IOTA’s Layer 1 Upgrade Promises 50K+ TPS and Full Decentralization

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As a seasoned crypto investor who has witnessed the rise and fall of numerous digital assets over the years, I must admit that the recent announcement from IOTA about its transformative upgrade, “IOTA Rebased,” has piqued my interest more than any other project in quite some time. Having closely followed the IOTA Foundation’s journey since their inception in 2015, it’s fascinating to see how they have consistently aimed to address and eliminate traditional blockchain inefficiencies. The potential for IOTA Rebased is enormous, especially considering its focus on scalability, decentralization, and programmability.

On November 18, 2024, the distributed ledger known as IOTA unveiled an extensive report detailing its transformative update using its Layer 1 (L1) protocol, titled “IOTA Rebased”. This upgrade aims to boost the network’s scalability, decentralization, and programming capabilities. A decision on whether the network will implement this new protocol or stick with IOTA 2.0 will be made through a community vote in the near future.

Today, we reveal the monumental update known as IOTA Rebased 🚀🌀, a transformative step that propels us further in our quest to bridge the real world with Web3:

— IOTA (@iota) November 18, 2024

From its establishment in 2015, the IOTA Foundation has been dedicated to overcoming the inefficiencies inherent in conventional blockchain systems, like high energy consumption, miners, and transaction charges. Unlike traditional platforms, IOTA provides scalability and decentralization without relying on proof-of-work or miners. Over the years, IOTA has forged robust alliances with various government entities, businesses, and research institutions.

The IOTA Rebased update is designed to address the expanding industry demand for built-in programmability within its fundamental protocol. This evolution surpasses the IOTA 2.0 upgrade, which successfully achieved full decentralization in 2023. However, the lack of native smart contracts on the Layer 1 network has restricted IOTA’s capabilities, making the Rebased update an essential next phase in its development.

Decentralization Meets 50K+ TPS Efficiency

Iota’s Rebased version offers impressive scalability, enabling it to process over 50,000 transactions per second (TPS). This significant increase in performance opens up possibilities for high-demand applications that were previously out of reach. Achieving this feat is made possible by Iota’s adoption of the Mysticeti consensus protocol, a system designed for high scalability and fast response times, ensuring that results are finalized within seconds.

Enhancing the functionality of smart contracts that rely on movement within the main network significantly boosts programmability, fostering the growth of decentralized applications (dApps). This advancement paves the way for applications in areas like tokenized trade finance, increased use of stablecoins, and the expansion of decentralized finance (DeFi). Directly linking with real-world industries is expected to lead to an increase in IOTA’s practicality and market acceptance.

Iota Rebased emphasizes scalability, decentralization, and financial stability. It aims to process over 50,000 transactions per second and introduces advancements that enhance security, productivity, and user comfort. The Delegated Proof of Stake (DPoS) system maintains decentralization by providing up to 150 permissionless validator slots, thereby establishing a secure and scalable ecosystem.

New tokenomics will promote sustainability through an adaptive fee-burning mechanism that adjusts transaction fees based on network conditions. Additionally, staking rewards, with an initial inflation rate of 6-7% annually, offer validators and stakers up to 15% annual percentage yield (APY), strengthening the network’s security.

Can IOTA Become a Key Player in DeFi?

Iota Rebased strives to speed up network expansion by shortening the launch period for new features. By incorporating native Layer 1 smart contracts, developers and businesses can construct intricate applications on Iota, making it more attractive as a flexible, distributed blockchain platform that is easy to scale.

Prioritizing the integration of IOTA with enterprise software and making it easier for businesses to adopt new technologies continues to be a key focus. For example, IOTA is digitizing trade and supply chain operations in Kenya, aiming to tokenize both physical and financial assets to establish a comprehensive trade finance system built on the IOTA blockchain.

By introducing stablecoins and decentralized trading platforms, IOTA is becoming an important figure in the Decentralized Finance (DeFi) sector. If the community vote goes in favor of IOTA Rebased, there could be a new mainnet launch after testing on a test network, security checks, audits, and integration with cryptocurrency exchanges.

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2024-11-18 21:27