Nodes in the COTI network

COTI provides a decentralized solution that is designed to enable secure and trustworthy payments. This solution relies on the distribution of Trustchain responsibility to several types of nodes that are run by network users. Nodes are needed to verify transactions and to ensure that the COTI network remains safeguarded against potential fraud and cyber manipulation, such as double spending attempts, penny spend attacks, sybil attacks and more.

There are four types of nodes in the COTI network, including Full Nodes, DSP Nodes, Trust Score Nodes, and History Nodes. The most common node type is a Full Node. We expect the number of Full Nodes to be in the hundreds, or potentially thousands at network maturity, while a reasonable number of DSP Nodes will be in the dozens and a lesser amount for Trust Score Nodes.

In the current development stage, Full Nodes are the only available nodes that can be run by network users. DSP Nodes and Trust Score Nodes will also be operated by users as the network matures.

COTI’s Full Nodes

Full Nodes are the main client-facing servers of the system. Each transaction sent from a wallet is received by a Full Node and propagated to the entire system. Full Nodes perform Trustchain Consensus by receiving new transactions from wallets, validating them, doing Proof of Trust and attaching them to the DAG. Full Nodes also execute COTI smart contracts in a decentralized manner. On the COTI network, Full Nodes can define their own price list for users and compete for them. Consequently, COTI Full Nodes are responsible for collecting fees on all protocol usage and transferring the network fee to the network pool.

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The incentives for running a Full Node

✓ Simple, inexpensive and easy to run Full Nodes

✓ All node operators can earn profits from running nodes

✓ Node operator Trust Scores increase in line with the amount of work performed for the COTI network

✓ Merchants can run nodes and set their fees to zero to attract more customers

When running nodes, operators provide the network with useful resources, including CPU, memory, storage and network bandwidth. These resources are not cost-free, which is why node operators are compensated and have the opportunity to earn a reasonable ROI.

Full Node operators receive fees collected from transactions. The more transactions that a Full Node processes, the more it earns.

Introduction to COTI’s staking model

COTI’s staking model is built to be competitive to decentralized finance (DeFi) income models and provides a means to generate a steady income from the process of transaction approval on the COTI network.

The economic model of COTI nodes is designed to be fair, efficient and flexible and is based on finely tuned fee distribution mechanisms and staking requirements.

As real world transactions are usually denoted in fiat currencies and node operator fees are a percentage of these transactions, a natural hedge for the COTI coin price is created. This is a major advantage over other staking models and currencies.

All nodes are required to deposit (stake) COTI native coins to participate in the network, although the requirements are different for various node types. DSP Nodes and Trust Score Nodes, which are more substantial components of the network foundation, require higher staking than Full Nodes.

Transactions in the COTI network

In the COTI network, transactions are created according to several patterns defined by the transaction type. The most common types are payment for goods or services, remittance payments and singular transfers.

In the first two cases, a transaction originator creates a payment request, and the transaction is created according to it. The transaction originator must input the Full Node address in the payment request in order to pre-select the node (a Full Node is selected by users for singular transfers).

COTI provides an automated tool for Full Node selection, enabling a merchant, or any other transaction originator, to choose nodes according to the specified criteria. Merchants also have the ability to run Full Nodes themselves

Full Node operators set fees autonomously, which makes setting competitive fee structures important. If a user knows a Full Node with a better price list, it can be re-selected when sending transactions.

Important note: server throughput is limited, so large merchants can work with a pool of Full Nodes which are chosen at random at the time of transaction.

How Full Nodes collect fees

As a rule, Full Node fees are collected in the same token as the main payment. Full Nodes are free to define which tokens they process and accept for fees and those they do not.