Spicy Projects #8: COTI Foundation

Spicy Projects #8: COTI Foundation

By Jakub Lazurek

13 Mar 2025 (13 days ago)

3 min read

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Welcome back to our Spicy Projects series, where we highlight the most innovative Web3 projects. Today, we're exploring COTI Foundation, the team building a revolutionary confidentiality layer on Ethereum that's set to transform how privacy works in blockchain.

What is COTI Foundation?

COTI Foundation is developing the fastest and lightest confidentiality layer on Ethereum. Originally launched in 2017 as a payments platform, COTI has evolved to address one of blockchain's most pressing challenges: privacy. The team recognized that without robust privacy solutions, mainstream adoption by traditional financial institutions would remain limited.

Powered by breakthrough cryptography called Garbled Circuits and secured by Ethereum, COTI introduces the most advanced and compliant solution for data protection on public blockchains. This innovative approach unlocks a new world of use cases including confidential transactions, AI integration, enhanced DeFi, and decentralized identification – all with privacy at the core.

Garbled Circuits: The Privacy Game-Changer

What sets COTI apart is their approach to privacy. While many projects use Zero-Knowledge Proofs (ZKPs) or Trusted Execution Environments (TEEs), COTI partnered with Soda Labs to implement Garbled Circuits (GCs), offering several key advantages:

  • Incredible Efficiency: COTI's implementation is 1,800-3,000x faster than closest alternativeFully Homomorphic Encryption (FHE) solutions

  • True Decentralization: Unlike TEEs, Garbled Circuits don't require trusted hardware or introduce supply chain risks

  • Flexible Multi-Party Computation: Multiple users can provide encrypted inputs, something ZKPs cannot handle

Here's how it works: Any blockchain transaction can be described as a "circuit" – a series of logic gates. COTI encrypts or "garbles" this circuit so each gate takes encrypted input and produces encrypted output. Only users with the proper keys can decrypt the final output, ensuring complete privacy throughout the entire process.

Privacy-on-Demand and Cross-Chain Integration

COTI's "Privacy-on-Demand" feature is a confidential cross-chain solution that will enable private transactions with minimal friction across all major blockchains. This is made possible through integration with Axelar, creating a seamless privacy experience regardless of which blockchain you're using.

The mainnet launch scheduled for late Q1 2025 will be a milestone moment, with V1 tokens migrating to the new L2. Currently, the technology is undergoing rigorous testing on the testnet, preparing for what promises to be a transformative launch.

Why COTI Matters

Privacy isn't just a nice-to-have feature – it's essential for Web3 adoption by traditional businesses. Many TradFi organizations simply cannot use public blockchains without robust privacy measures due to:

  • Regulatory compliance with data protection laws

  • Protection against MEV attacks and front-running

  • Sensitive business information that cannot be exposed on public ledgers

COTI bridges this critical gap, potentially unlocking billions in institutional capital that has remained on the sidelines due to privacy concerns.

What's Next?

2025 is shaping up to be COTI's breakout year with several initiatives:

  • Confidential DeFi: Partnerships with major platforms including Bancor and EEA to bring privacy to decentralized finance

  • AI and Web3 Integration: Working at the intersection of artificial intelligence and blockchain with privacy as the connective tissue

  • RWA Platforms: Enabling real-world asset tokenization with the privacy these assets require

  • CBDC Innovation: The team has even contributed to the Digital Shekel Challenge, creating a proof of concept CBDC platform for the Bank of Israel

Fun Fact

COTI's garbled circuit implementation is so efficient that it can process private transactions with approximately the same computational resources as a standard non-private transaction – a feat previously thought impossible in blockchain privacy solutions.

From its origins as a payment platform to becoming a cutting-edge privacy solution, COTI Foundation represents one of the most promising infrastructure plays in Web3. By solving the privacy problem without sacrificing performance or decentralization, COTI is positioning itself at the center of the next wave of blockchain adoption.

Stay tuned for more Spicy Projects, where we highlight the hottest ideas in Web3!

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