IOTA Rebased Protocol Accepted: A Leap into Decentralization

IOTA’s Path to Decentralization: Protocol Upgrade Accepted

In December 2024, the IOTA community voted decisively in favor of adopting the IOTA Rebased protocol, marking a significant evolution toward a fully decentralized, programmable blockchain. With this acceptance, the IOTA Foundation swiftly launched a public testnet, setting the stage for mainnet release.

Why Rebased: Enhancing Core Values Through Strategic Evolution

Originally conceived as a feeless, scalable, DAG-based ledger optimized for IoT, IOTA’s Tangle architecture faced limitations under heavy usage. To overcome these challenges and maintain its innovative vision, the Foundation introduced a new Move-based blockchain protocol.

This architecture leverages the powerful and secure Move Virtual Machine (MoveVM), delivering efficient smart contract execution and practical applications across sectors such as:

1. Trade
2. Digital Identity
3. DeFi

Key Innovations in IOTA Rebased

Delegated Proof of Stake (DPoS) with Mysticeti

IOTA has adopted Delegated Proof of Stake (DPoS) via the robust Mysticeti consensus algorithm, ensuring network security and genuine decentralization.

Core elements include:

Table 1.1

Object-Oriented Ledger: A Fundamental Shift

The new ledger introduces an object-oriented structure, enhancing resource management and streamlining state transitions.

Object-Oriented Ledger Advantages:

Table 1.2

Maintaining Feeless Experiences: Sponsored Transactions

While minimal fees are necessary for economic sustainability, IOTA preserves its hallmark user-friendliness with Sponsored Transactions through the IOTA Gas Station.

1. Businesses and Developers sponsor transaction fees.
2. End-users experience seamless, near-feeless interactions.

Multi-VM Support: MoveVM & EVM Compatibility

The upgraded architecture supports both the MoveVM and the widely adopted Ethereum Virtual Machine (EVM), creating versatile opportunities for dApp developers.

Table 1.3

Real-World Adoption: Transformative Use Cases

Trade Logistics Information Pipeline (TLIP)

The Trade Logistics Information Pipeline (TLIP) leverages IOTA’s upgraded network, partnering with global organizations to digitize and optimize international trade:

1. World Customs Organization
2. Africa Customs & Trade
3. Kenya Ports Authority

Collaboration with Realize for DeFi & Asset Tokenization

IOTA collaborates with platforms like Realize to develop comprehensive DeFi ecosystems and tokenized asset exchanges, tapping into the enhanced blockchain capabilities.

Enhanced Scalability and Performance

The new Mysticeti-powered network significantly improves performance, capable of over 50,000 transactions per second (TPS) with sub-second finality.

Table 1.4

Economic Innovations: Liquid Staking and Stablecoins

IOTA introduces critical economic innovations:

1. Liquid Staking Tokens (LSTs) allow token holders to simultaneously stake and participate in DeFi.
2. Native Stablecoins provide regulated, institutional-grade financial opportunities.

Table 1.5

Mainnet Launch: Rebased Protocol Fully Deployed

Following the acceptance of the protocol, the IOTA Rebased public testnet underwent rigorous validation.

All critical phases were successfully completed, including:

✅ Security audits of the new protocol

✅ Deployment of advanced programmability via MoveVM and EVM

✅ Implementation of enhanced economic sustainability through staking, sponsored transactions, and improved tokenomics

With the successful completion of all phases, the new protocol has now transitioned seamlessly to the IOTA Mainnet, delivering:

1. Full decentralization
2. Advanced programmability
3. Enhanced economic sustainability