IOTA Rebased: Bridging the Path to Decentralization

Introduction

Over the last decade, IOTA established itself with a revolutionary vision: a scalable, decentralized, feeless Distributed Ledger Technology (DLT) built specifically for the Internet of Things (IoT). Its innovative Directed Acyclic Graph (DAG) architecture, known as the Tangle, aimed to overcome the limitations of traditional blockchain designs by eliminating miners and transaction fees. However, as adoption expanded and practical challenges emerged, the IOTA Foundation recognized the need for strategic evolution. With the Rebased project, IOTA is transitioning to a new network, which will be a Move-based blockchain. This is not an abandonment of its roots but rather a calculated step to preserve and enhance the original vision.

Why Rebase? Necessity while Preserving Core Values

Initially, the Tangle provided feeless transactions, leveraging a unique system where each transaction validated two prior ones. This theoretically enabled infinite scalability and decentralization. However, real-world usage revealed significant challenges: congestion during high activity periods, limited incentive structures for maintaining infrastructure, and complexities hindering developer adoption.

IOTA Rebased introduces a new blockchain protocol based on the Move Virtual Machine (MoveVM), an advanced execution environment renowned for security and efficiency. This transition strategically preserves the essence of IOTA’s vision while practically addressing scalability, security, and economic viability. The new Move-based infrastructure significantly improves on IOTA's foundational goals, positioning the platform for widespread adoption.

Real-World Impact at the Core

IOTA’s vision has always centered around tangible, real-world adoption. While the Internet of Things played a foundational role in shaping this direction, IOTA’s evolution—especially with the Move-based Mainnet—broadens its impact across diverse sectors.

From trade and supply chains to digital identity, circular economy, and real-world asset tokenization, IOTA empowers industries with secure, efficient, and transparent infrastructure. The object-oriented design of Move enhances resource tracking, state management, and smart contract execution—making it an ideal backbone for scalable, real-world solutions.

Whether it's enabling decentralized finance with built-in compliance, powering global digital trust layers, or driving sustainable innovation, IOTA remains focused on bridging traditional systems with the decentralized technologies of the future.

The Object Ledger Advantage

Traditional blockchains, like Ethereum, rely on account-based ledgers. In contrast, the new IOTA network employs an object-based ledger, fundamentally designed around individual, stateful resources. This architecture significantly improves asset management, resource control, and simplifies state transitions, greatly benefiting supply chains, digital passports, and asset tokenization.

DPoS

To achieve genuine decentralization, IOTA transitioned to a Delegated Proof of Stake (DPoS) consensus mechanism based on Mysticeti. DPoS allows token holders to delegate tokens to trusted validators who secure the network.

Validators, such as Luganodes, play a critical role in network security, decentralization, and performance. Mysticeti involves up to 150 active validators, ensuring robust decentralization. Token holders benefit by earning staking rewards (up to 10% annually), incentivizing active network participation.

Keeping Feelessness Alive: Sponsored Transactions

IOTA’s hallmark was feeless transactions. With IOTA Rebased, minimal fees ensure sustainability. However, sponsored transactions via the IOTA Gas Station allow developers and businesses to cover gas fees for end-users. Users interact without buying or managing IOTA tokens, enhancing accessibility. Features like access control, transaction limits, and usage metrics facilitate secure and efficient sponsorship management, maintaining the user-friendly experience IOTA is known for.

True Parallelization and High Scalability

Unlike traditional blockchains, IOTA’s DAG-based ledger processes transactions in parallel. Mysticeti consensus supports parallel block proposals, harnessing full network bandwidth, achieving upwards of 50,000 transactions per second with subsecond finality. Validators handle transactions simultaneously, significantly reducing latency and maximizing CPU efficiency.

Multi-VM and EVM Compatibility

The new IOTA network supports multiple virtual machines (VMs), including MoveVM and the Ethereum Virtual Machine (EVM). This multi-VM strategy attracts diverse developer communities, enabling seamless integration of existing Ethereum-based dApps. Future plans include deeper EVM integration at Layer 1, enhancing security, decentralization, and network activity, thus contributing positively to tokenomics.

Real-World Adoption: TLIP

The Trade Logistics Information Pipeline (TLIP) showcases practical, real-world utility, leveraging IOTA’s Move-based programmability. TLIP digitizes trade logistics, enabling asset tokenization and global trade financing. Recent developments include partnerships with Africa Customs & Trade, World Customs Organization, Kenya Ports Authority, and other key entities, strengthening IOTA’s role in digitalizing Africa's trade infrastructure.

New Features: Decentralization and More

The new network achieves decentralization through its Mysticeti-based DPoS consensus, surpassing previous Coordicide strategies. Improved transaction throughput, robust security, and decentralization pave the way for enterprise adoption, sophisticated DeFi applications, and extensive real-world integrations.

Economic Innovation: LST and Stablecoins

Introducing Liquid Staking Tokens (LSTs) and stablecoin minting elevates IOTA’s economic model. LSTs enable simultaneous network staking and DeFi usage, enhancing token utility and network security. Native stablecoin support allows regulatory compliance, increasing institutional attractiveness.

Conclusion: Better Than Ever, True to Its Roots

IOTA Rebased is a strategic evolution, enhancing scalability, decentralization, usability, and economic sustainability. Innovations such as sponsored transactions, parallelized DAG scalability, object-oriented ledger structure, multi-VM support, and decentralized governance position IOTA as a leading platform for enterprise-grade blockchain applications.

Through TLIP, LSTs, stablecoins, and advanced tokenomics, IOTA faithfully preserves and expands its visionary mission, emerging stronger and more sustainable, truly honoring its foundational goals.

About Luganodes

Luganodes is a world-class, Swiss-operated, non-custodial blockchain infrastructure provider that has rapidly gained recognition in the industry for offering institutional-grade services. It was born out of the Lugano Plan B Program, an initiative driven by Tether and the City of Lugano. Luganodes maintains an exceptional 99.9% uptime with round-the-clock monitoring by SRE experts. With support for 45+ PoS networks, it ranks among the top validators on Polygon, Polkadot, Sui, and Tron. Luganodes prioritizes security and compliance, holding the distinction of being one of the first staking providers to adhere to all SOC 2 Type II, GDPR, and ISO 27001 standards as well as offering Chainproof insurance to institutional clients.

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