Web3 development leader COTI and COTI Foundation announced today key use cases that will be the core focus for this round of the COTI $100 million Development Fund, to be allocated in COTI tokens. The selection process will be open to all developers and will encourage them to explore and build data-secure applications that have not been practical without the use of Multi-Party Computation (MPC).
The first to successfully demonstrate on-chain garbled circuits, the COTI V2 ecosystem will deliver transactional confidentiality to Ethereum in a solution that is 250X lighter and up to 1000x faster than other privacy-preserving solutions on the market. The ability to keep data secure while using it for verification and computation—especially at this scalability—creates new use cases for not only Web3 applications, but Web2 industries as well. The COTI Foundation will be bolstering the growth of its ecosystem with a rewards program along with the development grants to fund the most critical development areas.
The technology behind the COTI privacy-centric design, garbled circuits, is a form of Multi-Party Computation (MPC) that allows different parties to cooperate and perform a computation using private information from each party. However, the method keeps this private information encrypted throughout, allowing the computation to complete without ever exposing the data to other parties.
This technology creates use cases never before possible on Web3 as it provides unprecedented privacy while allowing for trustless transactions with other parties around the globe. Keeping sensitive data secure is the default for most Web2 applications, but is much more difficult on Web3’s public ledger architecture. Garbled circuits allow the data to provide both verification and computation while staying encrypted throughout.
COTI Founder and CEO Shahaf Bar-Geffen said: “Since the announcement of the COTI V2 in December, we have seen huge interest in the space about the potential that Privacy-Centric innovation offers to Web3.
Having recently achieved our first milestone of integrating GC into the blockchain for the first time, we are pleased to present a clear vision and an open call to all blockchain builders and thinkers to join the COTI ecosystem, starting with our upcoming Devnet.”
The launch of the COTI V2 Devnet will allow developers to experiment with the technology, bring privacy to existing applications, and innovate by creating brand new use cases. Development teams can submit proposals of their ideas, and the most promising and innovative projects will earn grants to accelerate their successful implementation.
The COTI V2 ecosystem opens up use cases across a number of different areas, strengthening existing products and services while creating new ones.
DeFi has transformed how the industry views finance and its possible uses. However, the on-chain transparency has also created an uncomfortable compromise of privacy. COTI V2 has the ability to bring the next billion in TVL to Defi with confidential transactions which allows decentralized apps to offer new products and services, but also greatly increases both the privacy and security of services they currently offer (all while still being able to maintain regulatory requirements like KYC).
The platform’s privacy features also help protect against one of the longest-running “exploits” in Ethereum DeFi: Losses from MEV. With encrypted DeFi transactions, MEV bots and scammers do not have the information needed to frontrun transactions and profit at others’ expense. COTI V2 includes a completely native MEV protection mechanism.
Dynamic Decentralized Identification and confidential transactions open up new avenues for both Web3 and existing Web2 platforms. Without garbled circuits or some other type of advanced MPC, the necessary actions of verifying an identity or critical pieces of a transaction greatly reduces what can be accomplished across organizations unless privacy is compromised. Traditional banking interacts globally using encryption, but all involved end parties then have access to this sensitive information.
COTI V2 allows all identity verification and personal information to be shared, calculated, and stored, but without revealing the actual data to other parties. The user stores their own data, is fully able to comply with KYC requirements, but doesn’t have to give away their information.
At the same time, dApps will be able to interact with digital identities and query them on specific insights (e.g. Is the user an EU citizen? Is the user over 18 years old?). All of this happens with no specific, private information being shared between parties. The result is countless applications for both Web2 and Web3 to create trustless environments where parties can interact globally in a fully regulated environment, all without compromising their sensitive information. This will open entire new sub-industries for global services.
Data management is playing a stronger role in daily life, creating new opportunities for data brokers, and advertising applications, but if the data is not protected it can be at the expense of customers. COTI V2 creates the ability to store data on-chain in an encrypted manner and then allow others to query this data in a confidential manner. This can be valuable for analyzing sensitive information such as medical records without compromising patient confidentiality. With the COTI V2 model, data can be safely shared across sites that today would scrape and sell the data. Large language models (LLMs) like ChatGPT utilize vast amounts of user data to provide more services and knowledge to its customers, but may violate both user privacy and company IP. However, with COTI V2 these models could do so in a way that doesn’t violate the privacy of those whose data it uses. As more lawsuits are filed against LLMs, innovations using COTI V2’s garbled circuits will be a necessity.
About COTI
COTI V2 is a Privacy-Centric Ethereum Layer 2 that utilizes revolutionary technology to facilitate privacy across Web3 applications. Following a breakthrough in the cryptographic protocol known as “Garbled Circuits”, COTI V2 introduces a faster and lighter privacy solution that can be operated on any device, opening up a whole new world of use cases, including privacy wallets, DEXs, governance, and more.
This post was last modified on Feb 28, 2024, 15:23 GMT 15:23