Q2 2025 Progress Report

Q2 2025 was a landmark chapter for IOTA, with the launch of the Rebased Mainnet, transforming it into a high-performance Layer 1 blockchain, and the debut of the TWIN Foundation, advancing IOTA’s role in global digital trade. Key progress included research into account abstraction and passkeys, adoption of IOTA Identity and Gas Station tools, real-world ecosystem integrations, major community campaigns, and strong global policy engagement.

Research & Development

The primary focus this quarter was the successful launch of the IOTA Rebased Mainnet. This launch represents the culmination of more than a year of collaborative work across all R&D teams to transform IOTA into a high-performance blockchain on par with other major Layer 1 networks.

While IOTA Rebased consumed significant Q2 resources, our teams also pursued additional innovations to enhance the platform.

We are researching account abstraction to enhance user experience by replacing simple externally owned accounts with programmable on-chain accounts. This advancement will enable sophisticated applications, such as multi-signature wallets comparable to Gnosis Safe. Account abstraction will also improve security through features like social recovery and provide better fund management solutions for teams. This effort remains in the research phase as we evaluate implementation approaches, with a solution design targeted for early Q3.

Regarding user experience improvements, we are investigating passkey integration as an additional authentication method. Passkeys would enable streamlined wallet onboarding flows and, when synchronized with cloud services, provide enhanced account recoverability. We are currently in the proof-of-concept stage and aim to integrate this technology in Q3.

Throughout the quarter, the team continuously integrated upstream changes to maintain codebase currency and incorporate Sui fixes. Notably, we merged enhancements to the Mysticeti consensus mechanism and added our own improvements, resulting in increased network stability. We are also addressing synchronization component instabilities. Additionally, we continue developing Starfish, our evolution of Mysticeti, which was presented at events including Protocol Berg v2. Starfish is in active development, with a Devnet deployment anticipated in Q3.

We delivered several protocol improvements in Q2, including an enhanced sequencing algorithm that reduces latency and increases throughput by intelligently ordering transaction execution. Future improvements under consideration include validator scoring for automatic adaptation of reward distribution, a feedback mechanism for canceled transactions during congestion and a gas fee predictor to improve the protocol usability. The team has also proposed “Move view functions” to simplify on-chain state queries. We encourage community review and discussion of this proposal.

Product Adoption

In Q2, the Product Adoption team transitioned from foundational program setup to concrete, real-world traction across both ecosystem partnerships and core infrastructure.

The Business Innovation Program marked a key milestone by onboarding itsfirst three participants: ObjectID, Orobo, and Impierce Technologies. These teams are building towards live solutions on the IOTA Mainnet, addressing critical domains like digital identity, product traceability, and compliance infrastructure. ObjectID (LinkedIn article) was the first to go live, enabling verifiable product identities through a combination of IOTA technologies

On the product side, IOTA Gas Station, which ensures a seamless user experience by sponsoring transaction fees in the background, saw the release of version 0.2, an upgrade that transformed static fee sponsorship into a highly flexible policy layer. With this release, application teams can define fine-grained rules such as usage quotas per address over customizable time windows, enforce package-level restrictions, and filter sponsored transactions based on the number of executable commands. Also, developers can now author complex access rules using the Rego policy language and integrate off-chain logic via external HTTP hooks, enabling real-time sponsorship decisions based on any contextual signal, such as account age or campaign eligibility. These policies can be updated on the fly through a live reload mechanism, eliminating the need for downtime during configuration changes and making the Gas Station suitable for public dApps, infrastructure services, and scaled onboarding campaigns.

IOTA Identity also saw advances, with the release of version 1.6 beta bringing compatibility with IOTA Mainnet. The new release introduced platform-agnostic transaction abstraction and integration-ready WASM builds for embedding Identity logic directly into decentralized applications. With ongoing work to integrate Gas Station support into IOTA Identity, developers are able to issue and manage decentralized identifiers without exposing users to blockchain complexity or transaction fees.

To streamline access and onboarding, dedicated product pages for IOTA Identityand IOTA Gas Station were launched iota.org. These hubs now serve as centralized entry points for documentation, use cases, and integration resources, supporting the growing community of builders around IOTA’s public infrastructure.

These developments reflect steady progress in bringing IOTA’s infrastructure into real-world use. With partner applications beginning to launch and key tools maturing, the focus remains on supporting builders and iterating based on practical integration needs. Additional partner deployments and product improvements are expected in the coming quarter as adoption efforts continue.

TWIN and TLIP

Q2 2025 marked a major milestone for theTWINinitiativeand its partners with theofficial launch of the TWIN Foundation on May 8th in Lusaka. The foundation formalizes the shared mission of the six founding organizations – TradeMark Africa, the IOTA Foundation, the World Economic Forum, the Tony Blair Institute for Global Change, theChartered Institute of Export & International Trade, and Global Alliance for Trade Facilitation – to provide the leadership and governance needed to position TWIN as a lasting global public good for digital trade. Tony Blair has spoken on why his institute is supporting this important step forward:

Two other events in Q2 reinforced the growing momentum behind TWIN and TLIP:

• At the TradeTech Forum hosted by the UAE Ministry of Economy, the Abu Dhabi Department of Economic Development, and the World Economic Forumin Abu Dhabi on April 8th, TWIN was featured in a dedicated session. Among the speakers, Dr. Lilian Nyawanda, Commissioner of Customs and Border Control at the Kenya Revenue Authority, spotlighted howTLIP, TWIN’s application in East African trade, has reduced document availability times from weeks to minutes in Kenyan export processes to the UK – an important proof point of how IOTA’s technology can cut friction in cross-border trade.
• The IOTA East Africa Web3 Innovation Summit, held in Nairobi on May 30th and co-hosted with TradeMark Africa, was another standout moment this quarter. The event brought together developers, policymakers, and industry leaders to explore real-world applications of IOTA’s technology in the East African context. Along with workshops on IOTA Move, TWIN was showcased, and a panel discussion on TLIP convened experts from across the Kenyan trade ecosystem to discuss TLIP’s impact on trade in the region.

Ecosystem Department

In Q2 2025, the Ecosystem team focused on expanding awareness, strengthening infrastructure, and growing community participation around the newly launched IOTA Rebased Mainnet through strategic events, integrations, and campaigns.

Events & Community Engagement

The Ecosystem team spearheaded several events to engage developers, partners, and new audiences. The Moveathon drew 427 participants, with 12 teams reaching the finals and seven recognized as winners for their innovative projects built using MoveVM.

APAC Moveathon final day in Singapore / Photos: Angelhack

At Token2049 Dubai, IOTA co-sponsored the Binance Clubhouseand hosted a booth to deepen relationships and introduce the capabilities of the rebased mainnet to new stakeholders. The team also organized a private MSV brunch side event, bringing together approximately 150 close partners and prospective collaborators in a more informal setting to foster strategic dialogue.

During Malaysia Blockchain Week, the team collaborated with local universities on an educational roadshow, presenting IOTA’s technology at leading tech institutions to inspire and support the next generation of Web3 builders. Be sure to check out the upcoming related hackathon!

Infrastructure and DeFi Initiatives

To support the launch of IOTA Rebased, the Ecosystem team sourced and onboarded over 40 validators, contributing to the security and decentralization of the new mainnet. On the DeFi front, the team supported the launch of the Swirl liquid staking protocol and helped integrate several essential infrastructure tools, including MSafe multisig, Zodia Custody, IOTAlink, and the IOTA Scan block explorer.

Wallet support expanded significantly, with Nightly and Cosmostation introducing both browser and mobile wallets for IOTA. The team also facilitated integrations with data and developer tools such as Pyth Oracles, Goldski pipelines, Blockberry API suite, and Lukka’s compliance and AML solutions.

A key milestone was the agreement with Echo Protocol to bring Bitcoin bridging to the IOTA network, broadening cross-chain interoperability and unlocking new possibilities for decentralized applications.

Campaigns and Growth

The Ecosystem team launched three major campaigns to drive user engagement and ecosystem growth.

• The CoinGecko Learn 2 Earn (L2E) campaign drew over 13,000 participants, rewarding 2,000 of them with $10 in IOTA.
• The multi-phase Return of IOTA campaign activated more than 16,000 users through a series of on-chain quests across both the mainnet and EVM chain, resulting in tens of thousands of transactions.
• The Bithumb L2E campaign, in partnership with one of Korea’s largest exchanges, introduced IOTA to a new wave of users in a high-potential market.

In terms of the Ambassador program, this quarter focused on creative and educational community engagement across the IOTA ecosystem:

• Ambassador Meme Challenge: Drove social engagement with a low-barrier, creative format in collaboration with FomoFox and IOTATO.
• Virtue Testnet Bounty: Incentivized DeFi exploration through minting VUSD and yield-maximization tasks.
• Swirl Platform Breakdown: Encouraged thought leadership around staking and future protocol developments.

These campaigns supported education, boosted visibility, and expanded content creation within the IOTA community. Join the ambassador ranks on our Discord server to become a part!

Legal & Regulatory Affairs

In Q2, the Legal & Regulatory Affairs team continued its global policy engagement, responding to several consultations worldwide. This included key submissions to:

• The UK Treasury’s proposed regulatory framework for cryptoassetsand the Financial Conduct Authority’s extensive discussion paper on the regulation of cryptoasset activities.
• The European Data Protection Board’s guidelines on processing personal data through blockchains.
• The Securities Commission of Malaysia’s consultation on tokenized capital market products based on DLT.
• Japan’s Financial Services Agency discussion paper on the examination of the regulatory framework for cryptocurrencies.
• The Financial Stability Board’s thematic peer review on the global regulatory framework for crypto-asset activities.

The team also expanded our collaboration with industry associations by joining CryptoUK, the leading UK crypto industry association. Joining CryptoUK will allow the IOTA Foundation to share expertise, contribute real-world insights like TWIN, and build strong ties within the growing UK crypto ecosystem.

Following the launch of the TWIN Foundation, the IOTA Foundation and the Tony Blair Institute for Global Change entered a new phase of collaboration by signing an MoU on collaboration around trusted digital public infrastructure.

The Legal & Regulatory Affairs team also continued its active collaboration with the Global Blockchain Business Council (GBBC) in the UK, the EU and the US. A highlight of the partnership with GBBC was the inclusion of IOTA and TWIN in their 101 Real-World Blockchain Use Cases Handbook, showcasing tangible applications of IOTA technology in international trade. The team also participated in the DC Blockchain Summit 2025in Washington, contributing to important discussions on the future of digital assets and blockchain policy in the US market.

Communications and Social Media

This quarter, we released 16 blogposts, both supporting IOTA rebased as well as the launch of the TWIN Foundation. On social media, this translated to nearly 1000 posts (over double the previous quarter), garnering 5.8 million impressions organically and 42 million impressions via advertising from TEA.

This also resulted in engagements doubling compared to the previous quarter, with a high rate of 2.45%, which according to our knowledge is way above the industry standard. Followers substantially grew over the period by 3%, translating to 9000 new followers across all platforms.

Outlook

With a solid technical foundation and growing global partnerships, IOTA is poised to accelerate adoption in the second half of 2025. Key innovations like account abstraction and enhanced user onboarding are in development, while products such as IOTA Identity and Gas Station continue to mature. The launch of the TWIN Foundation, signing a MoU with the Tony Blair Institute for Global Change and TLIP’s tangible success in East Africa showcase IOTA’s practical value in supply chain transformation.

Looking ahead, IOTA will expand its product ecosystem with a strong focus on real-world use cases in trade and logistics, building on TWIN as both a flagship deployment and catalyst for broader adoption.