides merchants with the technology required to create their customized stable coins to enable them to take control of their money and data. These merchants can utilize any asset as a basis for adjusting the stability mechanism of their tokens.

• Loyalty Networks:

The COTI loyalty networks service from COTI offers enterprises an end-to-end solution for exploring client loyalty programs while boosting cash flow. This service also offers a branded wallet, simple integration,  frictionless payments, and lots more.

FINAL THOUGHTS

COTI's DAG-based architecture addresses the fundamental issues hindering the mass adoption of blockchain technology as it facilitates a higher transaction throughput without incurring expensive fees.  COTI falls in the same category as cutting-edge layer-one solutions like Aptos which can handle up to 160,000 transactions in one second with sub-second finality.

Aptos currently outperforms most contemporary layer-one blockchains in terms of speed, cost, security, and scalability. In addition to incurring near-zero fees.

Pontem, a leading product studio that facilitates global financial inclusion is the gateway to the Aptos blockchain and is developing the infrastructure and decentralized tools necessary for the adoption of the Aptos blockchain.  The Pontem wallet enables its users to connect to decentralized applications, explore the Aptos ecosystem, and exchange tokens. Moreover, Pontem's Liquidswap which is the first Automated Market Maker (AMM) on Aptos makes it seamless for users to swap tokens in a safe and decentralized manner, in addition to offering liquidity pools and a bridge that facilitates asset transfers across blockchains.

ABOUT PONTEM

Pontem is a product development platform that fosters global financial inclusion through blockchain technology. As a result of its partnership with Aptos, Pontem can create the foundational dApps, EVMs, AMMs, and other infrastructure needed to adopt its layer one blockchain.