IOTA, the layer-1 blockchain network, is gearing up to implement a significant upgrade known as the Rebased Protocol on May 5, 2025. This upgrade marks a historic shift as the network transitions from the Stardust framework to the innovative IOTA network.
The development team asserts that the upcoming Rebased Protocol will represent the blockchain's "largest, most intricate, and most crucial upgrade to date." Several key features of the protocol are highlighted, promising immediate benefits upon launch.
Among the notable enhancements is the Mysticeti consensus protocol, which aims to achieve exceptional scalability and rapid transaction speeds, facilitating a throughput of over 50,000 transactions per second and finality times under 500 milliseconds.
Another pivotal change is the integration of smart contracts based on the Move programming language directly into the layer-1 network. This advancement will empower developers to create sophisticated, scalable, and secure decentralized applications (dApps). The IOTA network will be the third to implement the Move Virtual Machine (MoveVM), following similar offerings from Sui and Aptos.
Additionally, the Rebased upgrade will introduce minimal transaction fees through an adaptive fee-burning mechanism. The new IOTA Gas Station feature will enable developers and businesses to cover transaction fees for their users, allowing them to conduct transactions without needing IOTA tokens.
Furthermore, the network will evolve into a fully decentralized delegated Proof-of-Stake (DPoS) system, starting with 50 permissionless validator slots and expanding to over 150 slots over time. The initial validators for the IOTA Rebased Genesis include a range of organizations such as the IOTA Foundation, IOTA Ecosystem DLT Foundation, and several others.
This upgrade follows a comprehensive process of governance voting, technical testing, and audits. During a governance vote in December, the IOTA community expressed strong support for the Rebased protocol upgrade proposal, confirming the shift from layer-1 to a Move-based object ledger.
The migration to the new IOTA Rebased protocol is heralded as a significant milestone in the project’s journey, positioning it for increased adoption and new applications. The upgrade aims to attract institutional investors and even entire countries to its tokenization platforms, trade digitization services, trade finance, and digital identity solutions.
IOTA also plans to enhance its Web3 ecosystem with advanced applications, including DeFi protocols, on-chain order book exchanges, supply chain solutions, and stablecoins.
As for market performance, IOTA currently trades at $0.1727, having increased by 1% in the last day and 6% over the week. However, it has seen a decline of 6% over the past month and a significant 29% decrease year-on-year. The cryptocurrency's all-time high stood at $5.25 in December 2017, reflecting a staggering drop of 96.7% since then.
