After a period of relative silence, the IOTA blockchain project (MIOTA) has recently announced an update to its tokenomics and unveiled an ambitious new development roadmap. Specifically, IOTA is planning to transition to a new phase known as IOTA 2.0. In this phase, the project will introduce several improvements, including support for smart contracts on the blockchain, the introduction of a new ecosystem fund, the development of layer2 and DeFi solutions, and an enhanced utility for the MIOTA token.
The upcoming upgrade to IOTA 2.0 will be called the Stardust hard fork and is expected to be implemented in the fourth quarter of 2023. With the introduction of layer2 and DeFi functionalities to the blockchain, the community and developers are hopeful that these changes will enhance the utility of MIOTA. This is because as the demand for IOTA usage increases, the network will record a large volume of new transactions, requiring validators to participate in processing them. These validators need to hold MIOTA.
Notably, the IOTA 2.0 ecosystem will establish a seed fund funded by the issuance of MIOTA tokens. To implement this new fund for DeFi applications, IOTA plans to increase the total supply of MIOTA from its current maximum of 2.7 billion tokens to 4.6 billion, a 70% increase. The additional 1.9 billion MIOTA tokens created after the Stardust hard fork will be unlocked at regular intervals every two weeks, extending over a period of four years, with an annual inflation rate of 12%. Some of these new tokens will be allocated as airdrops to network supporters and staking participants.
The project recognizes the need for these changes to stay competitive in the market and to avoid losing market share and market capitalization. The aim is for IOTA to have the opportunity to succeed in the current market landscape.
IOTA is known for its unique blockchain structure that does not rely on miners, blocks, or chains. It serves the Internet of Things (IoT) network based on a distributed ledger.
During the 2017-2018 period, IOTA was one of the prominent blockchain projects in the market. However, it has since faced stagnation and lost its initial position.
At the time of writing, MIOTA is trading around $0.16, down more than 97% from its peak of $5.69 in December 2017. The current market capitalization of IOTA stands at $446 million, ranking 69th globally.