Operator-Defined Privacy: Inside the Cryptography That Powers COTI
Soda Labs co-founder Avishay Yanai on garbled circuits, the four-party disclosure stack, and why “MPC vs. FHE” is the wrong question. TL;DR → Soda Labs co-founder and CEO Avishay Yanai makes the case that real privacy infrastructure is operator-defined: the business that owns the smart contract decides what is visible, and to whom. → Institutional privacy is a layered problem across four parties: the regulator, the AML/KYC partner, the real-time security provider, and the counterparty. The architecture has to serve all four. → His case for Garbled Circuits rests on four properties: integration, flexibility, throughput, and deployment economics. → It is the same cryptography, developed with Soda Labs, that has powered COTI’s mainnet since March 2025. Who gets to decide what stays private? That question sits under every serious conversation about privacy on public blockchains. In a new interview with Proof Street, Soda Labs co-founder and CEO Avishay Yanai gives an answer that reframes the debate: the operator decides. Yanai is one of the cryptographers behind gcVM, the garbled-circuit virtual machine COTI’s network runs on. So when he describes what privacy infrastructure has to do, he is describing the same technology that has been in production on COTI since March 2025. Here is why his framing matters, and how it maps onto what COTI has already shipped. Privacy Is a Decision, Not a Default Yanai’s core claim is simple. The business that owns a smart contract should decide what privacy looks like, and who is allowed to see what. If a user accepts the service, they accept its terms, the same way they do with any service online. What changes on-chain is verifiability. In an ordinary service, you trust that a provider handles your data the way its terms promise, with no way to check. When privacy is a property of the cryptography itself, the promise and the behavior become the same thing. Anyone can verify who can see what, and when. That is the core of Privacy-on-Demand. Privacy is not a fixed setting bolted onto the chain. It is programmable, configured by the operator to fit the use case in front of them. The Four-Party Stack Yanai’s second point: institutional privacy is never a single switch. In most transactions with privacy implications, four parties are looking at the data, each with a different level of access and a different reason to be there. The regulator. For anyone handling money or regulated data, disclosure to regulators is mandatory. The privacy posture has to stay compatible with a subpoena. The AML and KYC partner. External providers contracted to monitor for illicit activity. They get a defined level of visibility: more than nothing, less than full plaintext. The real-time security provider. The least-discussed layer. Firms that watch smart contract activity as it happens and can block a suspicious transaction before it executes, often by acting as a required co-signer. The counterparty. The layer most user-facing privacy conversations focus on. In institutional settings it sits at the bottom of the stack, seeing only what the operator agreed to share. The real question for any architecture, Yanai argues, is whether it lets the operator define a clean posture across all four layers, or forces a single posture the technology dictates. Good infrastructure has to be operator-defined from the ground up. This is the model COTI describes as compliant confidentiality: selective disclosure, where an institution reveals exactly what it needs to, to exactly whom, and nothing more. MPC Is a Problem, Not a Solution Here Yanai reframes the category. Multi-party computation (MPC) is usually pitched as a rival to FHE, ZK proofs, and TEEs. He pushes back: MPC names a problem, compute on data without revealing the inputs, not one technique that solves it. His sharpest example is the FHE comparison. Production FHE systems for blockchain lean on threshold MPC for key management. Several leading FHE projects, Yanai notes, are MPC protocols underneath, with FHE handling one specific operation. The popular “FHE versus MPC” split is less clean than the marketing suggests. That reshapes how builders should choose. The right question is not “which is fastest.” It is: what disclosure posture does my use case need, and which technique supports it at the throughput I require? The reframe matters for COTI, because it moves the conversation past raw benchmarks and onto architecture, where the real differences decide what you can actually build. Why Garbled Circuits So why build on Garbled Circuits, a cryptographic protocol for secure computation that has existed since the 1980s? Yanai gives four reasons. In plain terms: it runs almost anywhere, it fits how apps already work, it is fast enough for real use, and it is cheap to operate. Integration: it runs on encryption your devices already trust. Garbled Circuits, as Soda builds them, use AES, the same standard encryption that has protected everyday internet traffic for more than two decades. Because it relies on tools already built into phones, laptops, cloud servers, and even small connected devices, there is nothing exotic to install. The privacy layer speaks a language almost every device already knows, so it can go almost anywhere. Flexibility: it fits how apps and tokens already work. Developers can use it without redesigning their applications, because it handles the same kind of token math standard Ethereum apps already rely on. It can also do something subtle but useful: let someone prove they hold a token without revealing which specific one. Yanai’s example is a trading firm. Its orders still show up in the market, where they need to be, while the link between a trade and the firm behind it stays confidential. Throughput: it is fast enough for real-time use. The trick is timing. The slow, heavy math is done in advance, in the background, so the live step is quick when a real transaction arrives. Picture a kitchen prepping ingredients before the dinner rush, so plates go out fast once orders land. Soda’s measurements put this at 83 confidential transactions per second today, with a path to 400 to 500 as the behind-the-scenes work is optimized. Deployment economics: it is cheap to run at scale. It works on ordinary computers. There is no need for the specialized, expensive, hard-to-source hardware that some other privacy approaches depend on. That keeps costs low, which matters most as a network grows to many operators, each running their own machines. Yanai’s point is that fast was never the whole argument. The reason to choose this cryptography is that it lets the operator define privacy across all four layers, and lets anyone outside that perimeter verify the computation ran faithfully without seeing any of the underlying values. That property, public auditability, is the real differentiator. How COTI Fits In None of this is theoretical for COTI. It is live. The same gcEVM cryptography has powered COTI’s mainnet since March 2025, the first on-chain implementation of Garbled Circuits in production. COTI gcEVM has powered real end-to-end encryption use cases such as 10-million vaccine ledger transactions, private RWAs with Zoniqx, and now private tokens with the COTI privacy portal. COTI pairs this with a dual-privacy stack: COTI GC for fast, programmable confidentiality, and COTI Nightfall, an enterprise-grade Zero-Knowledge rollup for regulated institutional workflows. Two techniques, one operator-defined posture, chosen per use case. That is the flexibility Yanai argues privacy infrastructure has to have. The Bigger Picture Yanai also points to where the technology is heading. Soda’s own product line now spans two shapes: the integrated approach COTI runs on, where privacy is a property of the chain, and a composable coprocessor an operator can add to an existing stack without migrating chains. Different form factors, same core idea: privacy the operator composes in, on their terms. Asked where he wants it to go, Yanai describes a large network of MPC nodes serving most of the financial activity on blockchains. His reasoning is pragmatic. Blockchains offer repeatable, structured use cases, token transfers, trades, settlement, so infrastructure can be built once and consumed many times. That repeatability, not the cryptography alone, is what makes the business scale. It reframes the question institutions will ask. Not “which privacy chain do I migrate to,” but “which privacy layer do I compose into the stack I already run.” That is the Privacy-on-Demand thesis, described from the cryptographer’s seat. Privacy that is selective, layered, programmable, and defined by the business. That is what the market is asking for. It is what COTI is already delivering. This piece adapts and paraphrases an interview by Stephen Webber for Proof Street. Read the original: Defining Privacy in MPC from the Operator’s Seat. Stay COTI. About COTI: COTI is the programmable privacy layer for Web3. Built for enterprises, builders, and agents. Powered by high-performance Garbled Circuits and enterprise-grade COTI Nightfall (ZK), COTI enables encrypted computation on any public blockchain. Fast, low-cost, and compliant privacy across DeFi, AI, and beyond. For COTI updates and to join the conversation, be sure to check out our channels: Website: https://coti.io/ X: https://twitter.com/COTInetwork YouTube: https://www.youtube.com/channel/UCl-2YzhaPnouvBtotKuM4DA Telegram: https://t.me/COTInetwork Discord: https://discord.gg/coti-foundation GitHub: https://github.com/coti-io Vibe Coders Telegram: https://t.me/+uuPNfRkKiQ03ZTcx
Multi-party computation obscures multiple inputs from multiple parties, with one verifiable result. COTI's gcEVM is the first production-ready Garbled Circuits on a live blockchain.
The full deep dive on COTI Garbled Circuits 👇 https://x.com/COTInetwork/status/2076663615759745457?s=20
Today, Vitalik, CZ, and the world's biggest banks are all saying the same thing: privacy is the unlock. 🔹 Institutions are fully committed to building on-chain 🔹 Privacy and compliance are their two non-negotiables
Amateo on what he heard firsthand at the EY Global Blockchain Summit. Watch 👇
Unlock the Power of Private Tokens 🛡️ Try the COTI Privacy Portal → $USDT, $USDC, $COTI, $wETH, $BTC + more → Send and receive p.tokens → Encrypted balances + you hold the 🔑
Stablecoins won. They settle trillions, anchor DeFi, and are fast becoming the way money moves online. But there is a catch hiding in plain sight. On a public blockchain, every balance, every payment, and every payroll run is visible to anyone who looks. That is the wall between stablecoins and the money still waiting to use them. It is also the wall COTI already took down. TL;DR → Stablecoins are a $300B+ market that moved a record $33 trillion in 2025, yet on public chains every balance and payment is exposed. → That transparency is the number one blocker to stablecoins’ biggest use cases: payroll, treasury, and B2B settlement. → COTI already shipped the unlock. Private stablecoins are live today (USDT & USDC) → With Privacy-on-Demand, that privacy is coming to the chains stablecoins already live on. The $300 Billion Market Everyone Can See Through Stablecoins are no longer a crypto experiment. They are mainstream financial rails. As of mid-2026, the stablecoin market sits above $313 billion (DefiLlama), and it moved a record $33 trillion in 2025, more than Visa and Mastercard combined (Bloomberg). The GENIUS Act gave the category legal footing in the US, and the institutions followed. Banks, custodians, and payment giants now settle in stablecoins. Digital dollars work. They are fast, global, and programmable. There is just one problem. On a public chain, a stablecoin balance is public. So is every transfer, every wallet balance, and every counterparty. The money is open for the whole world to see. The Blocker: Money Everyone Can Watch Here is where the story turns, because the biggest uses for stablecoins are exactly the ones transparent blockchains aren’t compatible with. Start with payroll. Paying a global team in stablecoins should be simple. But no company wants every salary, raise, and bonus posted to a public ledger for competitors, recruiters, and the entire internet to see. The reason is not speed and it is not fees. It is exposure. As Ken O’Friel, CEO of payroll firm Toku, put it: “Every public company CFO we talk to gets excited about stablecoins until they realize their payroll would be public. That’s where the conversation ends.” The same wall blocks treasury, where broadcasting your reserves invites front-running and worse, and B2B settlement, where invoice amounts and supplier terms are competitive secrets. Transparency, the property that makes public chains trustworthy, is the exact thing keeping real business money on the sidelines. What a Private Stablecoin Actually Is A private stablecoin behaves exactly like the stablecoin you already know. You hold it, send it, and receive it. What changes is what everyone else sees, which is nothing. The balance and the amount are encrypted on-chain, visible only to you. Under the hood, this runs on Private ERC20, COTI’s privacy-preserving token primitive. Balances, transfer amounts, and allowances are all encrypted. Each holder carries their own key, so only you can decrypt your balance. Even total supply stays confidential. The engine is Garbled Circuits, COTI’s approach to multi-party computation (MPC). It runs encrypted computation directly on a public chain, up to 3,000x faster and 250x lighter than alternative privacy solutions, and light enough to run on a phone. Here is the difference at a glance: The COTI Privacy Live Today This is not a roadmap promise. It is live. COTI’s Garbled Circuits mainnet has processed over 125 million on-chain transactions since it launched in March 2025. COTI’s flagship app, the Privacy Portal is live now, and has full support for private stablecoins. USDT and USDC are among the seven tokens the COTI Privacy Portal supports today, alongside COTI, wETH, wBTC, wADA, and gCOTI. Try the COTI Privacy portal → https://privacy.coti.io/ Portal In. Pick a public stablecoin at privacy.coti.io and make it private in one click. See it in MetaMask. Your private balance appears in the wallet you already use, through the COTI MetaMask Snap, decrypted locally on your device. Send privately. Move it on-chain for a fraction of a penny in gas, encrypted end to end. Portal Out back to public whenever you choose. The Billion Dollar Unlock Turn that switch on across a $300 billion market, and the money that has been waiting finally has a path. Confidential payroll. Pay a global team in stablecoins without publishing a single salary. Private treasury. Hold and move corporate reserves without broadcasting your positions. B2B settlement. Pay suppliers and invoices without exposing amounts or terms. Tokenized real-world assets and confidential lending. The next layer, with selective disclosure built in for auditors and regulators. Live on testnet today, with Zoniqx as the first privacy-enabled RWA. The thread connecting all of it is selective disclosure. Confidential by default, revealable to the right party when required. Privacy and compliance stop being a trade-off and start working together. The Bigger Unlock: Privacy Comes to Your Chain Most of that $300 billion does not live on COTI. It lives on Ethereum and other chains. The wrong way to bring privacy to it would be to ask the entire market to bridge somewhere else. COTI’s answer is the opposite, and it is called Privacy-on-Demand. Privacy-on-Demand brings COTI’s Garbled Circuits privacy stack natively to Ethereum and other leading L1 and L2 chains. Any app, token, or stablecoin on those chains can plug into COTI’s privacy layer for encrypted computation, without bridging to a separate network or changing tools. You do not migrate your stablecoin to COTI. COTI’s privacy comes to your stablecoin, on the chain it already lives on. COTI becomes a private backend, a privacy service layer for any EVM chain. One stack, one token, every chain. For stablecoins, that means the standard already running Web3 can simply run privately, everywhere, without moving a dollar of liquidity.Privacy-on-Demand is rolling out now, previewed on Ethereum testnet, and expanding to leading chains through 2026. Turn Privacy On Stablecoins proved digital dollars work. The missing piece was always privacy, built into the money itself, cheap and fast enough to use everywhere. A world where your balance is yours, payroll stays private, and businesses can finally put real money on-chain, on the chains they already use. That switch is here today on COTI, and it is coming to every chain the money lives on. That is the billion dollar unlock. Open the Privacy Portal, turn Privacy On, and make your stablecoins private. → Try the Privacy Portal: https://privacy.coti.io/ Stay COTI. About COTI: COTI is the programmable privacy layer for Web3. Built for enterprises, builders, and agents. Powered by high-performance Garbled Circuits and enterprise-grade COTI Nightfall (ZK), COTI enables encrypted computation on any public blockchain. Fast, low-cost, and compliant privacy across DeFi, AI, and beyond. For COTI updates and to join the conversation, be sure to check out our channels: Website: https://coti.io/ X: https://twitter.com/COTInetwork YouTube: https://www.youtube.com/channel/UCl-2YzhaPnouvBtotKuM4DA Telegram: https://t.me/COTInetwork Discord: https://discord.gg/coti-foundation GitHub: https://github.com/coti-io Vibe Coders Telegram: https://t.me/+uuPNfRkKiQ03ZTcx
Stablecoins moved $33 trillion last year. So why won't companies run payroll on them? Why are enterprises still unable to use them for payments?
Because on a public chain, every salary, transaction and amount is public. COTI fixed it. Private stablecoins are live today on the COTI Privacy Portal.
Full breakdown 👇 https://cotinetwork.medium.com/private-stablecoins-the-billion-dollar-unlock-05a3818fdd0b
ERC20 is the same standard on every EVM chain. Unlocking a world of tokens & DeFi. But always public.
COTI Private ERC20 changes that🛡️ Same standard, new privacy layer. Built to extend across every chain ERC20 already runs. Every chain needs privacy. No chain should have to build it from scratch.
How Private ERC20 makes the token standard that runs Web3 private by default. Full breakdown 👇
The enterprise privacy layer takes its first major step toward Ethereum mainnet. TL;DR → COTI Nightfall, our enterprise-grade ZK Roll-up for compliant privacy on Ethereum, is now live and running on internal testnet. → This is the first major milestone on the road to mainnet. → Testnet rolls out in two phases: internal testing with the team and partners, then open external testing with the community. → Nightfall is purpose-built for institutional and enterprise privacy, with compliance designed in from the start. → It runs alongside COTI GC, the fastest privacy protocol available, forming a dual privacy stack. Both networks are powered by the COTI token. The Enterprise Privacy Layer Is Running COTI Nightfall is live on testnet. The ZK Roll-up built for enterprise privacy is now running on internal testnet, and the road to Ethereum mainnet is officially underway. This is the moment the technology moves from architecture to a live, working network. Here is what Nightfall is, how it works, and what happens next. What Is COTI Nightfall? Nightfall is an open-source zero-knowledge privacy protocol originally built by Ernst & Young (EY) in 2019 and released to the public domain. It has evolved through significant upgrades, including a 2025 transition to a full ZK Roll-up architecture that delivers near-instant finality and improved performance. EY continues to actively support the protocol’s evolution. COTI Nightfall brings this proven ZK infrastructure into the COTI ecosystem as a dedicated Ethereum-based ZK Roll-up, purpose-built for regulated environments and institutional workflows. How It Works Nightfall enables confidential transactions on Ethereum while preserving the transparency, immutability, and security that enterprises require. Transactions are proven valid with zero-knowledge proofs, bundled into efficient roll-ups, and settled on Ethereum. Sensitive details stay confidential. Correctness stays verifiable. Key capabilities: Private transfers across multiple token standards: ERC-20, ERC-721, ERC-1155, and ERC-3525 Efficient ZK Roll-ups with near-instant finality Decentralized permissioning and KYC-gating for regulated environments Confidential smart contracts with end-to-end encryption Selective disclosure for regulatory compliance and multichain composability Built for Institutional Demand Demand for compliant privacy infrastructure is accelerating across tokenized real-world assets (RWAs), regulated payments, and institutional DeFi. Enterprises and institutions want the benefits of public blockchains and global liquidity, but they cannot move without privacy and compliance built in at every layer. That is exactly what Nightfall is designed for; end-to-end privacy of business use cases on the blockchain. Compliance is the starting point, not an afterthought: built-in KYC/AML workflows, auditability, and selective disclosure for regulators, end to end. Nightfall runs alongside COTI GC, our Garbled Circuits powered network and the fastest privacy protocol available, running up to 3,000x faster and 250x lighter than alternative privacy solutions. GC handles high-performance, low-cost confidential computation for builders and applications. Nightfall handles compliance-first institutional workflows. Two proven technologies, one ecosystem, and the right privacy primitive for every use case. Testnet Phases Phase 1: Internal testing (live now) The Nightfall testnet is live and running internally. The COTI team and select partners are testing core network flows, from private transfers to permissioning, hardening the network before it opens up. Phase 2: External testing Next, the testnet opens to extended partners and community testing. Builders and developers will be able to interact with Nightfall directly, test the network thoroughly, and help pressure-test it ahead of mainnet. The Road to Mainnet Mainnet deployment is planned for later in 2026, following the same disciplined rollout: Internal mainnet testing with the team and partners External public release, opening COTI Nightfall to everyone Each phase exists for one reason: enterprises adopt infrastructure that has been proven, not promised. Built alongside core partners and enterprises who need a viable privacy solution for the most important institutional and business use cases. One Token. Two Networks. The COTI token will be native to COTI Nightfall, just as it is on the COTI GC network. Tokens bridge 1:1 across chains, the maximum supply cap remains fixed, and no new tokens will be minted. What changes is utility. Protocol fees, gas, and privacy services will flow across two networks instead of one. More networks. More utility. More demand. What’s Next With the internal testnet live, the focus is on validating performance, stability, and compliance workflows with the team and partners. We will share progress updates throughout each phase, including how the developer community can join external testing when it opens. Privacy that institutions can adopt and regulators can trust is no longer theoretical. It is running. Time to build. Privacy On. Stay COTI. About COTI: COTI is the programmable privacy layer for Web3. Built for enterprises, builders, and agents. Powered by high-performance Garbled Circuits and enterprise-grade COTI Nightfall (ZK), COTI enables encrypted computation on any public blockchain. Fast, low-cost, and compliant privacy across DeFi, AI, and beyond. For COTI updates and to join the conversation, be sure to check out our channels: Website: https://coti.io/ X: https://twitter.com/COTInetwork YouTube: https://www.youtube.com/channel/UCl-2YzhaPnouvBtotKuM4DA Telegram: https://t.me/COTInetwork Discord: https://discord.gg/coti-foundation GitHub: https://github.com/coti-io Vibe Coders Telegram: https://t.me/+uuPNfRkKiQ03ZTcx
COTI Nightfall Testnet is Live 🔒 A major milestone for the enterprise privacy layer set to launch on Ethereum. The ZK rollup live and running on internal testnet.
Built for institutional & compliant privacy> onboarding the next-wave in enterprise privacy.