The AMA was held on Kaiser & Shelby Discord channel on April 12th, 2020 at 11:00 am UTC.
Question:
If we may, to begin with, Could you please tell us about the COTI network and the idea and aim behind it?
Shahaf:
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.
Question:
are guys based in Israel? How’s the weather today there?
Shahaf:
We are HQ in Tel-Aviv. It’s spring time now and the weather is sunny and warm. That said, we can only see it through the window…
Question:
If we are not wrong, COTI stands for Currency of the Internet? How did you come up with this name?
Shahaf:
COTI indeed stands for Currency of the Internet.
We have built COTI to support the vision for Money Over IP. A way for consumers and merchants to “communicate” value over the web, without the need for 3rd parties, like banks and payment networks.
This is the grand idea for other cryptocurrencies, but we have built our protocol to support the actual needs for payments (scalability, low fees, privacy, dispute resolution etc) and have built the supportive infrastructure that merchants and users can use.We have white labeled all of our technology so that enterprises can brand and use the tech with their existing user bases.
Question:
How are COTI coins and other tokens issued on the COTI network different from Ethereum tokens?
Nir:
DAG is a more appropriate algorithm than standard blockchain (e.g. Ethereum) as in its data structure instead of adding blocks sequentially to a chain, in DAG we use Direct Acyclic Graph. So, validation of transactions is parallelized which results in higher throughput (TPS) — in any payment platform low throughput is not acceptable. In addition, DAG works differently than the blockchain. Whereas the blockchain requires Proof of Work from miners on each transaction the DAG gets around this by getting rid of the block entirely. Instead, DAG transactions are linked from one to another, meaning one transaction confirms the next and so on. These links are where the term DAG comes from, just like blocks getting hashed are where the blockchain receives its name. Blockchains allow one to track down any record stored in a ledger’s history, but their sequential structure is also what hinders significantly their transaction throughput.
DAG works differently. This data structure resembles a flow chart where all points are headed in one direction. As a blockchain grows over time, nodes will need more and more storage capacity and a higher bandwidth (volume increases) to keep up-to-date with the transactions added to the ledger. This has the potential to become very costly. Other elements include: no data privacy as many blockchains are public and unwanted centralization because of the miners.
A DAG works in depth. This means that every node consists of multiple layers of transactions. When a transaction is registered in a node, it first has to verify two other transactions before the transaction will be verified. Those two transactions are chosen according to their TrustScore. The node has to check if the two transactions are not conflicting. For a node to issue a valid transaction, it must solve a cryptographic puzzle similar to those in the Bitcoin network (Proof of Work). Just two verifications are needed to verify a transaction. This gives the benefit of a drastic decrease in unnecessary verification.
Besides that, in DAG miners are eliminated as well. The only incentive for miners is the reward they get when they’ve mined a block. This can result in conflicting visions and goals between miners and token holders. Within a DAG, the nodes itself become the ‘miners’. This process is also much more lightweight because you only have to verify transactions for the two closest nodes. As miners are eliminated and we validate transactions ourselves, transaction fees are reduced to zero and the required resources for confirming a transaction is also reduced significantly.
Question:
Because you brought up DAG, Please tell us about MultiDAG, what is it? Is there a difference between DAG and MultiDAG?
Nir:
The MultiDAG is the first 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.
Question:
Why do you call it a ‘Multi-Currency’?
Nir:
COTI MultiDAG transactions can be set as “multi-currency”, meaning a transaction on bundle can contain base transactions nominated in different tokens. Since our DAG as a data structure is agnostic to the transaction payload, this means the flow of attaching transactions to the DAG and TrustChain consensus stays the same for MultiDAG. The new MultiDAG bundle structure was defined in a way which gives it a lot of flexibility: — There can be more than one transfer tokens in the bundle (if needed) — so different tokens transactions can be associated with one transaction bundle. — The fees collected by Full Nodes in the network can be paid in any token, based on the definition specified by the Full Node. — The network fee can be paid only in COTI native coin.
Question:
that’s interesting. COTI Truly deserves to be called ‘multicurrency’
Could you please tell us how COTI generates revenue? What is your business model?
Shahaf:
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.
Question:
this is very thought about business model. Hard to beat. Must be generating nice revenue.What are the requirements for any user to create a token on the COTI network?
Efrat:
On the COTI network Issuing a new token does not require coding smart contracts, of any kind nor at any level of network interaction. Any user is eligible to issue his own token over the COTI network as long as he comply with KYC requirements and pay the minting fees for issuing the new tokens. Any new issued token deployment process in the COTI network starts with the token generation process. At this stage, the token creator uses the COTI Financial-Server service to create a new token payload and define the specification for it. This entity certifies and confirms two components:Once the minting operation is executed, the tokens are minted to a wallet address, thus they can be used for transfers or payments for goods and services. The COTI payment solution allows merchants to define which set of tokens are good for the payment and payers can choose from the list.
1.That the desired token name and symbol belong to the token originator’s public key
2.To propagate this data to the COTI network
The total token supply is also included in the payload. After the network is notified of the new token existence, the creator can start to mint tokens. The amount of tokens that can be minted can reach the number of the total token supply. Minted tokens can be credited to any existing address by the minting transaction itself. It is also possible to partially mint the token and only mint as many as the token as needed.
Question:
If KYC is required, doesn’t it means it can be classified as a security token?
Efrat:
No, COTI is not a security token. 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.
Question:
that makes sense and also looks very secure. Could someone tell us what’s the current TPS?
Nir:
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.
Question:
Could you please inform our community regarding the requirements of running a COTI node?
Efrat:
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, and the pre-registration is now open: https://docs.google.com/forms/d/e/1FAIpQLSdWtmbTPbk0DuGW7Ww8k3rrS_3EIEqdU0WPZQFNHS8mFpyfzQ/viewform
Question:
Staking is great definitely. There’s a trend of launching a network’s own debit card, for example Bnb and some other networks have recently launched their own cards. We remember COTI was planning the same last year. Could we expect a debit card from COTI too?
Efrat:
Yes. 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)
Question:
Please tell us about the current partners of COTI?
Efrat:
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.
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:
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 :
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 :
Question:
These are some very major and a lot of already exisiting partners. COTI has definitely progressed huge in a short time! Congratulations on that front!
If we may ask who do you think are your current biggest competitors and how different or better is COTI from them?
Efrat:
In regards to traditional solutions, a merchant would prefer COTI Pay 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.
Question:
Well, COTI looks better than Paypal guys. Shahaf, I can see Elon Musk in the making! What’s on the horizon for COTI and the team?
Shahaf:
A lot :)
Earlier this month, we released COTI’s tech roadmap for 2020, you can read more here:
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 -
- 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.
- Future releases of the COTI Payment Gateway will also include support for Credit Cards, ETH, USDT, USDC and other popular cryptocurrencies
- The COTI Pay app for consumers will be released
- Features for COTI Pay Business will be added
- 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
Exciting new partnerships and liquidity venues are to be expected
And, of course, GROWTH!
Question:
Can you share new information about exchanged based staking? We know it’s planned for May, can you tell us what sort of the COTI’s token will be available for staking? Something exclusive for our community?
Shahaf:
I actually do have some exclusive news for you.
This has just been confirmed. Exchange based staking will gradually happen through all the major exchanges COTI is listed on and with all types of the COTI token, including Native and ERC20. Even more so, it’s going to begin next week!
Question:
This is big guys
Shahaf:
Exchanges usually have a few types of staking plans, some are flexible and short in nature, while some are longer and offer greater rewards. We plan on testing a few of these plans to figure out what is best for our ecosystem.
We have the first plan and the first partner set for next week, we’ll reveal more information early next week if not sooner.
Question:
that is something amazing.
I am sure our other community members has some good things to ask, if we may ask your 10 more mins, we would like to open this AMA section for the rest of the community
Question:
Can COTI share their revenue targets for EOY2020 and EOY2021.
Shahaf:
We have presented our approach to competition above, so i’ll focus on revenue goals. We are already processing a turnover of more than $60M USD / Year. This is awesome but it’s nothing compared to the potential in this business, where companies can process Billions of dollars. We are ramping up thanks to credit card processing and I’ll be surprised if we don’t hit Q4 doing $100M USD pre quarter. COVID19 is a black swan, but the potential is bigger than the virus.
Question:
Which types of Dapps are able to run on COTI Network ?
Nir:
Any payment dapp can be run and used on the network but through our interoperability bridge it is also possible to build dapps which uses our arbitration system and our trustscore mechanism.
Question:
Any news on the Korean exchange listing?
Shahaf:
When we realised Binance is happening, we have delayed the Korean exchange to not mix two listings. Then COVID19 happened and Korea went silent. But… We’re back to track with it and we’ll be able to update about soon.
Question:
Can you tell us about #safety #protocol you will use to save our #funds from any hack?
Nir:
In COTI Trustchain protocol security is achieved by introducing DSP node and applying trust to every participant in the network. DSP (double spend prevention) attacks are not possible at all — so we are much safer than any existing blockchain protocol. To mitigate DSP risk, COTI deploys dedicated Double Spend Prevention (DSP) Nodes. These nodes carry out additional transaction monitoring without affecting the network.
the PoT (Proof of Trust) employed in COTI infrastructure required to validate each transaction in COTI, limits the number of transactions that an attacker can send. In the rare event where an attacker is capable of making so many small transactions, the account’s Trust Score will decrease, causing an increase in the PoT required to create new transactions and by that blocking such an attack very quickly.
Question:
I read on COTI website that you guys currently only accept merchants with more than $50k revenue/month, do you plan to lower this number in the future?
Shahaf:
I wish we could do so in the future. Focus is key and so we focus on actions that will move the niddle. Right now, it’s merchants that process millions of USD a month. As we grow, we can lower the bar.
Question:
How COTI payment better than another centralized payment method?
Efrat:
As mentioned earlier, a merchant would prefer COTI Pay 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.
Question:
What is the most important milestone for bringing mass adaption, cotipay or another product?
Shahaf:
I think that it’s actually locking down the right partner and to fit with his overall strategy. To build COTI where users are paying right now.
Question:
are you planning to add like “Google authenticator” to your wallet?
Nir:
Yes, adding 2FA authentication to the wallet is certainly on our roadmap for the near term additions to the wallet
Question:
How do you see COTI after 10 years?
Shahaf:
if we get it right, the same way we see TCP/IP in the internet today, BUT with the tokens that incentivizes all participants
Question:
Will there be a burn mechanism within COTI ecosystem?
Shahaf:
We have introduced a “vault” mechanism that serves similar purpose but without destroying long term value.
Question:
How can we distinguish the difference between COTI and the rest of the projects? Why this better?
Shahaf:
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.
Question:
Do you have aggressive marketing & PR program for coming days?
Shahaf:
My background is founding and selling two successful advertising companies. I have recruited Efrat that has worked with me in both for 6 years now. Does that answer your question?
Question:
Exchange based staking. What will be the min and max you can stake? And what average % return can we expect for this?
Shahaf:
you will know in a week if not sooner. I can hint to the fact that we are not dPOS, so the rates are coming from processing fees, that have been quite high Jan-Mar this year (±50% return)
Question:
What exchange(s) will/do you plan to be listed on?
Shahaf:
gradually on all our major exchanges. Current and new ones.
Question:
What about decentralization? Will be COTI as decentralized as standard crypto?
Nir:
TrustScore nodes (as it was always stated) will be decentralized eventually. At the current state, Full node are being operated in a decenteralized manner and other more high level nodes will be added gradually. As for ZeroSpend node is an auxiliary server only helping to ensure reasonably short confirmation times for all TrustScore ranges. In mature network, the transaction flow will be enough without its the need for a Zerospend Server, which as a result will allow us to remove the ZeroSpend node and still don’t have any impact on our network performance.
Question:
what has the demand been like for Staking 2.0? How many tokens or people are trying to stake?
Shahaf:
Good question. We had estimated good demand but what we have got was way beyond expectations of even the more optimistic team members (me). I think Efrat plans on announcing that Thursday. Crazy figures.
Question:
A question on coti nodes.. you say nodes will be run by coti to ensure 100% uptime. But what about those testnet node runners (like myself) who are proving 100% uptime whilst spending a good $80/month on VPS fees? Is it best to just turn off the community testnet nodes if coti is going to run them all in the future? At least the near future anyway..
Shahaf:
I’ll just take this one as it’s a very fair question. I think that testnet operators are pioneers and create amazing value for COTI. Therefore, you guys will get early access to staking and preference. Other than that, the next node is coming from the testnet group. I appreciate what you are doing!
For all of our updates and to join the conversation, be sure to check out our channels:
Website: https://coti.io
Twitter: https://twitter.com/COTInetwork
Telegram: https://t.me/COTInetwork
Github: https://github.com/coti-io
Discord: https://discord.me/coti
Technical whitepaper: https://coti.io/files/COTI-technical-whitepaper.pdf
Discord: https://discord.me/coti
Technical whitepaper: https://coti.io/files/COTI-technical-whitepaper.pdf
