COTI ICO Review: An Alternative to VISA
To say the online payment industry is huge would be an understatement.
With billions of people all over the world engaging in trillions of dollars of transactions, it’s no surprise a team of financial experts have grouped together to try and form an all-in-one currency solution.
The COTI (currency of the Internet) ICO project is gaining momentum. Its end goal is to produce a decentralized network enabling everyone across the globe to make transactions quickly, easily, and with one currency.
Here’s my COTI ICO review taking you through exactly what their goals are, how they intend to achieve them, and a look at the team behind the project.
The COTI Project Solution
COTI (currency of the Internet) has a vision of creating exactly that, the currency of the internet.
This being a scalable, decentralized global commerce, accessible to all, and with all the features and functions needed to make it a stable and trusting currency.
In their own marketing words, the team behind COTI describes their project as an “Alternative to traditional payment systems like Visa, Mastercard, and Paypal.”
Their CTO, Dr. Nir Haloani adds that it’s their vision to, “Enable people around the world to exchange value as easy as it is to exchange information over the internet.”
So the end goal of the COTI project is clear. Getting there is going to take some time, careful planning, and a lot of support and funds however as I will explain throughout this article.
You’re right in thinking that this platform will benefit consumers and have some advantages over the current options out there. It’ll also benefit merchants too, making accepting payments easier across a wider range of currencies.
COTI will release their own multi-currency wallet and debit card. They are developing some additional tools for merchants to make accepting payments and producing reports easy.
COTI has laid out 8 objectives as follows:
- Decentralization - A decentralized governance model is necessary to enable anyone and everyone to benefit from the currency.
- Scalability and Instantaneity - Despite the expected large volume of transactions, the team say they will ensure instant payment solutions.
- Reliability - Reliability is key if the system is to be trusted by the community.
- Security - This goes hand-in-hand with reliability. The COTI team are confident their platform will be safe and secure.
- Low-to-Zero Fees - The team outline how they are building a “Self-sustained and equitable” payment system with fees kept to the bare minimum.
- Trust Generative - Through lower fees, fast and secure transactions, and some of the other tools COTI plan on releasing they hope to generate trust among the community.
- Ease-of-Use - Being accessible and user-friendly is important for both buyers and sellers if the project is to be a success in the long-term.
- Regulatory Compliance - The team plans to develop their own regulatory framework, and will of course comply with the current legal frameworks across all users’ jurisdictions.
The ecosystem COTI was designed around uses some innovative and interesting elements.
By using the DAG technology COTI platform will allow 10.000 transactions per second, which is really impressive if you think that VISA at peak hours proceeds 4.000 per second.
The Cluster Ledger
The Cluster will be performed by three type of nodes:
Full Nodes: They are the users connection to the network. They do (POW) Proof of work and attach new transactions to the cluster.
History Nodes: They are what their name suggests. These nodes store the history of the Cluster. All accounts history can be retrieved by them. If there is a problem with a history node the COTI history servers can be used.
Double Spend Prevention DSP Nodes: These Nodes keep an updated copy of the Cluster and monitor transactions for possible double spending attacks. These nodes are getting rewarded for their work.
Trust Scoring Mechanism
There is a built-in trust score to increase the security for users. This basically means that each transaction will have the users trust score and must be validated by two previous transactions with a similar score. Meaning more users equal to higher confirmation percentage.
Trust Score Calculation: For new users trust score is calculated by document verification and a questionnaire. As the time passes more variables are added to the trust score like:
- Users Activity (Total value of transactions over a set period of time)
- Number of user's disputes
- Number of disputes lost
- Rating from other users
The Trust Score is measured in a scale from 0 to 100. The higher trust score the lower the fees users pay. This is a way of COTI discouraging dishonesty and unnecessary disputes.
As we mentioned above each transaction must be validated by two previous transactions with a similar Trust Score. As more and more transactions are added to the Cluster they form Trust Chains with the same range of Trust Scores.
Cluster's algorithm (Trust Chain Consensus) is designed in a way that user's with higher Trust Scores get their transactions verified much faster. This is happening because their Trust Chain reach the required Trust Score limit faster.
The Mediation System
Another interesting element is the mediation system. This system is in place to help protect buyers and sellers against errors, fraud, and other issues that may arise during transactions.
If the sender and receiver of funds are unable to resolve the issue among themselves, they can initiate mediation.
The issue will be presented to a group of independent mediators to find a resolution.
Mediators are being encouraged to reach the same conclusions during a dispute but not collude.(a lot like Augur)
When a dispute occurs Mediators verify the information, and use the mediator client to cast votes.
Every time Mediators vote they also deposit COTI coins. Then the votes are calculated and according to the majority of the votes the dispute is solved and the winner gets compensated.
The Mediators that voted in favor of the winning party (the one that got the majority of the votes) get rewarded with COTI coins. Those that voted against the majority lose the deposited COTI coins.
To ensure that Mediators will not collude COTI choose the ones with the smallest possibility to do so. If mediators get caught to collude they get severely punished.
Everyone can register as a mediator but they have to meet certain requirements. Those that meet these requirement will go through a training process to get educated about the mediation system.
COTI will be undertaking a token sale soon after the close of the crowd sale. During the initial stages of the network, tokens will be limited to 2,000,000,000.
They are allocating the tokens as follows:
10% Advisors - In recognition of the efforts and contributions of selected partners.
15% Team - These coins are allocated to the team as compensation for their time investment to date and ongoing work.
30% Token Sale - This is the amount of coin going on private and public sale.
45% Incentives, liquidity, reserve - An incentive program for merchants, validators, and partners.
The funds raised will be used as follows:
30% Research and Development - Further development of the exchange and tools.
15% Marketing - Marketing to consumers and merchants to increase awareness and acceptance of COTI.
12% Licenses and Capital Requirements - Funds to licence the services, wallet, and exchange services.
9% Legal and Compliance - Funds to cover legal expenses.
8% Merchant Services - Funds to maintain non-software merchant offerings.
7% Operational Expenses - Standard operational running costs of the business.
7% COTI Fund - Funds set aside for technology-related expenses.
7% Market-maker - COTI has an automated market-maker, these funds will be used to maintain this system.
5% Cyber Security - Funds allocated for keeping security up-to-date.
Some of the specifics to be aware of include:
The price of a token will be set at 0.1 USD per COTI.
There is a minimum contribution of USD 50,000 in the private sale.
ERC-20 tokens will be issued following the launch of COTI’s alpha net and post listing in COTI’s exchange.
COTI reserve the right to initiate additional token sales to fund further development.
An ICO is only going to be as successful and as strong as the team behind it.
The COTI project has a team of around 27 people. With a wide range of backgrounds and experience in software engineering, legal practice, business development, marketing, blockchain development, and other industry-related experience, on paper it looks like they have everything they need to make this project a success.
Some of their key members heading up the project include:
Shahaf Bar-Geffen (CEO)
Shahaf is one of the co-founders. He’s a serial entrepreneur, former CEO of WEB3, and earned his B.Sc degree in Biotech and Economics from Tel Aviv University.
Dr. Nir Haloani (CTO)
Nir is the former Head of Research at IBM, owns 14 patents, an innovator of data compression, AI and machine learning, and has more than 19 years of experience in the research and development field.
David Assaraf (COO)
David is a financial specialist. He’s a former HSBC internal auditor and examiner in the credit risk unit at the Central Bank of Israel.
Yair Lavi (CFO)
Yari is a former finance director at Plus500 UK. He holds an MBA from Tel Aviv University, has previously worked as an accountant, and in financial planning and valuation roles.
Samuel Falkon (Co-founder)
Samuel is another of the co-founders. He’s heading up the VP community and has experience in product development and sales management.
There is strength in numbers, and COTI has partnered up with some large and influential corporations to help them gain a competitive edge, most notably:
Transact Europe has relationships with thousands of merchants. They will help with creating the banking system connectivity infrastructure needed to assist with fiat currency transfers.
With powerful card processing infrastructure in place, COTI can benefit from Processing.com’s experience and merchant database.
Isazi specialize in AI and machine learning. They are working with COTI to proof their core algorithms and run stress testing simulations.
Hexa Labs specialize in solving complex blockchain challenges. They are lending their expertise to COTI in this partnership.
Advanced Blockchain AG is a technology firm already established in the cryptocurrency space and has partnered with COTI to allow them to leverage their network and relationships.
Not only has Luna Capital partnered with COTI, Lindsey Maule, the CEO of Luna Capital has joined COTI’s board of advisors. Their goal is to help COTI grow their ecosystem.
Simplex uses AI technology to facilitate crypto and fiat transactions. They are on board to help streamline and secure COTI’s payment processing.
Fingenom develops advanced algorithms and trading infrastructures. They also help businesses find and exploit hidden patterns in various capital markets.
Bancor enables traders to convert between any two tokens on their network using automatically calculated prices. They are working with COTI to activate the ERC20 tokens in their network.
WEB3 uses advanced marketing techniques and technologies to reach a large customer base. COTI is using WEB3’s technology to serve their product to customers.
CoinList is a platform enabling token-based financial services. They will be assisting COTI with their compliance processes among other things.
COTI are using the Wings blockchain platform and the company co-founder and BizDev are joining their advisory board.
Token Symbol COTI
Token Type ERC- 20
Whitelist / KYC Yes
Hard Cap $30.000.000
ICO Price $0.10
Available for Token Sale 30%
Total Token Supply 2.000.000
Accepted Currencies ETH, BTC, FIAT
The COTI team formed in early 2017. Since then they have been focusing on research and development while outlining a roadmap for rolling out all the key features of their system over the next few years.
COTI has outlined five phases to their roadmap spanning from 2018 to 2021 as follows:
2018 - Phase 1
May - Jul - ICO Launch
Aug - Alpha net launch (Basic scale)
Sep - Exchange and wallet launch - Beta
Oct - Mediators and merchants onboarding
Nov - Exchange and wallet - Full launch
Dec - Test net launch (Large scale)
2019 - Phase 2
Q2 - Consumer wallet launch
Q2 - Decentralized mediation prototype
Q2 - Trust score server launch
Q2 - Launch of Full Nodes, DSP Nodes and History Nodes
2019 - Phase 3
Q4 - Decentralized mediation launch
Q4 - Currency exchange
Q4 - KYC/AML server launch
2020 - Phase 4
Debit card launch
Hedging service launch
2021 - Phase 5
Expansion of merchant services
Mediation SDK launch
Payment processing tools (API / iFrame)
It’s an ambitious roadmap, but fully achievable and shows us that the team are not only ambitious and passionate about COTI, but that they have a detailed understanding of the steps involved in rolling out their suite of tools.
COTI will provide a solution to a very real problem that merchants and consumers deal with daily. Consumers and merchants currently deal with a wide range of costly issues related to dealing with multi-currencies and fees can quickly escalate.
The team behind the project have all the expertise and industry knowledge to make the project a success. The increasing number of strong partnerships also adds a lot of confidence. These are areas that have been the weak link in other projects, but looks like the strong link with COTI.
The online payment market is large enough and ready for a system like COTI. Industry experts agree that the COTI network is beneficial enough to penetrate the market, it’s just a matter of how much of a market share they can secure.
The COTI project is still in its very early stages. While the team behind COTI have the skills and expertise on paper, and the advisory board is filling up with a wealth of experienced bodies, there is still some proving ground to be covered.
Another issue is building trust. It’s hard to account for how well received and trusted the COTI platform is going to be before it’s fully rolled out. We’ve seen other ventures looking good on their White Paper then failing on launch. It’s something that we will have to watch unfold and how it’s managed when the time comes.
There are also some questions around how realistic the roadmap goals are. They are already spanned out over more than 3 years. Any additional delays could cause serious disruptions with large ripple effects.
Finally the last and bigest weakness of COTI is that they don't have a working prototype that is a deal braeker for us. With big projects like COTI we would like to see a proof of concept.