The COTI Treasury is now operational, offering community members who are willing to take on more risk more opportunities to profit from their ecosystem investments.
The COTI Treasury, described as an "algorithmic and decentralised $COTI pool," will expand over time as it collects fees on all COTI ecosystem transactions, and users will be able to receive some of those benefits by staking their tokens in it.
While staking has previously been possible with COTI, it has had somewhat limited functionality up until now. Users can select their personal risk tolerance and benefit from substantially greater APYs with the COTI Treasury, as long as they're ready to tolerate a higher potential of their deposits being liquidated.
“The Treasury binds everything that we do at COTI into one coherent system,” said COTI Shahaf Bar Geffen. “Our commitment is to continue to grow the ecosystem in terms of services, volume, and partnerships to enable lucrative rewards for our users”.
The process is as follows: First, the user determines how much $COTI they are willing to deposit into the Treasury (any amount) and how long they want to lock up their coins. Then customers choose the multiplier, which has a direct impact on the APY they'll receive. A 1X multiplier has the lowest risk and, as a result, the lowest APY, but a 4X multiplier can offer an extraordinarily generous APY of 80% or more, depending on other conditions, though such a huge potential payout comes with a significant amount of risk.
The value of the user's deposit at the time it was staked, coupled with their multiplier, will be used to produce a continually changing "Health Score." With a significantly higher APY, there is a far greater chance that this health score will fall to 1.0, implying that the deposit will be liquidated (meaning, the user loses it unless they add to their deposit to increase the score). However, as long as their health score remains over this level, they will continue to receive incentives (which will be theirs even if the deposit is liquidated).
Any liquidated deposits will be refunded to the Treasury and redistributed as rewards among all active deposits.
The Health Score is not applicable to individuals who choose the lowest 1X multiplier, which means they are not at risk of losing their original deposit.
When the first lock time expires, users can withdraw their original deposit or choose to extend the lock duration for another cycle. So, if the initial lock time was 30 days, customers can lock their $COTI for another 30 days and keep collecting incentives. Participants' earnings are not locked in and can be withdrawn at any moment. When consumers withdraw their original investment, they will be charged a 0.5% fee plus a 0.2% transaction fee. Deposits withdrawn prior to the expiration of the lock period are subject to an additional early withdrawal fee.
Users have additional options, such as the opportunity to top up their deposits at any moment.
COTI stated that the debut of the COTI Treasury ushers in a new age for the ecosystem and that additional features are in the works. These include a cross-chain pricing structure to ensure that fees from COTI's cross-chain products are channelled into the Treasury.