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 shift from a standalone protocol to an Ethereum layer-2 to bring its privacy features to the broader ecosystem. Coti V2’s features a cryptographic approach called garbled circuits, which allows transactions to be processed without exposing sensitive information and data.
Drawing from the field of multi-party computation (MPC), garbling protocols enable two or more parties to jointly compute a function while keeping both their inputs and intermediate variables private.
Related: Near taps Nym for metadata privacy, encryption services
The technique was initially introduced in the 1980s and has become an essential function in privacy-preserving technologies. The technology’s primary advantage is preserving individual input privacy while allowing for multi-party computation.
Garbling protocols are useful in situations that require confidential data to be included in a computation without revealing the information itself. Coti CEO Shahaf Bar-Geffen explains how the protocol prevents sensitive data from being broadcast to competitors, partners and clients transacting on its chain:
“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?”
Bar-Geffen adds that garbling protocols offer a unique approach in the context of Coti V2 by enabling transactions and smart contract executions where the details remain private between the involved parties:
“This level of privacy is particularly important in decentralized finance applications where transaction confidentiality can be as critical as transaction integrity.”
The CEO said that Coti will primarily focus on powering enterprise functions on a blockchain network in complete privacy. He claims that other platforms that focus on anonymity as a means to provide privacy tread the line in terms of regulatory oversight and are not necessarily effective at providing a compliant base for the wider ecosystem.
Related: Polygon 2.0: 2024 to see unified ZK-powered L2 chains
Coti envisions its protocol catering to use cases requiring advanced privacy provisions in finance and healthcare. Its current protocol is aimed at enterprises and allows for managing blockchain-based products like custom branded tokens, wallets, website integrations and fiat on and off-ramps.
Coti V2 is scheduled for a developer net release in the second quarter of 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 $31 million total value locked.
Magazine: Beyond crypto: Zero-knowledge proofs show potential from voting to finance
