Blockchain Platform Coti to Transition to a Scalable, Privacy-Focused Layer-2 on Ethereum
Enterprise-grade blockchain platform Coti has announced its plans to transition its protocol to become a scalable, privacy-focused layer-2 solution on the Ethereum network by 2024. This move will leverage the field of multi-party computation (MPC) and garbling protocols.
What are Garbling Protocols?
Garbling protocols allow multiple parties to jointly compute a function while keeping their inputs and intermediate variables private. This technology, introduced in the 1980s, is crucial in privacy-preserving technologies as it preserves individual input privacy while enabling multi-party computation.
The Advantages of Garbling Protocols
The primary advantage of garbling protocols is that they enable computations involving confidential data without revealing the information itself. Coti CEO Shahaf Bar-Geffen highlights how this protocol prevents sensitive data from being exposed to competitors, partners, and clients:
“Sensitive data transmitted as public information on a blockchain is a bug, not a feature. This isn’t tolerated in legacy business systems, so why should it be tolerated on-chain?”
This level of privacy is particularly important in decentralized finance applications where transaction confidentiality is critical alongside transaction integrity.
Focusing on Enterprise Functions with Privacy
Coti aims to focus on powering enterprise functions on a blockchain network with complete privacy. Unlike other platforms that prioritize anonymity for privacy, Coti believes this approach may lack regulatory oversight and effectiveness in providing a compliant foundation for the wider ecosystem.
Coti envisions its protocol catering to use cases requiring advanced privacy provisions in finance and healthcare. Currently, Coti’s protocol enables enterprises to manage blockchain-based products such as custom-branded tokens, wallets, website integrations, and fiat on and off-ramps.
Coti’s Future Plans
Coti v2, the privacy-focused layer-2 solution, is set to release a developer net in Q2 2024. Currently, Coti provides digital infrastructure for Web3 applications at the layer-1 level, including tools for wallets, tokens, and payment modules. The platform’s layer-1 protocol has a total value locked of $31 million.
Hot Take: Coti Paving the Way for Privacy-Focused Blockchain Solutions
With its transition to a scalable, privacy-focused layer-2 solution on Ethereum, Coti is addressing the need for privacy in blockchain networks. By leveraging garbling protocols and multi-party computation, Coti ensures sensitive data remains private while enabling secure computations. This approach is particularly valuable in sectors like finance and healthcare where privacy is crucial. While other platforms prioritize anonymity, Coti believes that a privacy-focused approach strikes the right balance between confidentiality and regulatory compliance. As Coti continues to develop its protocol and expand its enterprise functions, it aims to provide advanced privacy provisions for various use cases.
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