IOTA, a pioneering Layer 1 network since 2015, introduced innovations like the first Directed Acyclic Graph (DAG)-based Distributed Ledger Technology (DLT) and has evolved through major upgrades like Chrysalis and Stardust. With Stardust, IOTA launched EVM-compatible smart contracts, reaching $90M highs in TVL during 2024.
To accelerate adoption, IOTA is pivoting from its long-term IOTA 2.0 roadmap to IOTA Rebased, introducing MoveVM programmability directly on Layer 1 and replacing the UTXO model with an Object Model inspired by Sui’s architecture. This pragmatic shift enables faster development and sets the stage for a multi-VM L1 future centered on real-world asset (RWA) utility.
Report Scope Summary
This report will cover:
- IOTA’s evolution since 2015, culminating in the launch of IOTA Rebased with support for both MoveVM (L1) and EVM (L2)
- Advantages of MoveVM, its capabilities/alignment with IOTA’s long term vision
- Overview of IOTA’s ecosystem, including initiatives and partnerships that position it as a leader in practical utility and enterprise adoption
- Path to mainnet for IOTA Rebased, covering tokenomics and real-world adoption
The Evolution of IOTA
Early Beginnings of IOTA – IOTA 1.0
Launched in 2015, IOTA introduced the first DAG-based ledger, the Tangle, using probabilistic consensus via random walks. Designed for IoT, it was funded by a 1,300 BTC crowdsale without VC backing.
IOTA offered a feeless, minerless and leaderless network, publishing 65+ research papers and focused on researching new architectures rather than legacy improvements. IOTA aims to enable a connected, trusted and accessible digital world through real-world use cases.
Journey to Stardust and EVM L2
Between 2020 and 2021, Chrysalis transitioned IOTA’s L1 to a UTXO model, focusing on token transfers and adopting EdDSA. In 2023, Stardust introduced a multi-asset ledger and decentralized control via a Distributed Validator Committee.
In parallel, the IOTA Smart Contracts (ISC) initiative launched in 2021 to meet demand for programmability – culminating in May 2024 with an EVM-compatible L2. Since then, over 30 native dApps and major projects like Pyth and LayerZero have gone live.
Where IOTA is today – The Bottlenecks of IOTA 2.0
IOTA 2.0 aimed to bring full L1 programmability, feeless transactions, decentralization through Delegated Proof Of Stake (dPoS) and leaderless consensus, using the Mana token.
Though vital to IOTA’s long-term vision, the rollout will span several years.
The route to programmability – Source: IOTA
Accelerating IOTA’s Adoption through IOTA Rebased:
To accelerate progress – enabling a faster path to L1 programmability and decentralization, the Rebased Governance Proposal was introduced in November 2024 to replace IOTA 2.0.
It proposed integrating MoveVM at L1 and shifting to a dPoS validator model. The community overwhelmingly supported it, with 98.37% voting in favor by December 2024.
To support the rollout, a public Testnet and Devnet with mainnet data integration was launched concurrently during the period of governance voting. The mainnet is scheduled for an end April – early May 2025 launch, following a minimum of two months validator checks, audits and stress testing.
IOTA Rebased: Modern Advancements with Real World Adoption
Introduction to IOTA Rebased:
IOTA Rebased brings Move-based smart contracts directly to Layer 1, enabling native programmability alongside the existing IOTA EVM Layer 2.
This marks a major upgrade, moving IOTA toward full decentralization (removal of the Coordinator) while supporting both MoveVM and EVM environments.
After assessing various options, IOTA adopted Sui’s version of MoveVM as the foundation for its object-based DAG ledger due to its robust and advanced architecture for smart contract deployment.
Various stages in the push for L1 Programmability – Source: IOTA
Key Features of IOTA Rebased:
Staking & Rewards: Initial APY of 10 – 15%, with starting inflation of 6 – 7% annually. Rewards will be distributed across a permissionless network of up to 150+ validators, as the network scales accordingly.
Performance: Object-based DAG ledger using dPoS and Mysticeti (same as Sui), enabling sub-second finality, low latency and throughput up to 50,000 TPS.
Fee Market Evolution: Introduces low transaction fees (departure from IOTA’s feeless design), plus a fee-burning mechanism – unlike Sui, which does not burn fees.
A Dive into MoveVM:
With IOTA Rebased centered on MoveVM, it’s essential to understand what it is and the advantages it brings.
Key Features of Move
Move is a smart contract language with Rust-like syntax, created by Meta’s Libra team. It prioritizes security, flexibility and asset safety, treating assets as first-class citizens with distinct features:
Object Centric Design
Move enables intuitive modeling of complex structures. Every asset – token, account, or contract – is an object with clear ownership.
Unlike traditional chains where assets are stored in mappings (e.g ERC-20), Move assets exist independently and are directly owned by accounts. Objects can even own other objects, enabling use cases like dynamic NFTs.
For example:
If Satoshi transfers 1 USDC to Nakamoto, the 1 USDC object updates ownership from Satoshi to Nakamoto – requiring only one state update.
Illustration showcasing how only one ledger update is required – Source: Memento Research
This contrasts with existing blockchains where balances are updated inside contracts, and users interact through the contract rather than directly owning assets.
Performance
MoveVM enables parallel execution by removing global shared state. Its object-centric model allows concurrent transactions, boosting throughput, reducing congestion and lowers gas fees.
Owned Objects (e.g personal tokens) are tied to individual accounts. When Satoshi transfers 1 USDC to Nakamoto, the transaction can skip full consensus because it only affects Satoshi’s owned object.This allows fast execution without global ordering.
Analogy of this:
With $100 in your pocket and $100 in your wallet, you can spend both at once (Object Basis). Traditional chains require using one before the other.
Shared Objects (e.g Marketplaces) still require consensus but can be parallelized across different shared objects.
Security
Move emphasizes safety and efficiency, drawing from Rust’s ownership model.
Its compiler enforces strict rules that catch errors before deployment. The type system ensures resource safety, reducing bugs like double-spending or unauthorized access.
The object-centric design gives users true asset ownership – unlike other blockchains where contract compromises can cause fund loss. In Move, ownership is direct: if you own it, you control it.
Example: Withdrawing cash from your bank gives you control to do anything with the cash without requiring the bank – just like owning a Move object removes dependency on contracts.
Its resource-oriented model treats assets like tokens and NFTs as protected resources, strengthening overall network integrity.
How Move Resolves Existing Issues on EVM
IOTA supports Solidity on its EVM Layer 2, but Solidity wasn’t built with asset safety as a core principle. Move offers a more secure, resource-oriented alternative.
By supporting both EVM and MoveVM, IOTA Rebased lets developers migrate existing EVM apps or build new, secure, scalable ones.
Key Differences between EVM/Solidity and Move – Source: IOTA Documentation
Below are common Solidity/EVM challenges – and how Move addresses them:
1. Cost and Performance
EVM relies on a global shared state – while practical, this doesn’t scale well:
- Gas fees spike during congestion
- Throughput is limited, pushing activities to L2 with trade-offs.
Move’s object-centric model eliminates the need for global shared state:
- Owned-object transactions run in parallel without full consensus (fast path)
- Shared objects can also be executed in parallel if non-conflicting.
This boosts scalability and lowers transaction fees by removing blockspace competition.
2. Security and DevEx
Solidity was the first major smart contract language, but struggles with secure coding:
- Coding mistakes can lead to issues like reentrancy bugs or approve() exploits
- Solidity’s flexibility often bypasses compiler checks, increasing risks and audit cost
Move was designed with security in mind:
- Rust-like syntax with a strict typing system.
- Compiler and bytecode verifier catch most issues pre-deployment
- Enforces ownership and access control at language level
Example: Reentrancy attacks
In Solidity, when a contract sends ETH to a user, it triggers their fallback function. Hackers can exploit this to drain contracts before they update (like draining a “vending machine” before it updates the stock). In Move, transferring an object does not call external code automatically, eliminating reentrancy risks.
Re-entrancy Attack Pictured – Source: Quantstamp
Example: Approve() attack
On Ethereum, the approve() function gives dApps permission to spend tokens up to a specified limit. If a contract is hacked, attackers can drain the full allowance or exploit race conditions.
In Move, you either own the asset or you don’t – there’s no stored approval logic, eliminating this vulnerability.
This makes Move safer by design and easier for developers to build without worrying about security traps.
Examples of Issues with Approve() – Source: ACM
3. Tokens and Standards
On EVM chains:
- ERC-20 tokens and NFTs are smart contract standards, not native assets.
- Asset discovery requires knowing contract addresses.
- Wrapped tokens are needed to bridge gaps between native assets (ETH) and ERC-20 tokens.
In Move:
- Tokens are native objects directly residing in user accounts.
- No distinction between native or custom tokens.
- Users have full ownership and control of their assets without relying on smart contracts.
This improves composability, letting assets like NFTs and coins nest inside each other. Developers gain more direct and intuitive control at both contract and asset levels.
IOTA Rebased: Network Architecture
IOTA Rebased draws heavily from Sui’s architecture and MoveVM, adopting proven practices for efficient deployment on IOTA’s L1. IOTA aims to help accelerate Move adoption across Web3.
Consensus
IOTA Rebased combines dPoS with Mysticeti BFT for a high-performance consensus framework, enabling low latency (0.5 – 1s), high throughput and fast finality.
dPoS acts as the overarching consensus layer, where token holders delegate votes to validators, who validate and produce blocks while executing Mysticeti to finalize transactions. Staking rewards and slashing align economic incentives with network security.
Mysticeti – the BFT consensus protocol within IOTA Rebased, uses an uncertified DAG that finalizes blocks in three rounds, enabling parallel transaction processing. Its architecture supports multiple block proposals in parallel, reducing latency and communication overhead while tolerating faulty/malicious validators.
These combined properties enable a low-latency, high-throughput and resilient consensus that is optimized for real-world Web3 applications.
Life Cycle of a Transaction
Transactions in IOTA Rebased follows a flow similar to Sui.
Overview Denoting Transaction Lifecycle – Source: IOTA Docs
- Transaction Submission:
The user submits a signed transaction through their wallet. It may involve an owned or shared object. - Broadcast to Validators:
The wallet sends the signed transaction to a full node, which forwards it to validators. The validators verify it, lock the involved objects, sign and return the signed transaction to full node. - Transaction Certificate Assembly:
Once the client or node collects enough signatures, it assembles a transaction certificate – offloading this task from validators, unlike traditional models. - Execution by Validators:
The certificate is sent to validators, who verify, execute the transaction and unlock the objects.
– Owned Object Path (Fast Path):
The transaction is executed instantly with immediate finality – no consensus required.
– Shared Object Path (Consensus Path):
The certificate goes through DAG consensus to ensure global, conflict-free ordering before execution. - Effect Certificate & Settlement:
After execution, the full node collects responses from the supermajority of validators to assemble an effect certificate. Once a quorum is reached:
– Owned objects are already settled after execution.
– Shared object transactions are now finalized after consensus sequencing. - Checkpointing:
Each consensus commit creates a checkpoint, making included transactions immutable and final.
Staking on IOTA Rebased
IOTA Rebased adopts a dPoS mechanism to select validators each epoch, with a maximum of 150 validator seats initially. Validators are chosen based on delegated stake and can leverage token holder’s delegation to meet thresholds.
To join the active validator set:
- Minimum stake of 2M IOTA must be maintained.
- Seven-epoch grace period is given to regain sufficient stake if stake falls below 1.5M.
- Auto removal if stake falls below 1M at epoch end.
Requirements to setup a Validator Node – Source: IOTA
Each epoch lasts 24 hours, during which the validator set and stake amounts remain constant.
At the end of each epoch:
- Staking rewards and the validator set are reconfigured
- Validators earn rewards from a fixed inflation of 767,000 IOTA tokens per epoch, distributed by stake weight and commission.
- Transaction fees are burned and not included in validator rewards.
Gas Station Feature
IOTA Rebased enables gas-sponsored transactions on mainnet, allowing developers or businesses to cover gas fees for users, driving adoption by letting users interact with dApps without needing to buy, hold, or manage IOTA.
Process Flow on Sponsored Transactions – Source: IOTA
The IOTA Gas Station will be an open-source, configurable module:
- Developers can configure easily and deploy via Docker.
- Users retain full control of assets while sponsors pay transaction fees.
- Built-in access control and cost limits help predict costs and prevent misuse.
This supports IOTA’s mission to reduce friction and boost user acquisition, retention and engagement.
IOTA’s Ecosystem and The Road to Real World Adoption
IOTA Ecosystem Overview and Its Potential
Nascent IOTA EVM L2
IOTA has made major strides, especially with the 2024 launch of IOTA EVM. It reached a peak of $90 million in TVL and $1.65 billion in IOTA volume, reflecting strong initial demand for Layer 2 programmability.
Overall increase in activity since introduction of L2 – Source: DefiLlama
Although interest has moderated, activity remains above pre-launch levels due to broader dApp offerings. Despite being early-stage, several dApps have launched on IOTA EVM. For instance, Deepr Finance, a decentralized lending platform, has processed over 1.2 million transactions and reached a peak of $36 million TVL.
Existing Overview of IOTA EVM L2 – Source: Memento Research
IOTA EVM L2 remains at an early stage but shows potential for growth, with over 30 native dApps deployed since launch, providing a solid base for further ecosystem expansion.
Growth Potential Driven by Move Language Adoption
Across Web3, developers are shifting away from EVM. Statistics from Developer Report indicates that monthly active EVM developers peaked at 15,500 in Nov 2022, dropping 17.7% year-over-year during 2024.
Declining developers in EVM Stack – Source: Developer Report/Electric Capital
In contrast, Move based ecosystems like Sui and Aptos experienced significant growth. Monthly active developers on the Move stack increased 50.4% year-over-year in 2024, reaching an all-time high of 1,700 developers.
Growing Interest in the Move Stack – Source: Developer Report/Electric Capital
This surge can be attributed to the Move language’s emphasis on DevEx, security and ease of adoption. Despite its recent emergence, Move is gaining traction as it reduces many of the frictions found in earlier programming models.
Currently, Move devs account for just 6.5% of all Web3 developers – compared to 13.6% on Solana and 42.1% on EVM – leaving substantial room for growth.
With blockchain developers still <0.1% of the global JavaScript talent pool, Move’s accessibility could help foster mass developer adoption.
Dual Virtual Machine Advantage – MoveVM and EVM
IOTA is uniquely positioned as the only chain offering both MoveVM and EVM, allowing it to tap into both developer ecosystems. This flexible approach enables:
- Seamless porting of dApps from other EVM chains
- Move developers to build natively on IOTA’s MoveVM.
Additional research plans are also underway to consider bringing EVM to Layer 1, ensuring existing EVM dApps remain integrated.
Strong Partnerships Securing Real World Adoptions:
IOTA continues to show commitment to real-world impact through strategic partnerships across government, industry and regulators. Many MVPs have matured into live applications onboarding users, transactions and tokenized assets to IOTA’s mainnet. The upcoming IOTA Rebased upgrade is set to accelerate this momentum.
A. Trade Worldwide Information Network (TWIN)
TWIN tackles inefficiencies in global trade by enabling real-time, privacy-preserving cross-border data sharing. It connects supply chain actors in real-time and has onboarded major partners including:
- Trademark Africa
- World Economic Forum
- Tony Blair Institute for Global Change
- Global Alliance for Trade Facilitation
- Institute of Export and International Trade
Process flow of how TWIN Operates – Source: TWIN
One major use case is TLIP (Trade and Logistics Information Pipeline), deployed in Kenya via the Kenya Revenue Authority. TLIP manages real-time data sharing between border agencies and exporters (e.g., tea and flowers to the UK) and has reduced transaction costs by 80% and processing times from 25 to 1 day.
The end goal is to digitize goods transport, tokenize the value chain (including physical and financial assets), and create a trade finance ecosystem on IOTA, unlocking new DeFi opportunities based on real-world assets.
B. Realize
IOTA recently took a major step toward becoming a foundational settlement layer for real-world asset tokenization. In collaboration with Realize – a regulated tokenization platform authorized by Abu Dhabi Global Market (ADGM) – the first product ($RBILL) has launched on the IOTA network. $RBILL represents tokenized short-term U.S. Treasury Bills, offering compliant, liquid exposure to government-backed yield. In the future, additional tokenized funds will be added.
This milestone unlocks borderless access to traditionally siloed financial instruments and demonstrates how IOTA’s feeless, scalable architecture can serve institutional-grade use cases. With programmability and high throughput at its core, IOTA is paving the way for a decentralized financial infrastructure.
The partnership also aims to enable composable utility across the DeFi ecosystem. Through seamless integrations, tokenized assets can become building blocks for collateral, liquidity, and advanced financial products – all anchored to IOTA’s secure and decentralized settlement layer.
C. Regulatory Compliance
IOTA has achieved key compliance milestones:
- First DLT foundation registered with ADGM.
- Shari’a-compliant certification for the IOTA token, unlocking access to Islamic financial markets.
- Active participation in regulatory discussions across Kenya, EU, UK, France, Australia and Singapore – positioning IOTA at the regulatory forefront in MENA and beyond.
D. European Blockchain Pre Commercial Procurement (PCP)
IOTA was selected as one of the three final projects in the European Blockchain PCP, part of the European Blockchain Sandbox funded by the European Commission, aiming to enhance the EBSI (European Blockchain Services Infrastructure) and future EDIC.
IOTA’s solution enhances EBSI through:
- Smart contract integration
- Object traceability for real-world applications
The key use cases of this includes:
D.I. Digital Product Passports
- Promote sustainability by making product data accessible across supply chains.
- IOTA smart contracts track electronics from production to recycling. Partnering with Digimarc supports plastic recycling traceability.
- Tokenized as NFTs, passports serve as certificates of origin and collateral for lending.
D.II. Intellectual Property (IP) Management
- In partnership with Musika Peripherika, IOTA is building a decentralized IP rights marketplace.
- Smart contracts automate royalty distribution, ensuring fair, transparent compensation for artists.
E. Tokenized KYC
IOTA works with walt.id, IDnow, Bloom Wallet, and HAVN on a tokenized KYC solution for privacy-preserving dApp authentication.
Key features of this includes:
- GDPR compliant KYC/AML checks
- Soulbound NFTs represent KYC credentials, bound to wallet address.
- dApps can easily check the presence of a KYC token to allow or deny access, without storing personal data.
This model helps to resolve privacy issues while ensuring regulatory compliance.
Tokenized KYC Flow – Source: IOTA
F. IOTA Identity
The alpha release of IOTA Identity for MoveVM testnet brings DIDs and verifiable credentials to IOTA’s on-chain architecture. Migrated from Stardust, it now offers enhanced programmability while maintaining off-chain privacy.
Trust Triangle of IOTA Identity – Source: IOTA
Based on W3C DID standards, it links DIDs to people, devices, or objects for secure, off-chain claim verification
The main actors involved in IOTA Identity are identified as:
- Identity Holders: Control their digital identities via DIDs.
- Issuers: Provide verifiable credentials to Identity Holders.
- Verifiers: Request proof of specific claims (e.g verifying someone holds a driver’s license without seeing all personal details).
By offering IOTA Identity, this can unlock numerous use cases across IoT, government services, healthcare, supply chain and finance.
Initiatives to Grow IOTA’s Ecosystem
IOTA has rolled out several initiatives to expand and strengthen its ecosystem, focused on developer onboarding and real-world adoption.
IOTA Tenity RWA Accelerator Program
The 12-week program in 2024 supported startups building real-world asset (RWA) solutions. It aimed to onboard builders onto IOTA EVM and equip them with scaling resources.
Key features:
- Grants: US$50,000 per startup, no equity taken
- Marketing: Up to US$10,000 extra support per startup
6 finalists were selected: Orobo, AuvoDigital, Decentralized Factoring, Qiro Finance, The Real Lifestyle, and Black Frog – each building solutions across digital identity, tokenized assets, real estate, commodities and RWA finance using IOTA’s infrastructure.
IOTA Grants Program
Launched in 2024 by the IOTA DLT Foundation to support open-source development, research, education, and events.
- Season 1: 144 applicants, 32 grants awarded, $3.5M distributed
- Season 2 (2025): 54 applicants, 2 grants approved so far – $10M in total funding available
The program aims to grow developer activity on both IOTA Rebased and IOTA EVM.
BuildSphere
BuildSphere is an initiative by the IOTA Foundation spotlighting ecosystem projects via AMA/interview sessions on X.
Launched in May 2024, it has featured over 28 episodes, helping the community understand project goals and the teams behind them.
Business Innovation Program
BIP was launched to prepare for Rebased mainnet and aims to support real-world solutions with targeted funding and support.
Program structure:
- Funding: Up to €100,000 per applicant.
- Support: Marketing, technical assistance and mentorship.
- Deadline: Applications accepted until 31 December 2025.
Areas to build upon for the Business Innovation Program – Source: IOTA
The focus is on projects that deliver measurable on-chain activity (e.g., asset issuance, transactions) tied to real-world use cases. Funding is milestone-based, measured by on-chain metrics on the L1 mainnet.
3 projects have already been accepted in Q1 2025, with more on the way.
IOTA Moveathon
IOTA will launch its first MOVE hackathon for the APAC region, running for 9 weeks leading up to June 2025.
Over US$150K in prizes will be awarded to incentivize builders to create on IOTA Rebased’s L1 using MoveVM.
The hackathon aims to target four tracks which are
- Payments and Consumer Applications
- Real World Application in Tokenization and Global Trade
- DeF(A)i
- Tooling and Infrastructure (Including Chain Abstraction, Digital Identity, EVM & Move, Cross Chain Transfers)
The Road Ahead for IOTA
While the current Rebased Mainnet is largely based on Sui’s architecture – with some tokenomics modifications – the IOTA team is already working on further enhancements. Research has begun on upgrades expected to be rolled out iteratively, pending community approval once ready.
Additional enhancements to be developed moving forward. Source: IOTA
A. Resilient Consensus through Starfish Consensus
IOTA Rebased currently uses the Mysticeti protocol, based on Sui’s implementation. To enhance Byzantine fault tolerance, IOTA is developing Starfish Consensus, with a research paper nearing release.
Simulations show that Starfish:
- Handles up to 1/3 Byzantine nodes in partially synchronous networks
- Maintains stable latency and higher throughput than Mysticeti
- Achieves 200,000 – 300,000 TPS across 10 – 100 validators
- Delivers sub-second latency for up to 150,000 TPS
B. Fair Gas Price
IOTA Rebased shifted its tokenomics model to long-term, inflation-based rewards, unlike Sui’s model, where subsidies are only temporary.
Also, the team is exploring a protocol-level fee algorithm to:
- Reflect network congestion and shared object popularity
- Enable localized fee markets like Solana
- Minimize validator control over base gas pricing
C. Dynamic Committee Selection
Unlike Sui, where validator sets remain fixed during epochs, IOTA Rebased will allow validators with higher stake to join the active set during an epoch.
This change aims to:
- Encourage more competitive participation among validators.
- Help maximize network security.
D. MultiVM: A Multi-Environment Future
While MoveVM is the primary environment, IOTA plans to invest in additional research that could integrate multiple VMs on Layer 1 in the future.
IOTA’s MultiVM Vision. Source: IOTA
The research will first focus on bringing EVM to Layer 1, ensuring existing L2 dApps stay integrated and supported – before expansion of research scope to cover other VMs.
Over time, expanding VM support will enhance developer flexibility, strengthen security and drive greater on-chain activity on L1, leading to increased fee burning, contributing to a deflationary tokenomics model.
$IOTA Tokenomics
With the launch of IOTA Rebased, all 4.6bn IOTA tokens will be migrated from the Stardust Network at mainnet.
Post-migration, 767,000 new $IOTA tokens will be minted per epoch (roughly every 24 hours).
There is no max supply, similar to Solana, marking a shift from Sui’s fixed-supply model. The total supply will adjust dynamically based on inflation versus fee burning.
Migration from Stardust
The existing maximum supply on Stardust network is 4.6bn tokens, with over 80.6% unlocked, thanks to IOTA’s ICO-funded launch.
Unlike many projects today, IOTA has no large VC unlocks, avoiding low float and high FDV scenarios that are frowned upon in modern projects.
Utility of $IOTA
IOTA will mainly be used for the following purpose:
- Staking: Participation in dPOS to contribute to network security
- Transaction Fees: Used for gas and storage fees for transactions – departing from IOTA’s historical feeless model
- Value Transfers: Acts as a medium of exchange, unit of account or store of value serving as a liquid asset to be used in the ecosystem.
- Governance: Holders can vote for on-chain governance matters like protocol upgrades.
Economic Model for $IOTA
Transactions incur two types of fees: computation and storage.
Gas price follows a fixed reference price at launch, with optional tips for priority. In future, dynamic pricing will be added to enable price discovery.
Computation fee = computation units * (reference gas price + tip)
Storage fees are paid upfront and priced to cover the cost of maintaining one unit of storage in perpetuity, with the price determined through governance proposals.
Storage fee = storage units * storage price
Deleted objects return 100% of the storage fees to users, which differs from Sui’s partial rebate model.
Thus, the net gas fee for a transaction is calculated as:
Net gas fees = computation fee + storage fee – storage rebate
Burn and Mint Mechanics of $IOTA – Source: IOTA
IOTA uses a minting mechanism to incentivize node operators, similar to PoS networks like Solana, with no maximum supply.
Unlike Sui’s fixed-supply model, IOTA mints 767,000 tokens per epoch, starting with ~6% annual inflation that gradually declines as the per-epoch amount stays constant.
To offset inflation, 100% of computation fees are burned, creating deflationary pressure. As a result, IOTA’s supply adjusts dynamically with network activity.
Final Thoughts
IOTA’s Unique Advantage
Once regarded as a “dino coin” built for IoT, IOTA has realigned with Web3’s evolving demands by prioritizing programmability. Starting with an EVM-based Layer 2, IOTA has advanced to IOTA Rebased, which introduces MoveVM at Layer 1 and transitions from a UTXO ledger to an object-based DAG model using Mysticeti.
While IOTA 2.0 was initially designed to meet long-term decentralization goals, the team accelerated its roadmap with IOTA Rebased to meet immediate adoption needs and deliver L1 programmability sooner.
This transition preserves architectural continuity while unlocking new capabilities. IOTA’s flexibility has made it the first to support both EVM and MoveVM, enabling developers to build or migrate across ecosystems with ease.
With Move’s focus on security and developer experience, IOTA reduces barriers for new builders. As more developers join, the ecosystem scales – especially important given Web3 developers currently represent only 0.1% of global JavaScript talent.
IOTA is well-positioned to tap into the expanding Move ecosystem – driving developer adoption, accelerating dApp creation, and fueling a positive flywheel of ecosystem growth, innovation and real-world utility.
Challenges Ahead
Despite a promising outlook, IOTA faces notable challenges:
- Attracting users from other chains will require strong incentives or distinctive dApps.
- Competing against established Move L1s like Sui and Aptos, as well as performant L1s like Solana, remains difficult.
- Overcoming legacy perceptions of IOTA as an “IoT coin” or “dino coin” may hinder brand repositioning.
A New Start: Moving into a New Era
Nevertheless, IOTA’s shift signals a new chapter. With L1 programmability, robust incentives, active foundation support and a strategic focus on MoveVM, IOTA is well positioned to capture a meaningful share of future Web3 growth.
Its partnerships and regulatory milestones further establish IOTA as a bridge between blockchain and real-world adoption – a vision increasingly sought by today’s market.
While the transition is a calculated risk, it is strategically sound. As the market moves beyond speculation toward real utility, IOTA’s nearly fully unlocked supply and focus on practical applications makes it a compelling ecosystem to explore – especially within the expanding Move ecosystem.
Authors: @zkayAPE, Memento Research
This report was written in partnership with IOTA. This report has been prepared for informational purposes only. It does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and you should not treat any of the report’s content as such.