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Cardano Ecosystem

COTI

01/17/2023

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COTI: Our Plans for 2023 and Beyond

2022 has been a turbulent year in crypto, but the fundamentals remain the same. COTI was born during the 2017–2018 cycle and our DNA was forged as builders during times of distress. We’re in this for the long run.

COTI: Our Plans for 2023 and Beyond

The collapse of Luna, Celsius and FTX has forced us all to introspect and build towards a future that is more decentralized, transparent and fair. This also means that builders in the space will need to adjust to some form of regulation and oversight.

COTI has always kept a leveled and prudent approach when it comes to compliance and will continue to do so. Even more so, in 2023 we will build tools for other developers to allow them to build towards a regulated future.

New Layer 1s were launched in 2022. We believe in a future where a few general purpose public Layer 1s like Ethereum, Cardano, and Solana will coexist alongside Layer 1s that derive their value from being optimized to specific use cases — like COTI.

COTI has positioned itself as an enterprise grade Layer 1 that is uniquely optimized to solve challenges around payments. This, coupled with our prudent regulatory approach, has allowed us to build products like COTI Pay that serve enterprises, enabling them to build private payment networks. It also allowed us to partner with Cardano to launch Djed, a unique over-collateralized stablecoin. You can read about COTI’s 2022 year in review here.

In 2023, we will continue to gain more traction with more enterprises, utilizing our Tech 2.0 stack, and issuing new enterprise tokens on our network. We will also push for the adoption of Djed towards becoming the dominant stablecoin on the Cardano network.

Our ecosystem of $COTI and $gCOTI holders will continue to benefit from the network’s success by engaging with our Treasury app. In 2023, we will introduce Treasury 2.0, with new and innovative features geared towards the growth of value captured.

While we continue to dig our technological moat even deeper, we plan on expanding. This will come both by completely revamping our protocol towards its next evolution, allowing COTI to be the Layer 1 chosen by developers to build dApps that can meet regulation and compliance rules.

Our goals for 2023:

Watch Shahaf Bar-Geffen present our plans for 2023 and beyond:

 

COTI Pay and Enterprise Growth in 2023

On the enterprise front, this year we introduced MultiDAG 2.0, Bridge 2.0, our CMD token standard, and new CMD tokens brought into the COTI ecosystem — all operating under the 2.0 tech stack. We believe COTI is uniquely positioned to serve enterprises who can launch their own Private Payment Network (PPN) — something that no other Layer 1 can deliver.

There are a number of reasons why COTI is well placed to meet the needs of enterprises. For one thing, we have unique technology in the form of a DAG-based protocol that allows scalability and instant settlement while remaining secure.

COTI is also regulation-ready. We work in a prudent manner, and have been performing KYC/AML checks since inception. We also offer a turnkey solution to enterprises that can be white labeled with products such as custom-branded tokens, wallets, website integration, processing gateways and more.

COTI’s Private Payment Network (PPN) offering includes:

  • Issuance of a CMD branded payment token
  • Issuance of a CMD branded loyalty token
  • Branded wallet (standalone or hosted in the enterprise’s app)
  • Bridge to other networks, offering the widest possible reach
  • Payment gateway for users to send money to the network

Our business development teams engage with suitable enterprises around the world and offer them all the benefits that come with a PPN. These deals, by definition, are slow cooked. However, we expect to announce a few of them during 2023.

Treasury 2.0 and gCOTI

COTI’s Treasury was introduced in 2022 and became an immediate success. It combines the best of DeFi and COTI’s previous staking programs and offers a capital efficient and flexible system where users can deposit any amount of $COTI and be rewarded for their participation.

Since its launch, the Treasury has grown rapidly with more than 490M $COTI tokens deposited to date, capturing over 44% of COTI’s circulating supply. This TVL also stands out when compared to other Layer 1s.

The Treasury is now a major pillar in the COTI economy and in 2023 we will take it to the next level, by introducing Treasury 2.0.

Today, the only upper boundary of growth and profitability of the Treasury is the fact that only $COTI native tokens can be deposited. To fulfill its full growth potential, the Treasury, for the first time, will allow new tokens to be deposited and locked within it, growing the overall value it captures and introducing new use cases.

The Treasury enhancements and additions will not only increase the benefits to current Treasury participants, but will also allow COTI to extend the reach of the Treasury to other network participants and token holders.

Coupled with the introduction of $gCOTI, COTI’s Treasury governance token, the Treasury app will make a giant leap forward during 2023.

Treasury 2.0 design:

Treasury Reserve Fund

The Treasury Reserve Fund is a new component added to the Treasury ecosystem to better support the Treasury’s sustainability and stability. The Reserve Fund is essential to efficiently manage liquidity and its redistribution model internally/externally and will allow the Treasury to expand the services offered.

The Treasury Reserve Fund will become the component that collects fees from all Treasury components and will hold $COTI tokens and use them to maintain its reserve. All funds circulating in the Treasury will either be distributed by the Treasury Reserve Fund or sent to it to maintain its liquidity and to incentivize Treasury participants, as well as maintain the stability of the Treasury ecosystem.

Treasury Stability Pool

The Stability Pool allows COTI to grow the Treasury’s reach beyond the Trustchain, by allowing other networks to participate in COTI’s Treasury while growing its stability. This pool is funded by Stability Providers, users depositing stablecoins from other networks into it.

Using Bridge 2.0 we can allow the inflow of stablecoins from different types of networks to be deposited in the Treasury, such as USDC, BUSD, USDT, and DJED.

Stability Providers will be incentivized to provide stability by receiving liquidation gains and rewards in the form of $gCOTI and $COTI tokens. As stability providers deposit stablecoins, they don’t incur any market risk while benefiting from a new stream of rewards. We expect this model to be very popular, growing both the value locked in the Treasury and overall market interest in COTI’s Treasury.

Alongside Stability Providers, $gCOTI holders will be able to take part in the liquidation process, thus benefiting from discounted $COTI, as presented in the chart below:

Token Swaps

As the new Treasury will have liquidity of several tokens funded via liquidations and fees, it can offer token swaps to users. Supported swaps will comprise of all tokens that are available in the Treasury Reserve Fund at a set ratio. Each swap will incur a transaction fee that flows to the Treasury Reserve Fund, as presented in the following chart:

$gCOTI

$gCOTI, the Treasury governance token, will be issued in 2023 this year and will be fairly distributed at no cost to loyal COTI community members and Treasury contributors. More details about the launch campaign will be published in the coming weeks.

The introduction of $gCOTI allows Treasury participants to gain multiple benefits from COTI’s Treasury. These include:

  • Governance: raising proposals and voting on matters regarding the Treasury and its functionality.
  • APY Booster: depositing $gCOTI alongside the $COTI deposit entitles the depositor to a greater share of the rewards distributed from the Treasury Reserve Fund.
  • Participation in liquidation rewards and benefiting from discounted $COTI.

Allowing the Treasury to expand beyond the upper boundaries of $COTI, coupled with the development of new innovative concepts, will enable COTI to grow the Treasury and our community. This will be accompanied with continuous upgrades to the locking mechanism, varying the locking periods and adding new functions, as well as new use cases for $gCOTI.

What to expect from the Treasury in 2023? Expect growth in the value locked in COTI’s Treasury 2.0, facilitated by stablecoins from various networks locked in. Also, expect the introduction of $gCOTI and the introduction of Treasury 2.0 which includes the Treasury Reserve Fund and Stability Pool, offering greater rewards!

Introducing COTI V2

MultiDAG 2.0 was the first step in allowing COTI to grow from a network with one native coin to a multi-token network. While we don’t believe crypto needs additional “general purpose” Layer 1s, we do see tremendous opportunities with an innovative Layer 1 that has a unique use case.

In order for COTI to expand and be able to suit a wide range of developers, from independent dApp builders to enterprises, COTI V2 will innovate both on the tech stack level and on the use case level. We will be harnessing DAG scalability with a new, top of the line tech stack to launch what will be the next version of COTI.

COTI V2 will be compatible with other multiple chains and offer smart contracts. A truly compatible and composable Layer 1 will allow COTI to tap into liquidity and development that is already happening on other chains, while continuing to offer its advanced DAG scalability.

COTI V2: an innovative use case

Digital currencies have existed prior to Satoshi Nakamoto’s work, in both centralized and decentralized forms. Reflecting on the movement that it has evolved into, we observe that its novelty was in harnessing the fundamental laws of mathematics to capture what is in essence a political concept — — consensus. It is the ability to unite political thoughts with technology that inspires the imagination of so many in crypto and Web3.

Web3 is a tool; a thought; a movement. Since its inception, this movement has grown considerably, creating both opportunities and crises indiscriminately. This process has brought it to the decision point it is now facing, like so many before it, between idealism and pragmatism.

We choose the latter. We believe that every fraud, collapse, or bankruptcy is yet another hindrance to mass adoption. More importantly, it causes pain and more to very real people. To realize its potential to the fullest, Web3 will have to find its place within the existing political structure instead of trying to topple it.

Not for long will it be able to rely on self-regulation, the goodwill of unknown players, or the digital and financial literacy of users. Instead, it will have to offer a way for existing stakeholders to interoperate within external and enforceable regulatory frameworks. Understanding and accepting this premise is crucial in our opinion for crypto to go mainstream.

The question remaining is, how?. We seek to develop the ecosystem uniting the relevant stakeholders interested in taking part in this endeavor. We envision a programming language that can expressively capture regulatory requirements, together with the tools for regulated bodies to consume the resulting artifacts to ensure compliance with their regulatory obligations.

Hence, COTI V2 will be a Layer 1 that can be programmed to solve just that. We don’t just see this as a great business opportunity; we see this as our duty to the space.

We are fortunate to have a team of veteran researchers and developers, entwined with expert legal and product teams that have vast regulatory knowledge, to be able to build toward this future. We are still very early, but very excited and looking to spark a conversation around COTI V2 and its use cases.

COTI V2 will still remain ideal for payments, but will also dramatically expand its use cases to offer building blocks for those who wish to develop freely in a future that will most likely be regulated.

Aligning COTI emission schedule with COTI’s roadmap

COTI’s emission schedule was updated in 2018 and hasn’t changed much since. We believe that the current token economy and emission schedule should be optimized to better serve the community and support the network’s growth and usability.

For instance:

  • Predetermined fixed vesting schedules don’t match the actual network dynamics, which require a more flexible model.
  • Issuance of CMD tokens on Multi-DAG should require additional incentives and rewards.
  • The token distribution was prepared before the introduction of the COTI Treasury and doesn’t take into account the new utility of Treasury 2.0.
  • Incentives to node operators should be more dynamic.

As such, in order to support COTI’s continuous growth, we have revisited the current emission schedule and adjusted it to include flexible and more attractive rewards to node operators over time, which will assist with further decentralizing the network by growing the number of nodes, which will also need to support the new CMD transactions, and attracting corporate and institutional node operators as well as operators from different networks to increase the network’s efficiency, scalability and resilience.

We intend to outline incentive plans for developers to build upon and grow the COTI network, as well as expand our merchant pools, where merchants pre-purchase large amounts of $COTI to cover gas fees for their user base. Such $COTI is then trickled to node operators in transaction fees and later to the rest of the network. This is strategic and beneficial for the COTI community, as merchants have a stake at COTI and are motivated to grow the network’s economy.

The launch of Treasury 2.0, which will include the Treasury Reserve Fund and the Treasury Stability Pool, as explained above, will lead to the expansion of value captured both from native assets and stablecoins from other networks. As a result, our emission schedule should fit the required native COTI available in the treasury to match such value captured, so that COTI’s market cap will remain higher than the treasury TVL. In addition, we’ll need to align incentives and initially subsidize further rewards to encourage stablecoins deposits and further liquidity.

Also, the upcoming issuance of $gCOTI, the new governance token of the Treasury (and the first CMD token issued on our mainnet), will add further utility to the Treasury and enable the new features. The initial listed pairs of the token will be against $COTI, therefore additional COTI tokens will likely be required to be released to circulation to provide the initial liquidity, similar to the described in the previous paragraph.

In addition to supporting the bridge transactions between the different tokens and chains, and the value captured from other networks, this year we plan to launch $COTI on additional networks like Cardano (similar to COTI ERC20), as such, COTI Bridge will require additional $COTI’s in circulation to maintain the current network status in terms of native tokens ratio.

All the changes above, particularly Treasury 2.0 and the issuance of $gCOTI, will lead to higher value captured (TVL and collected fees) resulting in higher APYs, while the additional nodes, merchants and developers that will participate in the ecosystem will contribute to the growth of the whole economy.

Such changes will be reflected in a more dynamic emissions schedule instead of a rigid predetermined semi-annual one to better align with the growth and natural cadence of the network. While we can’t accurately predict exact emissions and dates yet, any changes made will be transparently reported to the community and reflected in CMC and CG. Please note that additional $COTI that serves as collateral by COTI to new value captured by Treasury 2.0 is not directly circulating, but we’ll adhere to the strictest standards of CMC and CG and count it as such.

In the short term, there aren’t any major changes to the current emission schedule. We expect the changes indicated above to follow the release of Treasury 2.0 and the launch of the new initiatives described above and will continue to evolve in the long term according to the growth of the network and rates of adoption over the upcoming periods, as well as the continuous development of the COTI V2 protocol.

COTI V2, by its nature, infrastructure and growth plan will require new tokenomics in alignment with other Layer1’s. Such tokenomics will include great incentives for developers, node operators and users. We expect such tokenomics to support the growth and expansion of the new network and to enable high adoption rates. We will present these tokenomics and further details in a dedicated white paper in a year’s time .

COTI V2: Summary

We are relentless in improving COTI. We are thrilled to build the new technology stack for it, making it more compatible and composable. After researching and consulting with several regulators, investors, technology experts and other market participants, we’re certain that COTI is building exactly what the market needs.

In 2023, expect the unveiling of COTI’s V2 infrastructure and use case expansion through a detailed whitepaper. This document will be as thorough and methodical as COTI’s original whitepaper, published in 2018. There’ll also be ongoing development updates throughout 2023, describing our progress in building the new infrastructure.

Making $DJED the top Cardano stablecoin

$Djed is a next-generation overcollateralized stablecoin to power the Cardano ecosystem. Since the introduction of Djed in 2021, we have been working alongside the Cardano IOG team to develop Djed. We have already established over 40 partnerships to enable Djed’s proper utilization.

In 2023 we plan to grow Djed’s dominance in the Cardano ecosystem to become the leading stablecoin in terms of market share. We will do so by activating more than 40 partnerships that were already signed and by growing Djed’s liquidity.

Djed will be operated in a very prudent and secure way, making sure that the number one priority remains the safety of its holders. Technical improvement for Djed will continue to roll out, including full Vasil support and Staking through the smart contract.

The entire COTI ecosystem will greatly benefit from Djed, not just by growing the recognition of COTI, but also with a share from the operating fees, which will be funneled from Djed’s reserve to COTI’s Treasury Reserve Fund.

Summary

COTI had an incredible year in 2022, despite everything that happened in the market. We set the bar high in terms of our expectations, and we took great strides towards achieving our vision. As the enterprise-grade Layer 1, we are building our products for the long term. We are going into 2023 with full optimism and ambitions, we will continue to pursue our visionary plans of solving challenges around enterprise payments and more. In 2023, we will launch Treasury 2.0 with its new features and enhancements, as well as introduce $gCOTI. We will also continue to push for the growth of the adoption of Djed across different fronts with the aim of growing Djed’s dominance in the Cardano ecosystem to become the leading stablecoin in terms of market share. In addition, we plan to revamp the COTI V2 protocol, and expand its reach to become the Layer 1 of choice for developers building dApps that meet regulatory and compliance requirements. We invite everyone to join us in what will prove to be an exciting and adventurous year for us.

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