tl;dr
- COTI is an Ethereum-based Layer 2 that introduces programmable privacy to Web3 via Garbled Circuits, enabling confidential smart contracts, private asset transfers, and institutional-grade compliance across DeFi, RWA tokenization, identity, and AI.
- Built for the future of Web3, COTI powers privacy in real-world applications like payments, stablecoins, tokenization, and confidential computing.
- Unlike transparent blockchains, COTI allows developers and institutions to define which data is public, private, or auditable, all enforced at the protocol level.
- COTI combines cryptographic performance with usability: 3000x faster and 250x lighter than Fully Homomorphic Encryption (FHE), with full EVM compatibility.
What is COTI? The Complete Beginner’s Overview in 2026
COTI (Currency of the Internet) is a privacy-first Layer 2 on Ethereum, designed to enable confidential computation and data protection across the decentralized economy. Built with Garbled Circuits and Multi-Party Computation (MPC), COTI lets developers build dApps with programmable privacy, selectively disclosing data for users, regulators, or counterparties as needed.
In 2025, COTI launched on Mainnet and was the first multi-party privacy protocol to go live in the market. COTI delivers the missing confidentiality layer for Web3 use cases.
The Big Problem COTI Solves: On-Chain Privacy
Most public blockchains are fully transparent by design, making them unsuitable for sensitive use cases like institutional finance, healthcare, identity, or AI. Without privacy, firms cannot tokenize real-world assets (RWAs), protect user data, or comply with confidentiality regulations.
COTI solves this by introducing a practical, performant privacy layer that enables:
- Confidential smart contracts
- Private asset/token transfers
- Selective auditability
- Compliance-ready programmability
This gives users and developers full control over what is public and what remains private, unlocking Web3 for institutions and real-world adoption.
COTI’s Technology Explained Simply
COTI’s technology combines privacy-focused cryptography and smart contract infrastructure to address one of blockchain’s biggest limitations: the inability to handle sensitive data on public ledgers. Rather than optimizing for raw transaction throughput, COTI V2 is designed to enable confidential computation, allowing applications to run logic on encrypted data while preserving verifiability and compliance.
Garbled Circuits vs Traditional Smart Contracts
Traditional smart contracts operate entirely in the open: inputs, execution, and outputs are visible to anyone observing the blockchain. COTI replaces this model with Garbled Circuits, a cryptographic technique that allows computation to be performed on encrypted inputs. The logic executes correctly, but the underlying data is never revealed to the network. This makes it possible to build applications with private balances, private conditions, and private business logic on-chain.
Multi-Party Computation (MPC) & Selective Disclosure
COTI combines Garbled Circuits with Multi-Party Computation (MPC) to distribute trust across multiple participants. Instead of relying on a single party to handle sensitive data, computation, and key material is split among independent operators. This allows applications to remain private by default, while still enabling selective disclosure to auditors, regulators, or counterparties when required.
Programmable Privacy on Ethereum
Built as a fully EVM-compatible Ethereum Layer 2, COTI allows developers to use standard Solidity tooling while adding privacy controls directly into smart contracts. Rather than choosing between full transparency and full anonymity, developers can define exactly what data remains confidential and what can be revealed. This “privacy on demand” model makes COTI suitable for real-world use cases such as Private DeFi, stablecoins, RWAs, and PayFi.
COTI Treasury & Staking Rewards in Crypto
- COTI’s Treasury is a decentralized staking and incentive mechanism designed to reward long-term participation while supporting the broader ecosystem. Rather than relying on traditional staking based purely on block production, the Treasury aggregates value generated across the COTI ecosystem and redistributes it to participants who lock COTI for defined periods.
- The system is designed to align token holders, network usage, and ecosystem growth by tying rewards to participation rather than short-term speculation.
How the Treasury Works (Deposits → Rewards Pool)
- Users deposit COTI into the Treasury by opening a “Treasury position,” locking tokens for a selected duration. In return, they receive gCOTI, a governance and yield-boosting token that represents their share of the Treasury pool.
- The Treasury accumulates value from multiple ecosystem sources, including protocol fees, ecosystem activity, and Treasury-specific emissions. Rewards are distributed proportionally based on a participant’s share of the pool, meaning users earn rewards relative to the amount of COTI and gCOTI they hold.
Current APY Dynamics in 2025
- Treasury yields fluctuate based on overall participation, lock-up duration, and ecosystem activity. Longer lock periods and higher gCOTI balances increase reward share, incentivizing long-term alignment with the network.
- Rather than offering fixed yields, the Treasury uses a variable reward model that adjusts as the pool grows or contracts. This design avoids unsustainable emissions while still offering competitive returns during periods of strong network usage.
Why the Treasury Reduces Circulating Supply
- Depositing COTI into the Treasury removes tokens from active circulation for the duration of the lock-up. This reduces liquid supply while simultaneously incentivizing long-term holding.
- In parallel, portions of ecosystem value are routed back into the Treasury, reinforcing demand for COTI over time. The result is a system that encourages holding, participation, and ecosystem usage rather than short-term yield extraction.
COTI’s Native Stablecoins: USDC.e and wUSDT
USDC.e is COTI’s wrapped version of USDC, bridged directly onto COTI’s Layer 2. It maintains a 1:1 peg to the U.S. dollar and is fully integrated into Carbon DeFi, where users can trade or provide liquidity with zero slippage and no trading fees. As a trusted, familiar stable asset, USDC.e strengthens COTI’s DeFi functionality and supports smooth value transfer across the ecosystem.
In addition, wUSDT provides USDT liquidity on COTI through ChainPort, which enables secure bridging of USDT into the network. Together, USDC.e and wUSDT ensure broad stablecoin coverage on COTI, improving capital efficiency and usability for DeFi, payments, and other on-chain applications.
COTI Major Partnerships & Ecosystem Growth
COTI has engaged in a broad set of enterprise and public-sector initiatives. This includes participation in Central Bank Digital Currency (CBDC) designs connected to the European Central Bank, as well as a national-level pilot for a Digital Shekel with the Bank of Israel, where its technology was used to explore programmable payments, controlled disclosure, and secure digital asset transfers within regulated environments.
Across the broader ecosystem, COTI has established over 80 partnerships spanning payments, DeFi, privacy technology, and infrastructure. These include protocol and liquidity collaborations with platforms such as Carbond DeFi by Bancor, confidential DeFi and AI Agents with PriveX, and active participation in industry groups such as the Enterprise Ethereum Alliance. COTI is also listed on most major global exchanges, including Coinbase, Binance, and others, providing broad market access and liquidity.
COTI is actively positioning itself at the intersection of privacy and real-world assets (RWAs). Through collaborations with RWA-focused platforms such as Plume and Zoniqx, and as a member of the Tokenized Asset Coalition. This work is complemented by The Table, COTI’s global series of high-level, invite-only roundtables with industry decision-makers held in cities including Singapore, New York, Dubai, and Tokyo, focused on advancing private, compliant RWA infrastructure.
COTI V2: The Privacy Revolution
COTI V2 marks a major shift in the project’s architecture and focus. Built as a privacy-first Ethereum Layer 2, it enables confidential smart contracts using Garbled Circuits and Multi-Party Computation (MPC) instead of relying solely on zero-knowledge proofs. The core concept is privacy on demand, allowing applications to keep data private by default while selectively disclosing information to auditors, regulators, or counterparties when required. Full EVM compatibility allows developers to use standard Solidity tooling while adding optional confidential computation.
At a practical level, Garbled Circuits allow encrypted inputs to be processed through encrypted logic, producing correct outcomes without revealing underlying values. MPC ensures trust is distributed across multiple parties, preventing any single entity from accessing private data. Together, these techniques enable private balances, confidential execution, and privacy-preserving application logic on a public blockchain.
COTI vs Other Web3 Privacy Protocols
COTI V2 is not an anonymity-focused system like Monero or Zcash, nor is it a mixer-style tool such as Tornado Cash or Railgun. Instead, COTI is a programmable privacy protocol built for developers and enterprises that require confidentiality with compliance. Privacy is applied at the application and logic layer, enabling use cases such as MEV-resistant DeFi, private stablecoins, CBDCs, RWA settlement, and privacy-preserving identity, while still supporting selective disclosure.
Other projects attempting programmable privacy often rely on Fully Homomorphic Encryption (FHE), Trusted Execution Environments (TEEs), or zk-only approaches such as Aztec. While these approaches are powerful in specific contexts, they face significant scalability and cost challenges as usage grows, often requiring exponentially more compute or trusted hardware assumptions. COTI’s approach is designed for practical deployment at scale, emphasizing deterministic performance, multi-party collaboration, and compliant privacy suitable for real-world financial and enterprise applications.
