COTI Partners With Bancor For Private, Custom, Trustless Trading Strategies
Following a series of landmark partnerships, COTI is thrilled to announce further details of a major collaboration with Bancor. The partnership with this leading Automated Market Maker (AMM) will enable users to execute customized on-chain trading strategies, while ensuring their approaches remain confidential thanks to COTI’s unique Privacy-on-Demand technology. Before we dive into the partnership, let’s take a look at Bancor’s pioneering technology and why privacy is an enabler.
Bancor: Pioneering the Constant Product AMM
Launched in 2017, Bancor is one of the earliest AMM projects, and an “OG” of the DeFi space.
Automated Market Makers are a form of decentralized exchange (DEX). Instead of relying on order books like a centralized exchange, AMMs use liquidity pools that are controlled by a smart contract. Liquidity providers (LPs) deposit funds to these pools, making them available for trading. The price for a trade is set by an algorithm, which uses an equation to determine how much of one token a trader will receive in turn for another.
This approach has many advantages, including simplicity and security. Users are quoted a single price for their trade. However, it is typically inflexible: Liquidity Provider’s (LP’s) deposit funds and have no choice about the price at which their funds are swapped to other currencies — until now.
Carbon DeFi: New On-Chain Paradigm For LPs And Traders
Bancor has launched a decentralized peer-to-peer trading protocol, Carbon DeFi, that introduces the concept of asymmetric liquidity. This is a new form of on-chain liquidity that enables advanced custom trading strategies, from the simple limit order to recurring “buy low, sell high” trading cycles — offering a far greater degree of flexibility than conventional AMMs, while eliminating its pitfalls such as MEV sandwich attacks.
For example, an LP could create a position where they can sell ETH in a range between $3,000 and $5,000 and then buy back from $3,000 down to $2,000. Carbon DeFi offers this functionality with a user-friendly interface that requires no coding expertise.
Bancor has also deployed an arbitrage framework called the Arb Fast Lane, which identifies and executes arbitrage opportunities between Carbon DeFi and other on-chain markets. This perfectly complements Carbon DeFi using chain-wide liquidity to help efficiently fill orders, akin to a sophisticated solver system or built-in trading bot. In addition, the Arb Fast Lane equilibrates on-chain liquidity sources in the networks it’s deployed on by integrating all major markets.
Blockchain technology, while revolutionary, has inherent vulnerabilities that expose users and contracts to attack vectors like sandwich attacks, front-running, and sequencer manipulation. Common mitigations, such as setting transaction thresholds, help reduce abuse but leave room for exploitation. Carbon DeFi enhances resilience in this area, significantly reducing risks but not eliminating them entirely. In contrast, COTI’s innovative privacy feature, Garbled Circuits, introduces a breakthrough solution — obscuring critical transaction details to prevent attackers from exploiting the system altogether. This advanced layer of privacy addresses a fundamental challenge the industry continues to face.
Ground-Breaking Privacy
This partnership will see COTI collaborate with Bancor, to integrate COTI’s tech stack into Carbon DeFi and Arb Fast Lane, adding a new level of privacy for their users.
Just as Bancor is offering game-changing flexibility and security for crypto asset traders, COTI provides ground-breaking new privacy features for the Web3 space. Powered by its implementation of Garbled Circuits, its Privacy-on-Demand offering allows for the full spectrum of decentralized confidential computing (DeCC), from simple private token transfers through DeFi operations to complex AI and machine learning processes, across 70 different blockchains. COTI will serve both EVM chains like Polygon and Avalanche, and non-EVM platforms, such as Solana. Web3 projects will be able to access and “turn on” privacy features whenever they need them, with minimal friction and no need to switch chains.
Providing such versatile, robust privacy is critical for Web3 adoption, with Bancor being the perfect example why.
Privacy: The Final Frontier
COTI’s Privacy-on-Demand technology allows a fundamental shift for DeFi and Web3, addressing many of the sticking points that hold back large-scale institutional adoption.
As such, it has the potential to facilitate onboarding for the next billion Web3 users, and open the door to trillions of dollars of new capital to flow into the space as privacy brings DeFi into line with existing expectations and requirements in the TradFi industry.
Carbon DeFi will be deployed on the COTI L2 shortly after Mainnet release, which is scheduled for launch in late Q1 2025.
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