What if every action you took in a blockchain ecosystem, from holding tokens to making trades, earned you rewards automatically and daily? That's the premise behind COTI's latest initiative, a loyalty platform that challenges how crypto projects typically distribute tokens to their communities.
On September 29, 2025, COTI announced the launch of COTI Earn, allocating 12.5 million COTI tokens for its inaugural season. The platform represents a departure from standard airdrop mechanics that have become commonplace in crypto, where projects often reward simple tasks like following social media accounts or signing up for waitlists.
What Makes COTI Earn Different from Traditional Airdrops
Traditional crypto airdrops typically work as one-time distributions. Projects take a snapshot of wallet addresses at a specific moment, then distribute tokens based on predetermined criteria. Users might need to hold a certain token, complete social media tasks, or simply register for a platform. Once the tokens land in wallets, the engagement often stops.
Think of it like a store giving you a gift card just for walking through the door. You get the reward upfront, but there's no ongoing relationship or incentive to return.
COTI Earn operates differently. The platform introduces Token Points (TPs), which are minted on-chain and distributed to users' wallets daily based on their ongoing activities. According to the announcement, these rewards stem from multiple actions, including holding supported assets like wETH, wBTC, and USDC-e on the COTI Network, or COTI and gCOTI in the Treasury. Additional earning opportunities come from trading on PriveX or Carbon DeFi, participating in social channels, completing educational quizzes, and referring new users.
The distinction matters because it shifts the incentive structure. Instead of rewarding a single action, the platform creates sustained engagement loops. Users who maintain positions or continue participating accumulate more rewards over time. The TPs are liquid and on-chain, meaning users have immediate access to them rather than waiting for unlock periods or vesting schedules that often accompany airdrop distributions.
Shahaf Bar-Geffen, COTI's CEO, explains that the approach is a response to evolving on-chain activity.
"COTI Earn is designed to recognize real users and real contributions to the ecosystem," Bar-Geffen said. "As on-chain activity increases, loyalty platforms must evolve to be transparent, fair, and rewarding by design. Platforms running on vanity metrics simply won't stand the test of time."
Understanding the Mechanics: How Token Points Work
The COTI Earn system centers on Token Points as the core reward mechanism. These aren't abstract loyalty points stored in a centralized database. They're tokens minted on the blockchain daily, creating a verifiable record of rewards that users can track and verify independently.
Users begin by connecting their wallet to earn.coti.io. The platform automatically detects supported assets in connected wallets and begins calculating rewards. The structure favors larger holdings, operating on a proportional basis where more assets generate more TPs. This creates a direct correlation between commitment to the ecosystem and reward accumulation.
The platform incorporates several features common to gamified loyalty systems. Badges recognize early adopters and active participants, while boosters can multiply earning rates. Leaderboards add a competitive element, letting users compare their progress against others. New missions are introduced seasonally, providing fresh earning opportunities and preventing stagnation.
For users new to COTI, the platform integrates a bridging experience through Hyperlane Nexus. This addresses a common friction point in cross-chain ecosystems where moving assets between networks can be technically complex. By streamlining onboarding, COTI reduces barriers that might otherwise prevent participation.
The seasonal structure, with Season 001: Genesis now live, suggests an ongoing program rather than a limited promotion. This approach allows COTI to adjust reward pools, introduce new earning mechanisms, and maintain user interest through evolving challenges and opportunities.
COTI's Privacy Infrastructure and Strategic Positioning
To understand why COTI is launching a loyalty platform now, it helps to understand what the project actually does. COTI has positioned itself as a privacy-first blockchain infrastructure layer, addressing what it identifies as a fundamental limitation in current blockchain architecture.
Public blockchains are transparent by default. Every transaction, wallet balance, and smart contract interaction is visible to anyone. This transparency serves important purposes for verification and trust, but it creates problems for institutional and enterprise adoption. Companies generally don't want their transaction history, business relationships, or financial positions publicly visible. Similarly, individuals may have privacy concerns about exposing their complete financial activity.
COTI's solution involves Garbled Circuits, a cryptographic method that enables private computation on-chain. In simple terms, this technology allows smart contracts to process sensitive data without revealing the underlying information to everyone on the network. The result is what COTI calls "programmable privacy," where developers can choose what information stays private and what remains transparent.
The technology is already deployed across Ethereum and more than 70 other chains, according to the announcement. COTI has established partnerships with recognizable names in crypto, including MetaMask and MyEtherWallet for private payments, Bancor and Carbon DeFi for confidential decentralized finance applications, and organizations focused on real-world asset tokenization like Plume and the Tokenized Asset Coalition. The project also lists government partnerships with the European Central Bank and Bank of Israel for central bank digital currency research.
This context matters for COTI Earn because loyalty programs generate data. User behavior, transaction patterns, and engagement metrics all feed into how rewards are calculated and distributed. A privacy-focused infrastructure project launching a loyalty platform creates an interesting tension between data collection and privacy preservation. The announcement doesn't detail how COTI balances these concerns, but the platform's success may partly depend on how transparently it handles user data and privacy.
The Broader Shift in Crypto Incentive Design
COTI's approach reflects a broader conversation in crypto about how projects should distribute tokens and reward communities. The airdrop model, while popular, has documented weaknesses.
Sybil attacks, where individuals create multiple wallets to farm airdrops, have become sophisticated. Projects struggle to distinguish genuine users from those gaming the system purely for financial gain. This creates dilution problems where reward pools get distributed to mercenary participants who dump tokens immediately rather than contributing to ecosystem growth.
The vanity metrics problem Bar-Geffen referenced is real. Projects often optimize for numbers that look impressive in announcements, like total signups or social media followers, without ensuring those metrics translate to sustainable engagement. A Twitter follower who never uses a product provides minimal value, yet traditional airdrop criteria frequently reward such superficial participation equally with active users.
Several projects have experimented with alternatives. Points systems have become common, though many still culminate in a single token distribution event. Some protocols weight rewards based on usage levels or time spent in the ecosystem. Others incorporate NFT-based reputation systems or tiered structures that reward long-term participants more generously than newcomers.
COTI's daily distribution mechanism takes this further by eliminating the cliff moment when all tokens vest. Users accumulate rewards continuously, which could reduce sell pressure compared to airdrops where large allocations unlock simultaneously. The approach also maintains ongoing engagement by giving users a reason to return daily rather than completing tasks once and moving on.
Whether this model proves more effective than traditional airdrops remains to be seen. It requires users to check in regularly and maintain positions, which creates friction. Some participants may prefer the simplicity of completing tasks once and receiving a lump sum. The daily reward structure also means users with smaller holdings accumulate rewards slowly, which might not feel compelling compared to a larger one-time distribution.
Market Context and Competitive Landscape
COTI isn't alone in trying to solve loyalty and reward distribution challenges. The crypto space has seen numerous experiments with token incentives, each revealing different trade-offs.
DeFi protocols pioneered liquidity mining, rewarding users who provided capital to platforms. This generated enormous growth but also attracted mercenary capital that fled once rewards diminished. Many projects saw TVL (total value locked) collapse by 80 to 90 percent after initial incentive programs ended.
NFT projects tried similar approaches with holder rewards, raffles, and tiered benefits. These worked well for strong communities but couldn't manufacture engagement where underlying interest was lacking. Many projects discovered that rewards might maintain attention temporarily but couldn't substitute for genuine product-market fit.
More recently, the points meta has dominated. Projects from Blast to EigenLayer and countless others have issued points representing future token claims. This creates anticipation and sustains engagement through uncertainty about eventual conversion rates, but it also generates frustration and confusion. Users often don't know what their points are worth until the moment they're converted, making it hard to evaluate whether participation is worthwhile.
COTI's approach sits somewhere in between these models. The TPs are on-chain and liquid, providing more certainty than opaque points systems. Yet they're still distinct from the final COTI token reward, creating a two-step process. The announcement indicates TPs convert to COTI, but doesn't specify conversion rates or mechanisms, leaving some ambiguity.
The privacy angle also differentiates COTI's positioning. Most loyalty programs in crypto don't emphasize privacy infrastructure as a core value proposition. If COTI can demonstrate that its privacy technology enables better user experience or stronger guarantees around data handling, that could provide a competitive advantage. However, the announcement focuses primarily on the reward mechanics rather than how privacy technology enhances the loyalty program itself.
Challenges Ahead
Several questions emerge from COTI's announcement that will likely determine the platform's success or failure.
First, the economic sustainability of distributing 12.5 million tokens in Season 1 depends on whether this creates sufficient value for the COTI ecosystem to justify the cost. If rewards primarily go to mercenary farmers who immediately sell, the program could create downward price pressure without building lasting community. The emphasis on holding requirements and sustained engagement suggests COTI is trying to avoid this outcome, but execution will matter more than intention.
Second, the daily distribution mechanism could create user experience friction. Checking back daily works for apps with strong habit formation, but crypto users often prefer set-and-forget strategies, especially for long-term holdings. The platform needs to balance engagement requirements against user convenience to avoid creating busy-work that feels like a chore rather than a reward.
Third, the complexity of the system with badges, boosters, leaderboards, missions, and multiple earning mechanisms could overwhelm casual participants. While gamification can drive engagement, overly complex systems often advantage sophisticated users who optimize every detail while alienating newcomers who find the learning curve too steep.
Fourth, the reliance on holding specific assets creates dependency on COTI's partner ecosystems. If liquidity is thin for the supported assets, or if gas fees on COTI Network are high, users might find the friction of acquiring and holding these assets outweighs the reward benefit. The bridging solution through Hyperlane Nexus addresses part of this, but cross-chain complexity remains a barrier for many users.
Finally, the announcement doesn't clarify how rewards scale as more users join. If the 12.5 million token pool is fixed for Season 1, each additional participant dilutes rewards for existing users. This could create a tension between growth and reward value that many loyalty programs struggle to balance.
Final Thoughts
COTI Earn represents an iterative improvement on crypto reward distribution rather than a fundamental reimagining. The daily on-chain token drops address legitimate weaknesses in traditional airdrops, particularly around sustained engagement and transparent reward allocation. The emphasis on recognizing "real users and real contributions" responds to valid criticisms of vanity metrics driving token distribution strategies.
However, the platform's success will depend less on its structural design and more on execution details not fully addressed in the announcement. How effectively does COTI prevent gaming and Sybil attacks? What conversion rate will TPs have to final COTI tokens? How will reward pools be adjusted across seasons to maintain compelling incentives without creating unsustainable token inflation?
The broader strategic question is whether a loyalty platform meaningfully advances COTI's core mission around privacy infrastructure. If COTI Earn primarily functions as a marketing and user acquisition tool, it succeeds or fails based on cost per acquired user and retention metrics compared to alternatives. If it actually demonstrates privacy technology advantages that create better user experiences, it could validate the entire technology thesis while growing the ecosystem.
The crypto industry has seen countless experiments with token incentives, most producing short-term engagement spikes followed by collapse. What separates lasting programs from failed ones typically isn't the reward structure but whether the underlying product creates genuine value that users would engage with even without financial incentives. COTI's privacy infrastructure addresses real problems for institutional adoption. Whether retail users care enough about privacy to engage with COTI Earn for reasons beyond immediate financial rewards remains the central question.
For projects considering similar loyalty platforms, COTI's approach offers useful lessons. Daily rewards maintain engagement better than one-time distributions. On-chain transparency builds trust compared to opaque points systems. Multiple earning mechanisms accommodate different user preferences and reduce concentration risk. Yet none of these design choices substitute for fundamental product-market fit.
The 12.5 million token allocation suggests COTI views this as a substantial investment in community building. Whether that investment generates commensurate returns will become clear in the coming months as usage data and user retention metrics emerge. For now, COTI Earn stands as another data point in crypto's ongoing experiment with aligning token incentives with sustainable ecosystem growth.
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