COTI V2 is a complete overhaul of the COTI protocol - transforming it from a payments-focused Layer 1 into a privacy-preserving Layer 2 on Ethereum. It’s built to enable confidential computation in a trustless environment, using garbled circuits, a powerful cryptographic technique that allows users to compute on encrypted data without exposing the underlying information.
This upgrade positions COTI as a specialized infrastructure layer for privacy-first Web3 applications. From institutional finance to private DeFi strategies, COTI V2 creates a new environment where sensitive logic can be processed securely without sacrificing decentralization.
Here’s what makes COTI V2 different:
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Built on Ethereum: V2 is no longer its own Layer 1. It’s a Layer 2 protocol, integrating with Ethereum for security and liquidity while offering a completely separate confidential computing layer.
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Garbled Circuits as a Service: COTI makes advanced cryptographic operations like garbled circuits usable for real-world applications, no specialized knowledge required.
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Adaptive Tokenomics: V2 abandons the previous fixed supply model. Starting in 2025, token inflation is introduced gradually (starting at ~12% annually) to fund rewards, growth, and development with a declining rate over time.
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Treasury-Centric Economy: The upgraded COTI Treasury becomes the protocol’s economic core. Users can stake COTI, earn rewards, and participate in future governance and revenue-sharing mechanisms.
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Ethereum-Native Interoperability: As a Layer 2, COTI V2 can plug directly into Ethereum-based dApps, tools, and wallets enabling seamless use by existing DeFi users and developers.
COTI V2 is not just an upgrade, it’s a repositioning of the protocol. It reflects the shift in crypto from general-purpose blockchains toward modular, specialized layers that solve specific problems. In this case: privacy.
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