The digital payment industry presently has an annual transaction volume of over $3.265 Trillion, emanating from about 1.6 billion people. However, the industry with this increased number has many challenges and competition, including technical integration, fraud, and chargebacks.
However, neither traditional electronic payments nor digital currencies have offered a comprehensive solution to the challenges of the payment industry. Therefore, the COTI protocol has built a scalable and decentralized payment network that facilitates structured global commerce.
COTI aspires to establish a decentralized payment platform that is trust-driven, prompt, and cost-effective. It combines traditional payment solutions with distributed ledger technologies differentiating itself from other existing payment solutions.
However, you will learn more about this profitable internet currency in the remaining part of this COTI review. The article gives detailed information on the COTI coin, the protocol founders, what makes the protocol unique and secured, etc.
What is COTI (COTI)?
COTI is among the first global blockchain protocols centers on decentralized payments, with COTIPay as its first application. They see it as the first enterprise-grade and fintech platform designed for governments, merchants, stable coin, and payment DApp users.
They also designed it to empower organizations in building their payment solutions, including digitalizing all currencies to save time and money.
The COTI group launched the protocol in March 2017 and the Staking Platform on January 1st, 2020. The protocol targets raising $3 million through a public and private coin offering. They have won the attention of a large community that is dedicated. COTI successfully raised $10 million during their private sale, and COTI Pay is financed with full blockchain integration.
However, the COTI ecosystem is such that it will specifically meet all the challenges accompanying traditional finance. It introduces a DAG-based protocol and infrastructure that is private, scalable, and fast to meet these challenges.
These challenges are fees, latency, risks, and global inclusion. In addition, COTI based its distributed ledger on DAG data structure. This is similar to the IOTA network’s underlying technology.
More so, a DAG-based blockchain, multi DAG, Global Trust System (GTS), and a payment gateway make up the protocol’s ecosystem. It also contains a universal payment solution and a proof-of-trust consensus algorithm.
Using the DAG (Directed Acyclic Graph), COTI allows for over 10,000 transactions in a second. This is even higher than what is required. For example, VISA peak hours require about 4,000 t/s.
The Founders of COTI
Samuel Falkon and David Assaraf co-founded the COTI protocol in 2017. Samuel has broad experience in the fintech industry and digital currency, holding various product development and sales management positions. He is the VP of business development at the COTI group and the Chief revenue officer at Paywize. Samuel fo Samuel founded Gil Scott Ltd before joining COTI.
The protocol’s co-founder David Assaraf was a former HSBC internal auditor and Financial specialist. He previously served as an examiner in the credit risk unit of the Central Bank of Israel’s banking supervision department.
David also co-founded Frequants and was a board member at an amusement park before joining COTI. The COTI team consists of 27 hardworking full-time workers laying a detailed structure for the network’s future.
Shahaf Bar-Geffen is the protocol’s CEO, a Serial Entrepreneur, and former CEO of a leading multinational digital marketing firm WEB3. Shahaf has a first degree (BSc) in biotech and economics from Tel Aviv University. Other team members include Dr. Nir Haloani, the CTO, Yair Lavi, the CFO, Costa Chervotkin, the Product Manager, etc.
The COTI Ecosystem
The COTI protocol team designed the network in a bid to provide a decentralized payment platform. The mechanism involves integrating the advantages of both digital currencies and traditional payment systems. The four participants in the COTI ecosystem include node operators, end-users, merchants, and mediators. The protocol is made up of various components as discussed below;
1. The Cluster
COTI distributed ledger runs on a DAG (Directed Acyclic Graph known as Cluster instead of adopting a blockchain-based database. Each of the transactions in a DAG-based network validates two old transactions before they will be confirmed. This increases the confirmation rate of the transactions according to the rising number of users.COTI adopted the DAG idea as it allows them to asynchronously and simultaneously connect transactions.
The following nodes perform the Cluster:
Full Nodes: These nodes are the network’s user gateways. They select sources that new transactions attach to. They allow new transactions access to the Cluster and also perform proof-of-work (PoW).
Double Spend Prevention (DSP) Nodes: The DSP nodes are responsible for tracking transactions to eliminate any possible attacks on double-spending. They ensure the maintenance of the updated Cluster copy at all times. To run a DSP node, you need to deposit a large quantity of the COTI token in a customized multi-signature account.
History Nodes: This node takes care of the Cluster history. You can retrieve the Cluster full account from them. The history servers of the COTI can serve as a proxy whenever the History node is not in operation.
2. The Trust Scoring Mechanism
In this mechanism, an unconfirmed new transaction selects previous transactions for validation to reach the consensus for transaction confirmation. The Trust Scores mechanism is another layer of data that COTI implemented on each user.
To Incentivize Users: In COTI, high Trust Scores are associates with low fees, while low Scores are for high fees. Also, low Scores are associated with merchants who roll reserve requirements.
Determining Trust Scores: The Trust Score of a participant is determined initially by the Document verifications and general questionnaires. They will be automatically updated with time using the following non-exhaustive criteria;
- The user’s activeness, a measurement by his transaction value over a period.
- The number of disputes involving the participant.
- How many dispute that the participant has lost in favor of his counterparty.
- How other transacting counterparts rated the participant.
You can get more details on the mechanisms for determining Trust Scores in COTI’s technical whitepaper. The Scores indicate the participants’ ranking among themselves in the COTI network, determined through their accumulated contributions to the system.
However, the Trust Scores are comparable values plotted on the scale of zero to 100, with 100 as the highest score.
The Confirmation Process involves validating two previous transactions within the same range by each new transaction. They combine to form Transactional sets or Trust Chains as more transactions enter the Cluster. Similar Trust Score thresholds are what characterize the Trust Chains.
The Trust Chain Consensus Algorithm ensures the incentivization of users with high Trust Scores (trusted users) with optimized transaction confirmations. This is on the basis that their Trust Chains reach the set cumulative Trust Score threshold faster.
In simple terms, the transaction confirmation time is directly related to users Trust Scores. The diagram below has the circle (67) in bold as the new transaction better shows the confirmation process. It validates the two transactions within its Trust Score. These transactions are then confirmed via the path of the highest trust within a period.
The path of the highest cumulative trust is bolded in green, while the cumulative Trust Score is bold.
Applying DAG structure alongside the Consensus Algorithm of the Trust Chains, the Cluster reaches a transaction confirmation rate of 10,000TPS. This is higher compared to the Blockchain network that confirms only 20 transactions per second. For example, Visa has an average confirmation rate of 2,000 TPS with a peak rate of about 4,000 TPS daily.
3. The Mediation System
The COTI mediators don’t approve transactions; they are responsible for resolving disputes arising within the system. Mediators are needed when any of the following incidences take place;
- When a user wrongly transfers funds to another user inadvertently.
- Unauthorized charges
- Non-conforming goods and services
- Undelivered goods and services.
If the receiver and sender couldn’t resolve the dispute themselves in these scenarios, the unsatisfied user can call for mediators. Although each of the disputes has several mediators assigned to them, they function independently to provide real-world information regarding the dispute.
After validating the information, mediators cast votes through the mediator client. Finally, they deposit the COTI coins together with their votes and later calculates them.
The system then compensates the participant with the higher votes returning his balance to the rightful amount. Thus, the system rewards mediators consistent with most votes, while those who chose to be malicious will lose all their deposited tokens to the former.
The COTI network takes the following measures to an evenly distributed governance;
Mediator Training and Recruitment: Individuals who intend to become mediators must satisfy certain requirements before onboarding the platform. COTI plans to conduct digital training programs to assist participants in gaining the required knowledge for effective dispute resolution.
Prevent Collisions: COTI has an algorithm designed to route mediators that have the slightest possibility of colliding with each other. The system penalizes mediators found in engaging in all forms of collusion.
Merchant Rolling Reserve: This risk management strategy protects banks and payment service providers from loss emanating from chargebacks. Traditional payment systems like PayPal primarily adopted it. From his Trust Scores and turnover, they calculate the value of a merchant’s rolling reserve requirements. This value should be lower compared to the existing payment networks.
All transaction done by merchants incurs a rolling reserve fee in COTI coin reserved for some days. At the end of the rolling reserve term, the merchant receives back his fund into his account. Merchants who didn’t pass the rolling reserve requirements won’t sell their goods and services within the network.
4. A Native Currency (COTI)
COTI created a native currency that powers the network and influences interactions among merchants, consumers, node operators, and mediators. The COTI native token will serve for the following purposes;
Merchant Rolling Reserve: All funds in the network are in COTI coins; they accumulate automatically in the merchant’s account within a definite period.
Mediation: Payouts and Stakes in the system are made in COTI native currency. Hence, whenever mediators wish to carry out mediation tasks, they need to hold COTI coins.
Medium of Exchange: A token that will be used to make and receive payments in the system. COTI network allows for multiple digital and fiat currencies. Users are incentivized to chose the COTI coin over other cryptos. It has approximately zero transaction fees and numerous benefits as a payment option.
Node Operators Incentives: Node operators receive incentives in COTI coins. They are required to hold some before validating a node activity.
Fees: COTI coins are used to settle all fees in the network’s ecosystem.
5. COTI’s Currency Exchange
COTI aims to offer an easy payment solution; it creates a currency exchange that allows participants access to liquid markets. The protocol’s new currency exchange will include both fiat and digital currency pairs. This will enable end-users to transfer their currency holdings to other options without withdrawing them from COTI’s wallet.
More so, the exchange will permit network users to receive and pay funds directly in any currency of their choice. This is no dependent on the preferred currencies of their counterparties.
Security: The COTI exchange uses Transport Layer Security (TLS) 1.2, which uses SHA256 keys to encrypt end-to-end traffic. It also secures all dormant data (data-at-rest) with AES-256 encryption. Each of the process steps existing in COTI currency exchange is transactional. Hence, the entire step fails once any part of a process step in the exchange fails.
6. Decentralized Governance
COTI network offers voting rights via its native coin to all holders in the network. They vote for changes in the network and decide on the future of the COTI token.
What Makes COTI Unique?
The COTI platform is the major thing that distinguishes the protocol from its counterparts. It helps companies save data, time, and money by allowing them to create fintech products easily.
COTI Pay can process online and offline payments with stable coins, cryptos, native coins, and credit cards. It adopts a built-in funding model with interest from loans and deposits, connecting to the white label payment platform. They refer to the white-label payment network as users or merchants network. Users that freely make transactions across a digital wallet.
COTI is known as the first global network designed to create a stable coin with stable prices. Hence, users can issue their stable coins and have control over their data and money.
After launching COTI main net, ERC-20 tokens are converted to tokens issued on the network’s transaction ledger. Before the launch, the ERC-20 token was initially issued for the sole aim of having a legal record of all the sold tokens.
COTI has a total limited supply of 2billion tokens during the network’s formative stages. Therefore, it’s impossible to create additional COTI coins following the genesis block. This is due to the network’s decentralized nature and the DAG structure. Hence, they will create and lock additional 2billion COTI coins in reserve; the maximum supply now becomes 4billion coins.
The protocol won’t release these tokens before the launch of its main net, and they will be strictly restricted. However, as stated by the team, the protocol may introduce more token sales from the token reserve.
COTI Price Data
COTI has a circulating supply of 868,672,118 COTI coins and a maximum supply of 2million coins. It trades at $0.3483 with a 24-hour trading volume of over $397 million, and it has a market cap of over $349 million.
You can currently trade COTI in the following top exchanges Bitcoin.com Exchange, Binance, Coinbase Exchange, KuCoin, and HitBTC.
What Secures COTI Network?
COTI makes use of hash table data structure which follows a chaining pattern. This implies that the blockchain can ensure the security of the data, including customer’s privacy. The protocol has also made the network secure for traders ( both buyers and sellers).
The network’s ecosystem provides strong cybersecurity measures to confidentiality and data integrity as well.
The protocol adopts a wallet based on React Native Framework, which provides portability and cross-platform functionality.
Conclusion of COTI Review
The COTI review explains the protocol as one of the first decentralized blockchain payment protocols globally. Samuel Falkon and David Assaraf co-founded the COTI protocol in 2017 with COTIpay as its first application.
It launched the Staking Platform on January 1st, 2020, and has won the attention of a large community since then. COTI operates a unique trading platform that distinguishes it from its counterparts.
The protocol has a native utility token known as the COTI that powers the ecosystem. It’s the sole currency used in settling paments as well as in governing the protocol.
COTI has a total limited supply of 2billion tokens and a maximum supply of 4 billion coins and trades as $0.3483 as of writing. COTI had an all-time high of $0.4854 on August 25th, 2021, making it the most rewarding digital currency.
The coin’s present downward trend offers a great opportunity for intending investors as it may rise again. We hope that you found this COTI review informative and worthwhile. However, we also advise that you do your diligence before involving yourself financially, as digital currencies are highly volatile.