- The IOTA Rebased proposal introduces a transition from the UTXO model to an object-based architecture for improved programmability, resource management, and throughput exceeding 50,000 TPS
- It also incorporates a deflationary tokenomics model, nominal transaction fees, and validator incentives to enhance network resilience and scalability.
IOTA Foundation has recently developed a revolutionary proposal to rebuild its blockchain framework, referred to as the IOTA Rebased protocol. This endeavor seeks to establish a completely decentralized Layer 1 (L1) network with the addition of advanced features. These new features include Move Virtual Machine (MoveVM), Ethereum Virtual Machine (EVM) support, and a revised tokenomics model.
IOTA’s Rebased Proposal Highlights
This proposal revolves around the transition from the current UTXO model to an object-based architecture powered by MoveVM. The change would improve programmability and enable resource-oriented programming, static verification, and formal contract validation. The improved programmability is expected to allow applications beyond the current protocol’s limitations, from financial services to supply chain systems.
Another aspect of MoveVM is that it introduces strong data abstraction capabilities, which simplify complex tasks in resource management. Moreover, the IOTA Rebased proposal also aims to bring higher throughput, projected above 50,000 TPS on the network, per the CNF report.
Further, the initiative would consist of restructuring the consensus model to ensure the network performs well under worst-case conditions. This would aid in improving latency and resilience. Additionally, the proposed tokenomics model introduces staking rewards and transaction fees, deviating from IOTA’s feeless structure.
Meanwhile, for reward incentives, validators and delegators will receive payments in newly created tokens, with a per-epoch minting rate equivalent to around 767,000 IOTAs, thereby providing a 6% yearly supply increase through this inflationary process. This will naturally decline towards lower levels as time passes. The staking amount is a minimum of 2 million IOTAs; however, it will allow delegated stakes.
While the initial cap of 150 validator seats is established, parameters are left open for future governance adjustments. Transactions would have nominal fees, with an average-sized transaction costing approximately 0.005 IOTAs. These fees will be burned to create a deflationary effect on the token supply.
Other Key Features
In addition, a small refundable deposit will be essential for storage, aligning with the Stardust protocol’s approach to storage management. Another key feature of IOTA Rebased is the direct integration of EVM into the L1 layer. This integration seeks to make sure that dApps already built on IOTA’s EVM Layer 2 network remain relevant and improve their security and decentralization, reported CNF.
Moving EVM operations to the L1 layer will boost network activity, leading to an increase in burned tokens and further contributing to deflationary tokenomics. IOTA has already released a public testnet to test these proposed changes in the real world.
Further refinement will come from community feedback and internal testing. IOTA is also working on a suite of new tools, including a browser-based wallet extension, an updated Ledger app, and a rebuilt explorer. All of these tools will be capable of supporting the proposed protocol’s functionalities and smoothing the transition from the existing Stardust protocol.
The proposal, pending a governance vote, outlines plans for a potential mainnet launch in early 2025, subject to rigorous testing, feedback, and audits.
