The enterprise-grade blockchain platform Coti is set to transition protocol to become a scalable, privacy-focused Layer 2 on ethereum in 2024.
An announcement shared with Cointelegraph outlines how Coti will move from a standalone protocol to a layer 2 of ethereum to bring its privacy features to the broader ecosystem. Coti V2 features a cryptographic approach called fuzzy circuits, which allows transactions to be processed without exposing sensitive information and data.
Drawing from the field of multi-party computing (MPC), confusion protocols allow two or more parties to jointly compute a function while keeping both their inputs and intermediate variables private.
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The technique was initially introduced in the 1980s and has become an essential feature in privacy-preserving technologies. The main advantage of the technology is to preserve the privacy of individual inputs while allowing multi-party computation.
Confusion protocols are useful in situations that require sensitive data to be included in a calculation without revealing the information itself. Coti CEO Shahaf Bar-Geffen explains how the protocol prevents sensitive data from being transmitted to competitors, partners and customers transacting on its chain:
“Sensitive data transmitted as public information on a blockchain is a bug, not a feature. This is not tolerated in legacy enterprise systems, so why should it be tolerated on-chain?
Bar-Geffen adds that confusion protocols offer a unique approach in the context of Coti V2 by allowing smart contract transactions and executions where the details remain private between the parties involved:
“This level of privacy is particularly important in decentralized financial applications where transaction confidentiality can be as critical as transaction integrity.”
The CEO said that Coti will primarily focus on driving business functions on a blockchain network with complete privacy. He claims that other platforms that focus on anonymity as a means of providing privacy go overboard in terms of regulatory oversight and are not necessarily effective in providing a compliance basis for the broader ecosystem.
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Coti envisions its protocol being tailored to use cases requiring advanced privacy provisions in finance and healthcare. Its current protocol is aimed at enterprises and allows managing blockchain-based products such as custom branded tokens, wallets, website integrations, and fiat on- and off-ramps.
Coti V2 is scheduled for net release to developers in Q2 2024. Coti currently provides digital infrastructure for Web3 applications at a layer 1 level. This includes tools for wallets, tokens, and payment modules. Its current layer 1 protocol has a total value locked of $31 million.
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