- IOTA is set to launch its major Rebased protocol upgrade on May 5, introducing full decentralization, staking rewards, and Layer 1 smart contract support with MoveVM.
- The upgrade aims to enhance scalability, security, and usability, positioning IOTA for broader adoption in institutional and real-world applications.
IOTA is gearing up for a historic transformation as it prepares to implement its most significant mainnet upgrade yet — the Rebased protocol — on May 5. This move will redefine the project’s foundation by introducing full decentralization, high scalability, Layer 1 smart contract capabilities, and, for the first time, staking rewards for $IOTA holders.
From Centralization to Community-Driven Consensus
With the shift to the Rebased protocol, IOTA is replacing its old architecture with a Delegated Proof-of-Stake (DPoS) model. The upgrade will launch with 50 permissionless validator slots, with plans to scale up to 150 validators, marking a major step toward a truly decentralized network. This model ensures that the community, rather than a central coordinator, will now govern the consensus process.
The move was greenlit by a community vote and followed a full audit, emphasizing transparency and long-term stability. Initial validators include notable entities such as IOTA Foundation, Luganodes, Stakin, and Nansen.
Smart Contracts and Scalability Unleashed
The upgrade introduces MoveVM, a smart contract framework that makes IOTA the third blockchain after Aptos and Sui to support MoveVM at Layer 1. This enables developers to build advanced decentralized applications (dApps) directly on the mainnet without needing external layers.
Alongside MoveVM, the IOTA EVM will be reactivated, allowing dual smart contract environments to operate simultaneously. This opens the door to scalable, secure, and diverse DeFi applications, particularly attractive for developers seeking flexibility.
The upgrade boosts scalability, enabling over 50,000 transactions per second—placing IOTA among the fastest blockchains.
Staking Rewards and User-Centric Features
For the first time, $IOTA holders can earn annual yields between 10% and 15% by staking their tokens. Additionally, the new protocol introduces a fee-burning mechanism and adaptive transaction fees, making IOTA more efficient and deflationary.
To lower entry barriers for users, the IOTA Gas Station will allow developers to cover transaction fees on behalf of users, fostering greater adoption and smoother user experiences.
This transformative upgrade positions IOTA for institutional and governmental use cases, including digital identity, supply chain management, and on-chain finance. IOTA’s Rebased protocol signals a new chapter in decentralized, high-speed blockchain development.