There is shortly going to be a new announcement with regard to the tokenomics of COTI which will be interesting to see how this impacts the stakeholders. Many have been questioning the minting of new coins which over time has diluted the token value.
The tokenomics changed when COTI the payment service provider became COTI V2 offering privacy for Web 3 using garbled circuits to protect data. We know the institutions were being held back from using crypto and blockchains for two main reasons being privacy and compliance.
The institutions will not be one size fits all privacy program as each one will vary in it's specific needs and requirements. Combining two privacy protocols covers every need and using the COTI Nightfall protocol can develop their own tailor made solutions.
I saw some social media tweets today stating that COTI will become deflationary due to having a maximum supply and token burn mechanism. This is not true with regard to the maximum supply number and nothing has been announced with this regard. The burn mechanism will see all transactions using COTI such as every privacy transaction, every cross chain transfer plus every confidential smart chain contract generates fees all paid in COTI which will be burned. COTI mentioned they guarantee over the next 12 months 100 million COTI will be burned using these burn mechanisms. This represents roughly 3% of current supply and by the time the 12 months is up would be less than 3%, but still a big number.
What would make COTI deflationary is not necessarily having the maximum supply capped, but real usage through demand outstripping the current supply with a burn mechanism. I do not think capping the supply is the long term solution and one needs use cases that fuel the demand which would then create a use case scarcity.
The more chains and no new supply through utility feeding the token burn numbers is all reliant on the number of transactions and yes at some point it should become deflationary but there will still be new COTI being minted. The burn has to be higher than the new COTI being minted and only then are we calling it deflationary so until that happens it is still inflationary.
When you have multiple crypto protocols and blockchains requiring COTI for transactions then the supply is going to be diluted as it is no longer a one blockchain crypto and kind of overlaps it's use cases across many (72 blockchains at current count and most likely more with COTI Nightfall tech).
I have been looking at Chainlink recently as many have mentioned Chainlink being the crypto institutions have been turning to and partnering with. XRP we all have heard being termed the bank coin, but what they both need is COTI's privacy tech built into whatever privacy they already have.
Multichain Interaction: The COTI V2 mainnet is designed to support, interact with, and bring privacy functionality to over 70 blockchain networks, including Solana and XRP, enhancing their application capabilities.
I asked Google AI would Chainlink require COTI's garbled circuits to complete a transaction.
a developer could theoretically build a smart contract that uses Chainlink's CCIP for cross-chain movement and COTI's Garbled Circuits for the private computation within that same workflow.
The COTI team know what is being built using COTI V2 and know the uptake and demand that is going to happen for COTI V2. The team cannot reveal what they know and they cannot say until these are launched on COTI Mainnet. Talking about deflationary and tokenomics is a big deal and you would not be talking like this unless something is happening behind the scenes. The amount of crossovers on other chains is going to happen with COTI being the underlying privacy technology being used and adapted with other privacy solutions similar to what was shown with COTI Nightfall taking place.
Privacy and regulation is a fundamental part of crypto and what is going to eventually bring about mainstream adoption and there is quite a bit happening that is being developed out of necessity. This is going to be fascinating watching this unfold seeing all the missing parts of the jigsaw fall into place.
