Building COTI V2 Together: Transparency, Community Participation and What’s Ahead
COTI V2 is designed with gradual decentralization in mind, with a clear focus on expanding the community’s role in decision-making.
With COTI V2 now live, we’re taking the next step in our journey — reaffirming our commitment to openness, transparency, community involvement, and long-term sustainability. This commitment is already reflected in initiatives like Stay COTI, a platform built to empower builders and creators while giving the community a meaningful voice in shaping the COTI ecosystem.
Next, we’ll continue empowering the community through governance, starting with how network fees are used.
To add more clarity around the tokenomics mechanism, we’re also publishing more detailed information, including addresses, allocations, and a detailed 10-year inflation schedule.
Why the COTI V2 Token Upgrade Was Needed
COTI V2 marks a major leap forward — not just in technology, but in what’s now possible for the network and its community. By moving to a more scalable and open infrastructure, COTI has unlocked new opportunities that simply weren’t feasible before: from powering CBDC pilots with the European Central Bank and Bank of Israel, to enabling real-world asset (RWA) tokenization with major institutions, to building cross-chain applications that will span over 70 blockchains. This transition lays the foundation for COTI to play a central role in the next wave of Web3 innovation, one that prioritizes security, flexibility, and real-world impact.
To power this new network, we needed a new native gas token for the new infrastructure. A token that is used to pay fees, support staking, node rewards, and to boost the new ecosystem growth. Instead of launching a new token and fragmenting the community, we expanded the existing COTI token model and offered all holders a 1:1 migration path. An initial version of this tokenomics model was introduced over 18 months ago, which allowed ample time for discussion, and was refined through community feedback, until the final version was presented in the whitepaper we published. We were thankful for the amazing support we received through the process and amazed by the market acceptance as evident with COTI’s participation in national projects and the amount of new partners that have started developing on COTI V2.
A Predictable and Community-Aligned Token Model
COTI V2’s inflation model is algorithmic and follows a predefined, gradually diminishing schedule. It starts with a projected emission of ~35% in the first year and tapers to less than 1% annually by year 10 onwards. This emission formula continues beyond the 10-year mark, eventually reaching a capped total supply of 4.85 billion tokens within the first decade and 4.91 billion tokens over a longer horizon of 100 years.
Since Mainnet launched on March 26th, all transaction fees collected in $COTI are directed to a community-governed pool address. While the Total Supply (TS) reflects all newly minted tokens, excluding those burned through gas fees (per EIP-1559), the transaction fees collected in the pool are excluded from Circulating Supply (CS) unless redistributed by community vote. Both TS and CS are continuously updated on CoinMarketCap and CoinGecko.
This fee mechanism introduces the potential for a deflationary effect, depending on community decisions and network activity, reinforcing the protocol’s long-term adaptability. As presented in Chapter 4.3 of our whitepaper, the following chart outlines various potential paths for token supply changes, influenced by network activity and the associated fees:
New $COTI tokens are not pre-minted but continuously generated by the protocol and sent to the public genesis address. This is in addition to the initial 2 billion V2 tokens minted to mirror the existing COTI V1 supply. All newly minted tokens are allocated across three predefined categories: 58% for community rewards (staking, nodes and liquidity programs.), 24% for ecosystem growth (grants, partnerships, exchanges) and 18% for development (technical and product work). You can review a detailed 10-year emission breakdown in our tokenomics spreadsheet. We’ve also compiled a list of key wallets and protocol addresses for full visibility across COTI the new chain.
Clarifying Distribution Procedures
To simplify tracking and reinforce our commitment to open protocol operations, we’ll begin transferring newly minted tokens every 5 epochs from the genesis address to the following designated addresses; We will complete the implementation of this process within the next couple of weeks:
- Rewards Address: supports staking, nodes, liquidity campaigns, and community incentives.
- Ecosystem Address: managed by the COTI Foundation to fund grants, investments, events, and ecosystem growth.
- Development Address: funds used for network infrastructure development and maintenance.
Community Governance: What’s Next
While COTI V2 doesn’t yet operate under full on-chain governance, we’ve laid the foundation for it. The next step is to empower the community to make key decisions about how the protocol evolves. One good example for that is the Gas Fee Pool usage indicated in the whitepaper, in which community members will vote on how to utilize the gas fees accumulated in the network’s fee pool.
This represents a significant shift toward participatory governance and reflects the values we’ve built into COTI V2: openness, accountability, and user-driven decision-making. As outlined in Chapter 3.5 of our whitepaper, this will be followed by infrastructure upgrades and inclusive node-level participation, leading to a fully community-governed network.
We’re excited for the journey ahead and look forward to shaping the future of COTI together with you.
For COTI updates and to join the conversation, be sure to check out our channels:
Website: https://coti.io/
X: https://twitter.com/COTInetwork
YouTube: https://www.youtube.com/channel/UCl-2YzhaPnouvBtotKuM4DA
Telegram: https://t.me/COTInetwork
Discord: https://discord.gg/9tq6CP6XrT
GitHub: https://github.com/coti-io
