COTI Achieves Critical Privacy Milestone for Ambitious Ethereum L2 Upgrade

Key Takeaway

• COTI achieved a major development milestone by successfully integrating MPC protocol into its upcoming COTI V2 architecture.
• MPC enables private computation on sensitive data, providing privacy benefits needed for enterprise/consumer adoption.
• COTI’s MPC implementation distributes encrypted user data across endpoints that collaboratively compute results.
• The integration of MPC lays the groundwork for COTI V2’s enhanced privacy, security and compliance capabilities.
• COTI V2 aims to leverage technologies like MPC and zk-Rollups to maximise performance, scalability and privacy on Ethereum Layer 2.

COTI, a digital payment network looking to upgrade into a privacy-focused Layer 2 on Ethereum, recently achieved an integral milestone that advances its development roadmap.

After months of work, COTI successfully completed designing and integrating a multi-party computation (MPC) protocol into its upcoming COTI V2 architecture. MPC refers to a sophisticated cryptography technique that allows a group of parties to jointly compute results from private data without exposing the underlying data.

This privacy-preserving functionality will serve as a core component powering the COTI V2 network. By leveraging MPC, COTI V2 will enable developers to build decentralised applications that handle sensitive user information securely and competently.

Importance of Privacy for Blockchain Adoption 

COTI’s push into MPC signals a growing focus on privacy across the blockchain industry. As enterprises and consumers look to leverage blockchain technology, concerns around data exposure have frequently arisen as obstacles to adoption.

Integrating privacy enhancements like MPC aims to remove these adoption barriers by proving blockchains can offer confidentiality guarantees comparable to traditional systems. The ability to compute sensitive information without compromising data could open up a wide range of valuable use cases.

How MPC Protects Data Privacy

MPC involves distributing data inputs across endpoints controlled by different parties. These endpoints encrypt the data in a collaborative process that maintains confidentiality while still allowing computations to occur.

In COTI’s implementation, user data gets submitted to MPC endpoints in an encrypted state. The endpoints run computational workloads on this data to produce outputs that may be public or encrypted for specific users. No single endpoint ever has full access to the plaintext inputs or sensitive intermediate data.

COTI relied on advanced cryptography, like garbled circuits, to realise this complex choreography. These one-time executable structures translate pseudo-contracts into encrypted computational blueprints. After use, the garbled circuits get destroyed to prevent potential misuse.

Integrating MPC into the COTI Tech Stack

COTI’s push into MPC highlights the technology’s growing popularity as projects search for “best of both worlds” solutions that merge public blockchains and private data. MPC unlocks this hybrid model through its mathematical assurances of data confinement during off-chain computations.

The company emphasised that this milestone is only the first of many on its stacked development roadmap for 2023. COTI plans to share more updates as work progresses on other components, like its extended EVM module and revamped staking model.

The scope of upgrades in the works signifies COTI’s ambitious vision for its Ethereum L2 rollout. By zeroing in on features like MPC and zk-Rollups, the project aims to offer users some of the highest performance, scalability, and privacy available on Layer 2.

COTI first emerged in 2017 as a fintech-focused payments network built on its own bespoke blockchain. Its native token currently boasts a market cap of over $150 million.

The pivot to an Ethereum sidechain optimises COTI’s positioning and technology stack for the maturing Web3 landscape. It also opens up integration opportunities with the thriving DeFi and NFT ecosystems on the Ethereum mainnet.

The road to COTI V2’s launch remains long and challenging with its intense development schedule and demanding requirements. However, progress like the latest MPC milestone provides promising indicators that the team’s lofty architectural ambitions can materialise into reality.