One of the new cryptocurrency projects within the digital payments sector is Coti, a cryptocurrency project focused on offering a fast, secure, full-compliance (KYC and AML) and service-oriented digital payment infrastructure, which works thanks to Directed Acyclic Graph (DAG) technology that allows it to offer a high level of scalability, rivaling centralized payment networks such as Mastercard and Visa.
Coti seeks to become a cornerstone of payment systems, offering a high-speed network with low fees and the ability to support unique DApps and services within its network, without fear of inflated fees, complex implementations, high power consumption and counting. with a rapid integration capacity with existing services and applications.
Origin of Coti
Development of Coti began in June 2017, at which time Greg Kidd and Nimrod Lehavi began outlining the development of this cryptocurrency. Initially, Coti began its development as part of the Ethereum network, being an ERC-20 token within this network.
However, Ethereum's problems, especially its scalability, led its founders to consider the need to create a completely different network. A network tailored to your needs and with better capabilities to evolve in the future. It is there when its creators decided to take a different path from that of blockchain technology. This in order to avoid these and other limitations that could hinder the scalability and development capacity of Coti. This is how the development of Trust Chain would begin. This is a technology that sought to use the capabilities of Directed Acyclic Graphs (like what we see in Nano), to create its own network with unique capabilities that would serve to support Coti and the network of services that it planned to create.
The first step in this direction was taken in 2018, when the white paper "The Trust Chain Consensus" was presented. In said technical document, the future of Coti and its new consensus protocol, the PoT or Proof of Trust, was clearly explained. From that moment on, the Coti development team began working on making this vision a reality and it was not until June 2019 that Trust Chain 1.0 was released.
The continuous development by the Coti team allowed that, by June 2021, the development of Trust Chain could present Trust Chain 2.0, a more complete and extensible version of the protocol that brought the project to life. Since then, Coti has been a project in constant evolution and development that seeks to position itself as a top-level Fintech, both in the CeFi world and in DeFi.
How does COTI work?
As we have mentioned, the operation of Coti initially depended entirely on Ethereum, since it was an ERC-20 token. However, since the creation of the Trust Chain network, Coti is able to run on top of its own network. This has allowed Coti to go from the scalability of Ethereum (around 15 TPS) to having a maximum theoretical capacity of around 100.000 TPS. And, all this, thanks to the use of the Trust Chain. In this way, Coti seeks to position itself as a first-rate option for building CeFi and DeFi applications that require great scalability and handle a high volume of concurrent users.
Of course, all this is possible thanks to a unique technological stack, among which we can highlight:
Base Layer, the foundations of Coti
The Base Layer or Coti Base Layer is built on a network of nodes choreographed by the Node Manager. These nodes are the ones that manage the Coti distributed ledger through a DAG. The reason for choosing a DAG over blockchain is that they do not have as many scalability problems and their parallelization capacity is unparalleled.
In this way, networks based on DAG generally offer better performance and conditions for the generation of applications that need speed and scalability for their operation. All this without sacrificing network security. Thanks to DAG, Coti is able to run on a network that meets all these points, being an ideal environment for the development of a payment protocol and services linked to it.
Of course, the Base Layer is much more than a DAG represented in the Coti nodes. A series of protocols and basic services of Coti also fall on this term. For example, one of the developments still underway on the Base Layer is the decentralized KCY layer. The idea is to integrate a decentralized KYC system in Coti that allows the review and verification of the necessary documentation for the use of the CeFi and DeFi services that will make life in this network.
Proof of Trust (PoT), a reliable validation test
Now, the fact that Coti uses DAG technology does not exempt it from using a security mechanism. One that helps the nodes of the network to maintain a verification and validation mechanism of operations within the network. This in order to guarantee your safety at all times. This role normally falls to protocols like Proof of Work or Proof of Stake. But, in Coti, this process is done by a protocol known as Proof of Trust (PoT).
Proof of Trust ensures that all nodes in the Coti DAG have an exact and verifiable copy of the DAG and its state at all times. To do this, the nodes that make up the network take the operations and organize them in sequence one after the other. Thus, each new transaction can only be recognized once the previous ones have been verified. Of course, this verification is what establishes the link between them, and only then can the new operation be validated. This validation process uses the history of operations in a very similar way to what Bitcoin UTXOs would do, being able to establish direct links between previous and future operations (relating inputs and outputs).
Now, those in charge of linking these operations are the Coti network nodes themselves, and this is possible through the Trust Score. This is a measure of the reliability that a node can have within the network. Thus, since the higher the Trust Score, the more reliable its verification work is, this offers greater probabilities of being chosen as the node to verify a set of given operations. This is possible because each user and node in the cluster are ranked according to their Trust Scores, calculated from their historical behavior and payment statistics.
In this sense, the Trust Score works as a staking system that will be used by the network selection algorithm. Thus, when a user initiates a transaction in COTI, the source selection algorithm will randomly assign two validation nodes with similar Trust Scores. In this way, transactions are confirmed quickly and their status is replicated in the rest of the network. This is due to the parallel and asynchronous operation that DAG networks have. In short, a verification in the Coti Trust Chain is very fast: in about 5 seconds the operation can reach its purpose and be successfully verified.
The system, of course, also has protections to prevent different attacks such as double spending or the Sybil attack. So Coti is a network duly protected against this type of malicious action.
MultiDAG, the largest development point of Coti
Coti is intended to function as a multi-layered ecosystem, in what is known as COTI MultiDAG. This is possible because Coti configures the network to allow the creation of different DAGs. Each of these DAGs has its own history and status. In this way, for example, if a smart contract is generated, its data will exist in its own DAG. Of course, the network uniquely maintains all these DAGs within the nodes, but their processing occurs separately. In this way, Coti aims to maintain histories and states that can be separated to generate tools on top of them. This situation simplifies the logic in the design of DApps on this network.
For example, it is possible to make a DAG for the USDT token and have it keep all the history of its operations. In that sense, the Coti APIs and SDKs can be used to access and generate applications that only relate to the USDT DAG. In this way, operations can be carried out with this token in a very simple way.
However, there is still a long way to go in this regard, since Coti's smart contract capabilities depend on MultiDAG, and this is a function that is not yet implemented on the network, which limits the reach of the network.
What is the COTI token?
The COTI token is the native token of the COTI ecosystem and is also the name of the ERC-20 token, which is available on the Ethereum network. The COTI token on Trust Chain is a native cryptocurrency. Therefore, your history can only be viewed by block explorers on this network. While the ERC-20 token can be seen on Etherscan. At the moment, the issuance of Coti is limited in both Trust Chain and ERC-20, to 2 billion tokens.
In the Trust Chain network, the COTI token is the token for the payment of operations. In the future, it will also be the fundamental basis for on-chain governance, the generation of new tokens and the interaction with the Smart contracts of the network.
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