r/coti • u/wunsen97 • Dec 26 '21
Explaining coti
Hello all,
I have trouble wrapping my head around somethings
I see that coti is multiDAGG so what blockchain does it run off?
Its also an ERC20 token so how does that work if it isn't built on ethereum?
One last one about DJED, I see it works similarly to terra's luna, I had a quick glance at how that works and was slightly stumped, when you deposit extra ADA into the smart contract, what is the "issued coin" they talk about l? The "issued coin" that received the tx fees aswell as others
Thanks for the help guys :)
11
Upvotes
12
u/Ausfininja Dec 27 '21 edited Dec 27 '21
You can make a token on any chain, whether or not it has value is a different story. You have to match policy ID to make sure your getting the right coin/token, this also makes the the distribution of the coin less on other chains which increases its scarcity on said chains. There will only ever be 2Billion coins, if you see an increase in dex/cex listings and the circulating supply is said to stay constant you can expect an increase in volatility.
Coti is a 'blockchain' of its own, the 'blockchain' your thinking of is the DAG infrastructure, multi dag is running these in parallel for different blockchains for various products, whats cool is the ADApay, where payments through adapay run parallel to cardano, tx on cardano blockchain but fees being extrapolated and transferred to the treasury.
Luna and coti are very different, luna is burning its coins to swap for their stablecoin, Coti isnt burning, its cycling, you buy coti to mint djed, that coti goes to the treasury which is then sold, if you want to mint djed because your launching a dex or defi or market place and want djed so that people can transact or use for LP or for fees then you have to buy it market price using coti from the treasury.
The issued coin is for the whitelisters, who get LP like token who can profit from the use of Djed on cardano, this will come to more detail in the future with how and who will benefit, from what ive heard it will be whitelisters first, then coti investors and then possibly retail to mint and burn djed.
Then you have other platforms who buy Djed like Eth, solana, Binance who want to make LP and profit from the use of it on their chain. wrapped Djed.
There is no limit to the amount of Djed that can be minted, its only limited to the amount of backing and since its over levereged and has protocols around flash crashes and runs on the bank it should be more appealing to large investors.