COTI: Keeping Blockchain Data Private on Ethereum

Privacy is a big deal. In the world of decentralized blockchain most transactions are public. Now, there is a need for more privacy.

Launched in 2017, COTI is a Web3 infrastructure development company that has a cost-effective and robust crypto infrastructure which puts privacy first.

COTI has built one of the most unique and feature-rich payment networks in the industry, including a DAG-based base protocol and infrastructure that is scalable, fast, inclusive, low cost, and optimized for finance.

What Is COTI?

COTI deployed Garbled Circuits in collaboration with its partner Soda Labs to create a mechanism that allows multiple parties to perform a transaction requiring private information without disclosing who sent any of the data. In other words – a private transaction.

COTI V2, developed by the COTI Foundation, is a privacy network operating as a Layer 2 on Ethereum. COTI V2 leveraged advanced technology and launched privacy protection to provide fast, scalable privacy on an L2 together with the security and liquidity of Ethereum.

The heart of this protection is a cryptographic technology, also known as Garbled Circuits, which allows users to process transactions without exposing their sensitive information. This technology will not only make COTI’s infrastructure ten times faster and lighter than other existing solutions, but also will open up use cases in various fields such as finance, healthcare, social media, and others.

What Makes COTI Unique in the Blockchain Industry?

Today, the blockchain industry is no longer hamstrung by problems like congestion and scalability, which are a thing of the past after technologies like L2s and Side Chains are operational.

Ethereum will continue to dominate the Web3 space as it enjoys more liquidity than any other blockchain in the industry. Now, with ETH ETFs, ETH will be used by larger institutions.

Unfortunately, the inherently transparent nature of a blockchain has also become an obstacle to its own growth. In fact, Ethereum still has the same problem as all public blockchains, making every transaction, asset, and wallet address easy for the world to see.

Privacy for Layer 2 is seen by many as the next frontier in Web3. It not only involves many aspects that go beyond just concealing information, but it also includes protection, preserving sovereignty, and the ability to decide which data, or with whom you are willing to disclose your information.

COTI created the Web3 infrastructure to solve challenges, particularly handling data on Ethereum. With these tools, blockchain is private, and data is safe.

In addition to allowing some amazing potential benefits to the existing COTI ecosystem, COTI V2 also introduces a novel approach that ensures performance without affecting privacy, using privacy-preserving technologies (PETs) with the main ingredient Garbling Protocols.

Garbling Protocols protect the privacy of each input while still supporting fast computation. Therefore, this makes them useful in scenarios where confidential data needs to be computed but cannot be shared.

In the COTI ecosystem, garbling protocols allow transactions and smart contract executions while the details such as the amount of funds transferred, or the specific conditions of the contract, are kept private between the involved parties.

For decentralized finance applications where transaction confidentiality can be as critical as transaction integrity, this technology becomes particularly important.

In addition, when compared to other existing solutions, COTI V2’s use of garbling protocols takes a completely novel approach, which is up to ten times lighter and performs ten times faster than Zero-knowledge-based solutions without negatively impacting the user experience.

As a result, the technology can run on almost any device and expand the range of potential use cases in the future.

Use Cases For COTI V2

COTI V2 unlocks not only confidential payments but also exploit-free DeFi in addition to other applications. The technology paves the way for a lot of new applications, particularly those requiring high levels of privacy, trust, and secure data computation.

Here are some of the ways it can be used:

  • DEXs: COTI keeps users’ transaction histories private. In addition, encrypted transaction data also helps to minimize loss from MEV attacks.
  • Artificial Intelligence: dApps built on the COTI ecosystem can help businesses process and analyze encrypted data in order to collect insights, but does not expose the data to the dApp service providers.
  • Real-World Asset Management: COTI dApps also allow users to tokenize and trade real-world assets, like real estate, but still keep the identities of buyers and sellers confidential. Not only that, privacy-preserving dApps for supply chains will also allow businesses to verify the authenticity and schedule of products but not reveal any sensitive business relationship or logistics to their competitors.
  • Gaming, GameFi, and GambleFi: With on-chain gaming, users can take advantage of the features provided by COTI V2.
  • Decentralized Social Networks and Messaging Apps: COTI helps to deliver censorship-resistant social media platforms, and surveillance-proof instant messaging while protecting freedom of speech.
  • Bridging: As COTI V2 allows users to store their private keys on various chains, the complexity of bridging in this case can be reduced.
  • Marketplaces: Marketplaces comply with GDPR. They also offer auctions, where bid amounts are kept hidden, and privacy measures for NFT ownership and transfer. As such, collectors can hold and trade digital assets without exposing their investment strategies or tastes.
  • Governance: There are decentralized and anonymous voting applications where the privacy of voter choices is paramount to prevent coercion and to maintain the integrity of the electoral process. Additionally, they also can ensure the confidentiality of DAO members and their voting patterns to protect against undue influence as well as maintain the focus on the merit of proposals.
  • Identity dApps: Users can identify themselves without the need to provide sensitive data and import digital identities from trusted organizations. Eventually, on-chain dApps may even help users prove creditworthiness without disclosing personal financial details, so it may help them access loans without compromising privacy.
  • Healthcare and Legal: COTI offers secure and private storage of healthcare records, allowing patients to have control over who can access their data and can grant permissions without exposing all of their health. Also, smart contracts in this case execute the terms of legal agreements without making the details public to maintain the confidentiality of the parties involved.
  • Central Bank Digital Currencies: CBDCs will comply with anti-money laundering (AML) provisions, anti-terror financing regulations, and systems to counter tax evasion. In contrast, privacy-enhancing digital currencies remove these controls, and are free from social credit implications.

The $COTI Token

The $COTI token holds a central role within the ecosystem to facilitate transactions, secure the network, incentivize nodes, and provide the means to access and utilize the advanced privacy features of COTI V2.

Ecosystem Fund

COTI is supported by the COTI Foundation and its Ecosystem Fund.

The Ecosystem Fund works to incentivize developers, groups, and projects to create groundbreaking and impactful solutions on COTI V2 through a combination of research, experimentation, and the development of new and innovative use cases.

Meanwhile, the Foundation uses the Ecosystem Fund to expand COTI’s ecosystem, strengthen community ties, and enhance outreach.

Currently, the COTI foundation has granted the ABC Growth Fund for ambassadors, builders, and creators, seeking applications from innovative builders, developers, and researchers interested in testing the limits of the COTI ecosystem’s capacity.


COTI is evolving into the future of Web3 to create a rich, developer-friendly ecosystem with a truly revolutionary way of privacy. For anyone or any group, data privacy matters. With the rise of ETH on the global stage, COTI’s tools are a must use in the industry.

With the wallet address, usage history, spending habits, DAO votes and other data points kept private, the world of blockchain is a whole lot safer.