The IOTA ecosystem is on the brink of a transformative upgrade with the introduction of IOTA Rebased, a comprehensive overhaul designed to enhance security, scalability, and functionality. This ambitious initiative moves the protocol from a UTXO-based system to an Object-Based model, introduces smart contracts on Layer 1, and revamps tokenomics, making IOTA more competitive in the evolving blockchain landscape.
A Shift to Object-Based Architecture
One of the most significant changes in IOTA Rebased is the adoption of the Move Virtual Machine (MoveVM), which replaces the traditional UTXO model with an Object-Based system. This transition enhances:
- Flexibility – Enabling resource-oriented programming for secure and efficient digital asset management.
- Efficiency – Simplifying resource management and improving transaction speeds.
- Security – Implementing static verification to detect errors and vulnerabilities before code execution.
This shift opens the door for complex financial instruments, decentralized exchanges (DEXs), and supply chain applications, which were previously limited under the UTXO model.
Layer 1 Integration of Multiple Execution Environments
IOTA Rebased is set to bring the Ethereum Virtual Machine (EVM) to Layer 1, ensuring that existing dApps on the IOTA EVM (currently an L2 network) remain viable and can integrate seamlessly. This will boost network activity, enhance security, and increase decentralization, while also driving up IOTA token burns through increased transaction fees.
New Products and Developer Tools
To support the transition, IOTA is launching:
- A new browser-based wallet to replace Firefly, offering seamless staking and asset management.
- Updated SDKs and CLI tools for Rust and TypeScript developers.
- An improved IOTA Explorer, providing real-time insights into transactions and validator metrics.
Also Read: IOTA Identity: Revolutionizing Decentralized Digital IDs
Tokenomics Overhaul and Staking Rewards
IOTA will transition to a transaction fee model, balancing fees with high staking rewards. Key changes include:
- 6% initial inflation, decreasing over time with 767k IOTAs minted per epoch.
- Deflationary pressure from burned transaction fees.
- Minimum validator staking of 2M IOTAs, with delegation options.
IOTA Rebased marks a major evolution in the ecosystem, bringing real-world crypto adoption closer. With improved scalability, enhanced security, and a robust tokenomics model, IOTA is poised to become a leading blockchain infrastructure in the years ahead.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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