KuCoin AMA Series - COTI - Full Transcript
(UTC+8) 17:00 April 22, 2020, KuCoin hosted an AMA (Ask-Me-Anything) session with COTI in the KuCoin Official AMA Group.
The AMA session was composed of 2 sections: 1. Q&A from KuCoin 2. Q&A from audiences. During the last section, we randomly selected 200 participants to enjoy a share of COTI incentives equivalent to 1000 USD.
Introduction to COTI:
COTI is a fully encompassing “finance on the blockchain” ecosystem that is designed specifically to meet the challenges of traditional finance (fees, latency, global inclusion and risk) by introducing a new type of DAG-based base protocol and infrastructure, called the “Trustchain”, that is scalable, fast, private, inclusive, low cost and is optimized for real time payments.
COTI’s products are available as a core, enterprise-grade technology that can be fully white labeled by enterprises.
Official Website: https://coti.io/
Whitepaper: https://coti.io/files/COTI-technical-whitepaper.pdf
Q&A from KuCoin
1. Please introduce yourself.
Shahaf: I’m Shahaf Bar-Geffen, COTI’s CEO. I
am an entrepreneur and was a co-founder of successful companies in my past and have two exits. I have studied Computer Science, Biotechnology and Economics. I’m also a reserve officer ranked Major.
Nir: Hi Everyone, I’m Dr. Nir Haloani, COTI’s CTO.
I’m a math PHD from Israel’s top institute, hold 14 patents, sold a company to IBM and was their head of research.
I was first attracted to COTI mainly because of blockchain’s technological challenges and because it takes a holistic approach to solving fundamental problems in today’s payments landscape.
I was an early Bitcoin adopter a few years ago and maintained small mining networks for experimental purposes. I was looking for the right opportunity to join a company which could tackle the challenges faced by traditional cryptocurrencies and deploy solutions that could be of use and be adopted by the mainstream.
Efrat: Hi everyone and thanks for having us here!
I’m Efrat Bar Lev, and I have been working in the digital media sphere for the past 7 years. I met Shahaf (COTI CEO) while working at WEB3. When he joined COTI as CEO, I was asked to come on board as the VP of marketing and was more than happy to.
2. Could you please tell us about the COTI network and the idea and aim behind it?
COTI is a fully encompassing “finance on the blockchain” ecosystem that is designed specifically to meet the challenges of traditional finance (fees, latency, global inclusion and risk) by introducing a new type of DAG (directed acyclic graph) based base protocol and infrastructure that is scalable, fast, private, inclusive, low cost and is optimized for real time payments - we call it the “Trustchain”.
COTI’s products are available as a core, enterprise grade, technology that can be fully whitelabeled by enterprises.
3. Is there a particular problem, COTI network aims to solve?
As mentioned earlier, the COTI ecosystem is designed specifically to meet the challenges of traditional finance (high fees, high latency, lack of global inclusion, and increased risk) by introducing a new type of DAG-based base protocol and infrastructure that is scalable, fast, private, inclusive, low cost and is optimized for real-time payments.
Our ecosystem includes a DAG based Blockchain, a Proof of Trust Consensus Algorithm, a multiDAG, a Global Trust System, a Universal Payment Solution, a Payment Gateway, as well as a consumer (COTI Pay and merchant (COTI Pay Business) applications.
To delve a little deeper on each component in the ecosystem...
The COTI Proof of Trust Consensus algorithm is a bespoke consensus algorithm that assigns each user on the network a Trustscore and combines it with Proof of Stake to incentivise good network behaviour that results in lower fees, higher payouts and better quality of service as compared to other networks.
The COTI Global Trust System, combined with COTI’s cross chain interoperability, extends COTI’s Trustscore algorithm and allows any other blockchain to use Trustscores to identify malicious actors on their networks, or recognize and reward good actors, greatly improving the safety and security of connected blockchains.
COTI’s world-first multiDAG enables COTI to issue smart contracts on DAG based infrastructure and combine independent DAG clusters into the overall COTI network. This allows enterprises to issue their own coins on COTI in a “Libra as a Service” manner. Coins issued are independent to their own multiDAG cluster while retaining the ability to access all the features of the COTI network.
The COTI coin is used as a fee mechanism on all transactions on the network, regardless of the underlying transactionary currency or DAG cluster. COTI incentivises participants in the network by allowing users to run Full Nodes, who receive a percentage of every transaction processed by their node.
The COTI Universal Payment Solution allows consumers and merchants to purchase and sell goods and services in both crypto and fiat, via the web or through PoS. Crypto payments and settlements are instantaneous while fiat settlement in 35 currencies to bank accounts is near instant.
Merchants can earn interest on stable coins and apply for business loans using the COTI Pay Business app, while users can spend crypto or fiat using a virtual or physical prepaid debit card using the COTI Pay app.
4. What's the current TPS?
10K TPS has been verified and benchmarked internally using synthetic transactions and load simulations executed within our TestNet environment (these tests can be replicated by any user).
We believe that this will result in improved network scalability following our MainNet release and as more users join the network.
In other words, there is a positive correlation between the number of network users and the rate at which transactions are confirmed. So as our solution expands and is adopted, the rate of transactions per second will also increase significantly.
5. Please tell us about MultiDAG, what is it?
The MultiDAG is the first-ever DAG structure that allows token issuance on top of our DAG based Trustchain protocol. This achievement was made possible by combining independent DAG clusters into the overall COTI network. The COTI MultiDAG ecosystem is similar to Ethereum, in the sense that both are common decentralized infrastructure acting as the basis for a multitude of different tokens and smart contracts while utilising one main coin for all fees and staking within their respective ecosystems.
However, unlike Ethereum, the MultiDAG is a series of permissioned instances that allows the token issuer and owner of the individual MultiDAG instance to set their own rules specific to their needs and/or use case. Token issuers on Ethereum are limited by the overall rules and performance of the Ethereum network as a whole, while on the COTI MultiDAG token issuers retain control of their own rules and instances are not limited by the overall performance of the network, allowing for almost limitless instances and tokens to exist without any network degradation. MultiDAG instances still retain the ability to access all the overall COTI network features such as high scalability, low transaction costs, privacy and dispute resolution and whenever a transaction happens on any of the MultiDAG instances, fees are automatically converted between the issued token to COTI’s native coin, increasing the overall demand for the COTI coin and overall network utility.
The COTI MultiDAG is a competitive advantage that allows the COTI network to focus on our primary target of adoption, enterprise clients. Enterprises by their very nature demand a controlled environment that delivers certainty of network availability combined with sufficient flexibility and scalability.
You can read more about our MultiDAG in the article below -
6. Could you please tell us how COTI generates revenue? What is your business model?
Our business model is straight forward: we take processing fees from transactions and our native coin is used as gas to power the network.
Whenever a transaction happens, now or in the MultiDAG future, the merchant automatically converts part of it to COTI native coin, hence increasing the demand. The more transactions, the more demand. At a fixed supply state, this leads to price increases, just like with any other utility like power or gas.
We have also expanded the token utility from just transactions to a whole ecosystem of financing and processing. The UPS runs on our DAG-based Trustchain, which means that all payment processing, whether coming from credit cards or crypto, is delivered and settled using our coin.
We then power financing options, like interest for savings and loans, and this is also based on the Trustchain and Trust Score Nodes to assess risk. It comes down to having new transaction volume originating from fiat payments turning into digital assets and raising the demand for the COTI coin.
Holders of the coin can benefit from the success of the network and can also manage nodes, to actually take some of the processing fee granted to them for their contribution to the process.
7. Why is KYC required?
The COTI network has adopted appropriate AML and KYC procedures to ensure that our network cannot be used to facilitate money laundering or other illicit activity. COTI is inherently non-conducive to money laundering, as any user of COTI’s wallet, exchange or processing solutions must undergo strict onboarding procedures.
Notwithstanding its commitment to AML and KYC, COTI is similarly committed to protecting user privacy and has appropriate consumer data protection mechanisms in place.
Since COTI works with real world merchants, who are bound by legal obligations regarding KYC and AML, we have ensured that our network meets the most stringent of requirements so any client using our network can be confident they are compliant with any KYC or AML legislation in their particular jurisdiction.
This approach speaks to our overall approach when it comes to adoption. COTI is not looking to replace current payment networks right here, right now. Instead, we’re looking to co-exist and compliment existing payment solutions, as demonstrated by our ability to process credit card transactions on our network, while also offering the benefits of both blockchain and our blockchain in particular, scalable, fast, private, inclusive and low cost.
We feel this approach is the best one for actual adoption of blockchain products. You can read more about our approach to adoption in the article below -
https://medium.com/cotinetwork/coti-the-path-to-adoption-2dd9c6dc2b7f
8. What staking programs are available and what are the rewards?
We’ve actually just introduced COTI's much-awaited Staking 2.0 model!
The recent and continual growth of our network and processing volume has allowed for better than expected rewards for our current node operators and stakers, while also presenting an opportunity to grow our staking program even further.
Staking 2.0, with increased staking volume and participants, is planned to be launched in May 2020. Early-Registration is Now Closed and has been a Huge Success! https://docs.google.com/forms/d/e/1FAIpQLSdWtmbTPbk0DuGW7Ww8k3rrS_3EIEqdU0WPZQFNHS8mFpyfzQ/viewform
January-March staking rewards have been successfully distributed and were higher than expected for COTI’s stakers with a high rate return of around 50%:
We were excited to open the registration to our first exchange-based staking program with KuCoin. The first plan that has been chosen is the Pool-X program which enables KuCoin users to stake via KuCoin’s wallets while earning COTI coins (18%-25% annual rewards). Along with the POL, the total rewards are super lucrative for the COTI Pool-X stakers, as you can see in the example below:
We were amazed to see the demand for the campaign that has reached its cap within less than 5 minutes! The first pool of COTI-90 filled up in less than a minute after the subscription started! COTI-30 filled up in less than 3 minutes!
Congratulations to all those who successfully got into the staking program.
9. Please tell us about the current partners of COTI?
Our Cardano (ADA) partnership is a big deal and a great vote of confidence in our tech. We were chosen to build AdaPay and have recently completed the solution. There has already been some promising feedback about it, including an article associating ADA’s value increase by 24% after the release of AdaPay ().
COTI and Cardano -
We have received more requests from well known projects and brands to build their solution and we’ll announce more of it in the coming weeks and months.
We also have a key partnership with Simplex, the same company that provides Fiat to Crypto processing to Binance, KuCoin, BitMax, and others. This partnership allows us to build a bridge to traditional finance and build an even more robust universal payment system.
COTI and Simplex -
We have a Defi partnership with Celsius Network, one of the leading crypto banks that allows our users to gain interest for their deposits.
COTI and Celsius Network - http://medium.com/cotinetwork/coti-and-celsius-network-form-a-defi-partnership-6f2d7da5bd5b
We have also announced the deployment of our global trust engine on Chainlink.
This will add support for trust-based events in smart contracts, enabling user incentivization in line with a predetermined trust score threshold.
COTI and Chainlink - https://medium.com/cotinetwork/coti-is-deploying-its-global-trust-system-gts-on-chainlink-e440a30eab27
We keep a close relationship with other DAG based protocols like DAG (Constellation).
COTI and DAG -
Lastly, we have received both an investment and strategic partnership from Recruit Japan, the biggest internet conglomerate in Japan, to help us penetrate this promising market.
COTI and Recruit -
You can learn a bit more on our partnerships in the article below -
https://medium.com/cotinetwork/everything-you-want-to-know-about-cotis-partnerships-cd4a02a9433e
10. What sort of merchants are you aiming to? What sort of volume do they process?
A: It makes more sense for us to focus on mid-size merchants that process several million of USD a month and to take some share from that, rather than speaking with hundreds of merchants that are smaller and process tens of thousands of dollars.
It also makes sense for us to focus on merchants that need us most, specifically merchants that are considered “high risk” and pay the highest fees. These merchants are the ones that need a solution like COTI the most, so it’s an easy sell to them. They’re mostly in lucrative industries who process huge volumes, so that works well for COTI as well.
We’re targeting some of the “bigger fish” early on to expand the processing volume on the network significantly before we move onto the “smaller fish”.
11. How does the increased volume on the network affect stakers and your staking program?
it has a great effect as all transactions are mirrored on the Trustchain and so this increased volume will mean hundreds of millions of extra COTI being processed, growing the fees and the rewards to all stakers. It’s going to be very big in that sense.
Remember all transactions processed by a node result in a fee that is paid directly to the node owner, and/or their stakers There’s a direct relationship here.
12. What are the advantages for merchants over traditional payment networks?
A merchant would prefer COTI Pay to his traditional solution because COTI gives him everything that he gets with his previous solution (like credit card processing) but adds some very important benefits like INSTANT payment, low transaction fees (sometimes 90% cheaper), Defi based Savings account and global access to the underbanked.
When compared to a crypto processing solution, like BitPay, we offer a complete solution by allowing credit card processing, which is most of the merchant’s business and access to loans and savings. We are the only true universal solution out there.
With regards to other blockchain based solutions, COTI’s specialization grants it a unique position in the market as the first blockchain optimized for payments and stable coins. Other infrastructure projects are not suited to address the shortcomings of both traditional and digital payments.
| COTI | Bitcoin | Ethereum | Stellar | Ripple | |
| Consensus mechanism | Trustchain protocol DAG - PoT | proof of work (POW) | proof of work (POW) | Stellar Consensus Protocol (SCP) | Ripple Protocol Consensus Algorithm (RPCA) |
| Transactions per second | More than 10,000 TPS | 3.8 TPS | 15 TPS | 3000 TPS | 1500 TPS |
| Transaction fees | Near zero fees | 0.5$ | $0.11 - $0.39 | Near zero fees | Near zero fees |
| Scalability | Unlimited scalability | Very Bad Scalability | Bad Scalability | Good scalability | Good scalability |
| Network architecture | Decentralised | Decentralised | Decentralised | Decentralised | Centralised |
| API/dApps support | Yes | No | Yes | Yes | Yes |
| Privacy | Several Layers: - Full privacy - one time address - Partial privacy - Multi address | Partial privacy - Multi address | Partial privacy - Multi address | Partial privacy - Multi address | Partial privacy - Multi address |
13. What’s on the horizon for COTI and the team?
A lot :)
Earlier this month, we released COTI’s tech roadmap for 2020, you can read more here - https://medium.com/cotinetwork/cotis-tech-roadmap-for-2020-34a74697b3da
As you can see, there are a lot of upcoming events and releases for COTI over the next 6-9 months.
Some of the highlights from our tech roadmap are -
1.Staking 2.0 launch is right around the corner. Users will be able to stake more, through our wallet but also from exchanges. In addition, more MainNet nodes will join our network.
2.Future releases of the COTI Payment Gateway will also include support for Credit Cards, ETH, USDT, USDC and other popular cryptocurrencies.
3.The COTI Pay app for consumers will be released.
4.Features for COTI Pay Business will be added.
5. We will be launching the GTS (Global Trust System) which will allow analyzing BTC wallet addresses and classify them into risky and non-risky categories.
6.Exciting new partnerships and liquidity venues are to be expected.
14. What are your future goals about COTI?
We have just presented our roadmap for 2020. Our long term goal is to facilitate Money Over IP. We’d like to do for money what email has done for the postal service.
The way there is through great technology, which I'm sure we have, and with adoption by the masses. We believe the way to the masses goes through acquiring partners with access, like enterprises and popular protocols. We have achieved success in that and work tirelessly to achieve more. This means that you can expect from us to share a constant stream of tech updates and business updates.
Free Ask
1.Why does COTI use the Proof of Trust consensus algorithm? So what are the special advantages of PoT compared to other consensus algorithms such as PoW.?
COTI has developed a new approach to achieving consensus between transacting parties operating on a DAG-based data structure. The Cluster is a ledger, or a record of all transactions in the network, which is based on a completely decentralised DAG that is not stored by any central authority. The Cluster achieves scalability through its use of parallel source selection and confirmation of transactions, as well as its use of COTI’s Trust Scores.
Each transaction in the Cluster receives a Trust Score equal to the sending account’s Trust Score. A transaction’s Initial Trust Score is used to define the unvalidated transactions (sources) which will be validated and referenced by the transaction, as well as the amount of PoW that should be performed prior to transaction attachment.
The Trustchain Algorithm makes use of the cumulative Trust Score to achieve consensus on whether a transaction is confirmed or not. A transaction is considered confirmed if it is the starting point of a Trustchain that has a cumulative Trust Score exceeding the pre-set global confirmation threshold.
In practice, we consider the longest (highest trust) Trustchain starting from each transaction and compare its cumulative Trust Score to the threshold in order to determine if the transaction has been confirmed. Because the Source Selection Algorithm tends to connect transactions of similar Trust Scores together, Trustchains generated by highly trusted users will mostly contain transactions with high Trust Scores. The cumulative Trust Score of such a Trustchain will grow quickly past the threshold and achieve consensus. This means that highly trusted users will enjoy faster confirmation times and high transaction throughput.
2.What are the benefits of buying and holding COTI?
1. HODL to enjoy incentives
2. HODL to enjoy increase demand of the token
3. Run a node to take profits from all transactions
4. Staking for profits
5. Very low market cap for such a superior technology (such market cap is an opportunity)
6. High scalability for the long term (DAG)
3.How is your next planing about this project?
1. Staking 2.0 launch is right around the corner. Users will be able to stake more, through our wallet but also from exchanges. In addition, more MainNet nodes will join our network.
2. Future releases of the COTI Payment Gateway will also include support for Credit Cards, ETH, USDT, USDC and other popular cryptocurrencies.
3. The COTI Pay app for consumers will be released.
4. Features for COTI Pay Business will be added.
5. We will be launching the GTS (Global Trust System) which will allow analyzing BTC wallet addresses and classify them into risky and non-risky categories.
6. Exciting new partnerships and liquidity venues are to be expected.
4.When will corporations stop being afraid to use blockchain? Do you want to be a leader in the mass adoption of this technology?
Corporations do you use blockchain these days. VISA and IBM, for example, have a lot of patents around the technology. What they don't use is cryptocurrencies.
Corporations are looking for predictability. They need their technology to not be sensitive to market volatility or decentralized governance, for example. It conflicts with a lot of cryptocurrencies.
So, in time, we'll see enterprise grade solutions that are distributed but not decentralized, that uses blockchain when the technology offers an advantage. I predict, and steer COTI, towards payments and loyalty, as this field is both lucrative and ripe for a change.
5.Do you have in mind to release a debit card soon? Do you have a date?
Our COTI Pay card is planned for Q4 2020. The supporting partnership for this is already in place and we’ll release the COTI Pay card once our supporting consumer app is released in Q3.
As part of the COTI Pay consumer app, consumers will be able to apply for a virtual debit card which allows the user to top out their card with a cryptocurrency of their choosing within the app, and then use that virtual card either online or at a physical retailer (using NFC/Tap and Go).
Users will also be able to apply for a physical debit card as well however we expect most clients will utilise the virtual card, as it is quicker to issue (almost instantaneous via the COTI Pay application).