IOTA is preparing to make an ambitious leap forward. Its Rebased protocol upgrade is scheduled to fully deploy in 2025! This isn't just another incremental improvement; it's a complete overhaul designed to catapult IOTA into the top tier of Layer 1 blockchains. According to Adeel Zaman, an adaptable blockchain reporter blending progressive thinking with pragmatic analysis, IOTA Rebased promises to enhance the network's onboarding, user experience, and utility, making it more appealing to both developers and users. This upgrade is symbolic of a bigger shift for IOTA. It essentially moves from the legacy, centralized, and costly validation process into an entirely decentralized and highly performant blockchain-based platform.

Decentralization and Democratized Validation

A major pillar of the IOTA Rebased upgrade is moving to a Delegated Proof-of-Stake (DPoS) consensus mechanism. This is a historic great for IOTA 🙌. I believe this is where, for the first time ever, we are creating a real, distributed, consensus layer. The transition to DPoS is more than just a pursuit of greater decentralization. It is an attempt to democratize on-chain transaction validation.

Staking Rewards and Validator-Based Governance

Through DPoS, IOTA holders are given a major incentive to take an active role in the security and governance of the network. By participating in Proof of Stake through staking their IOTA tokens, users earn rewards – estimated to be in the range of 10%-15% APY. These rewards are funded through a combination of inflation and a new fee-burning mechanism, incentivizing long-term participation and alignment with the network's success. The DPoS model adds an additional layer of governance in the form of a validator-based governance structure. The new model does away with the old coordinator model. It will launch with 150 permissionless validators, beginning with an initial deployment of 50 validators. By creating a parallel structure for decision making, this creates the opportunity for greater participation and a more resilient, secure network.

Performance and Scalability

Decentralization isn’t the only goal with IOTA Rebased, as we look to largely improve performance across the entire network. The upgrade increases the throughput of the system to more than 50,000 transactions per second (TPS). This extraordinary leap in innovation, IOTA is creating new benchmarks with scalability. This increased throughput, along with sub-second finality, positions IOTA as a serious competitor among high-speed Layer 1 chains.

Mysticeti Consensus Protocol

In order to get such outstanding performance, IOTA uses Mysticeti consensus protocol. Mysticeti has been designed for extreme scalability and low-latency. It handles transactions faster and more securely than any other existing blockchain or payments method, with finality in less than one second. This kind of speed is important to fostering the next wave of applications, from DeFi to gaming. When you pair DPoS with Mysticeti, it provides a powerful engine for IOTA’s future scalability.

DeFi Opportunities and Smart Contracts

This DPoS model opens up new, scalable, innovative opportunities for DeFi developers and users to flow into the IOTA ecosystem. Smart contracts, driven by MoveVM, a virtual machine based on the Move language that originated at Facebook’s Diem project, will revolutionize IOTA. This move further cements IOTA as a blossoming center for innovation within the decentralized finance space.

Native Smart Contracts with MoveVM

Move is a type-safe, resource-oriented programming language designed for security. It’s somewhat complex to work with, but it makes good sense for building strong, trustless, and reliable decentralized applications (dApps). This innovation gives developers the freedom to create complex DeFi protocols and NFT marketplaces. They can develop game ecosystems and tokenized asset economies on IOTA with more certainty.

Cost-Effective Solutions for Developers and Users

IOTA's upgrade features minimal commissions and a fee-burning mechanism, making it an attractive platform for DeFi developers and users seeking cost-effective solutions. Coupled with the high-performance capabilities unlocked by Mysticeti consensus protocol, IOTA creates a powerful infrastructure for DeFi applications.

Migration Roadmap and Actionable Steps

Moving from IOTA Reborad to IOTA Rebased is a multi-step migration procedure. Here's a breakdown of the key steps and timelines:

  1. Migration from Legacy network to Stardust network: Token holders can now migrate their tokens from the Legacy network to the Stardust network.
  2. Migration from Stardust network to new IOTA network: The migration from the Stardust network to the new IOTA network will officially begin on 05.05.2025, 9am CEST.

To prepare for the migration, token holders should take the following steps:

  1. Download the IOTA Legacy Migration Tool (available on Windows, Mac, or Linux).
  2. Enter your 81-character seed into the tool to generate a new mnemonic and provide a Stronghold file.
  3. Create a password for your Stronghold backup file to protect your funds and restore from backup.
  4. Export your Stronghold file and migration log for a comprehensive record of your migration journey.

To assist users throughout the migration process, IOTA provides a range of tools and resources:

  1. Load your existing seed into the IOTA Legacy Migration Tool.
  2. Generate a Stardust address and confirm your seed balance.
  3. Migrate your tokens to the Stardust network.
  4. Prepare for the migration to the new IOTA network by ensuring compatibility with the Rebased mainnet upgrade.

Tools and Resources

IOTA’s Rebased protocol upgrade is the largest move in a long time in the direction of a extra decentralized, scalable and developer-friendly ecosystem. Find out how IOTA is creating a positive impact and becoming the back bone for the future of Web3. It uses the creative DPoS, Mysticeti consensus protocol, and MoveVM to propel itself mode global powerhouse.

  • IOTA Legacy Migration Tool.
  • IOTA Wallet Dashboard web app (available shortly before launch).
  • Nightly Wallet (third-party wallet available as a web dApp and mobile app).
  • Official IOTA Explorer on explorer.rebased.iota.org.

IOTA's Rebased protocol upgrade represents a bold step towards a more decentralized, scalable, and developer-friendly ecosystem. With its innovative use of DPoS, the Mysticeti consensus protocol, and MoveVM, IOTA is positioning itself as a major player in the future of Web3.