COTI stands for “Currency Of The Internet”, they declare themselves as the ultimate power grid of payments. Aiming to disrupt the payment processing industry which was valued at $39.57 billion in 2020, and is projected to reach $146.45 billion by 2030. COTI is coming for their share of the pie. Let’s take a look at their project, achievements so far and plans for the future.
What is COTI?
$COTI is a DAG-based blockchain focused on tackling the challenges of traditional finance. The mission is to eliminate intermediaries and empower organizations to build their own payment solutions and digital currencies or stablecoins. They do othat by providing enterprises and other merchants with a suite of products aimed at processing payments. We’ll explore the different products later in this article. First, we’ll have a look at their technology.
Exploring the tech side-of-things
COTI scores very well in the tech department. They seem to be able to address the issues of scalability and high network fees through their proprietary Trustchain which works with a Proof-of-Trust (PoT) consensus mechanism. Network participants are assigned a Trustscore. To interact in the network, your transactions are validated by nodes with similar trust scores. This promotes good network behavior and allows for trusted merchants to have VERY fast payment processing. That is because a higher trustscore leads to faster processing times.
COTI utilizes a DAG (Directed Acyclic Graph) data structure. Without getting too much into the technical side of it, you should know that in a DAG (unlike blockchains), multiple transactions can be validated at once. So in a DAG environment, users do not have to wait for previous transactions to go through before starting a new one. You can probably imagine that this is a big factor in driving scalability for faster and more secure payments.
Since COTI helps enterprises implement payment solutions and issue their own stablecoins, they came up with the MultiDAG system. COTI MultiDAG gives token issuers overall control over their network, they set up their own rules. This system gives room for unlimited instances and tokens without any network degradation. Multiple layers work in tandem to drive scalability to over 100.000 TPS (transactions per second). Needless to say, their solution for driving scalability is very impressive.
Trustchain key innovations and advantages
Below you’ll find a clear overview with key innovations and advantages of the Trustchain, made by the COTI team:
Team and investors
Shahaf Bar-Geffen is the CEO of COTI. He previously co-founded the company ‘WEB3’, a leading digital media advertising firm. As a CEO, Shahaf stands out compared to other project founders in the space. Het’s always at the forefront, and has a lot of experience and knowledge. He also has a professional image that he upholds, he conducts himself in a professional and articulate manner.
Of course, he doesn’t do everything alone and has a team of at least 28 employees who all seem to have a lot of experience in relevant fields. They’ve also been given a vote of confidence by big parties/investord; Cardano amongst others. Shahaf also has a close relationship with Charles Hoskinson, the founder of Cardano.
COTI is a sulf-sustainable, revenue-generating business.
COTI, unlike a lot of crypto projects, is not just a whitepaper with empty promises. They have working products, they are a real revenue-generating business that can sustain itself. Coti Pay has a network of 5.000 merchants + 80K user.
Exploring the different COTI products
Let’s take a closer look at the different products:
COTI Pay can process all payment types, both online and offline, including crypto and stable coins, credit cards and even a merchant’s native coin.
Whitelabel payments network
Build your own payment network, cut out third-party intermediaries and explore new revenue models. Transact freely with your own payment method, digital wallet, coin, and more.
COTI developed a solution for building blockchain-based loyalty networks to increase profits and customer retention. Users will be rewarded with loyalty tokens in their wallets, while businesses can create new revenue streams.
COTI supplies the technology needed to power stable coins by providing customers with their own branded stable coin they can trust. Companies can adjust their stability mechanism to any asset of their choosing.
Oh, speaking of stablecoins… You may want to keep reading as this is where it gets interesting!
COTI builds $Djed - The stablecoin of the Cardano network
As mentioned above, COTI helps projects/enterprises issue branded stable coins. During a recent Cardano Summit, Charles Hoskinson – founder of Cardano – announced that COTI will be the official issuer of Djed: the main stablecoin for the Cardano network.
Djed will not be like other stable coins. The main thing that sets them apart will be their collateralization rate. Djed will be over-collateralized by a 4:1 ratio. In true Cardano fashion, a team of data scientists and researchers looked into historical data of $ADA and analyzed price fluctuations based on different parameters such as volume, dates, time periods, and velocity, among others and they concluded that having a minimum over-collateralized ratio of 400% would be sufficient to release a stable and secure protocol in the long term.
What does the release of Djed mean for COTI?
This is where it gets interesting..
Coti will write all Djed contracts and run the front end interacting with funds, enterprises or anyone that wishes to mint reserve coins and stable coins. For this service, Coti collects fees on both minting and burning stbale and reserve coins. That is pretty big, due to the fact that Djed is more than just a stable coin.
Djed is designed to be the main coin for the Cardano network to pay all its fees. Djed is stable, it makes more sense to pay gas with Djed (a stable value) versus a volatile asset like ADA, so says Charles Hoskinson.
ADA is a top 10 crypto project. As their ecosystem grows and gains traction, more fees will be paid by network participants. Therefore, the collected fees by COTI will also grow. Fees collected by COTI through Djed and ADA pay (which they also developed), will be used to buy COTI off the open market and send them to the treasury. COTI stakers benefit from a bigger treasury as it will lead to a higher APY on their staked COTI.
Is COTI a good investment?
Well, we’re not telling you to buy COTI as we don’t give financial advice. But, their tech is very solid, they’ve got an experienced team and a CEO that is very much on top of things.
COTI also has close ties to the Cardano foundation. Shahaf (COTI CEO) is close with Charles Hoskinson (ADA founder). COTI previously developed ADA PAY and will be working on Djed stablecoin. We discussed the implications of Djed for COTI in the previous paragraph. COTI has a long list of partnerships with Cardano-based projects like Muesliswap, Adaswap and many more. If you’re bullish on the Cardano ecosystem, you should probably be bullish on COTI as well.
Remember, their work with Cardano is just one part of their project. Of course, it will bring a lot of attention to COTI as well as grow their tresury substantially through the collected fees, but there will be more projects they do this type of work for. Once crypto reaches a point of mass adoption, it’s not hard to imagine a world where a lot of enterprises have a need for their own branded stablecoins or an online payment solution provided by COTI.
The future looks bright, and we are personally very eager to watch COTI continue to grow.
Fair disclaimer: we’re invested in this project.
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