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IOTA developers plan to release a new ecosystem fund and a new blockchain that will support decentralized applications.
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These changes should increase the value of MIOTA tokens and improve network security.
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IOTA was one of the most hyped and popular blockchains during the 2017 bull run, and developers plan to take it back to the top.
A formerly major crypto project is taking another look at the big leagues with a series of decisions that will benefit network development and token prices – years after disappearing from popular circles.
IOTA, one of the most hyped and fastest growing tokens in the 2017 bull market, has been losing market share to newer blockchains in recent years. However, Dominik Schiener, co-founder of IOTA, told CoinDesk that the network plans to release an IOTA 2.0 network and increase the usability of its MIOTA tokens in the coming months.
Key upcoming improvements include the introduction of an upgraded network, which will introduce smart contracts, a focus on layer 2 blockchains and decentralized finance (DeFi) applications, the introduction of a new ecosystem fund, and an increase in the utility of iota tokens.
The new IOTA ecosystem fund will be supported by the established release of new MIOTA tokens. The Stardust hard fork is scheduled for release on October 4 and will lay the technical foundation for IOTA 2.0, which is expected to go live in the fourth quarter of this year.
A hard fork is a change to a blockchain protocol that invalidates older versions.
The IOTA smart contracts will be introduced via a general-purpose virtual machine (VM), or a piece of software that runs smart contracts. Applications built on IOTA via later smart contracts will generate significantly more demand for Mana, a reputation system for nodes within the IOTA network, which in turn will increase the demand for MIOTA.
“This self-sustaining economic system is critical to increasing the security of the IOTA network and in turn generating more demand for applications and layer 2 networks to build on IOTA,” an IOTA representative told CoinDesk .
At Mana, reputation would be acquired by contributing to the network, for example by providing value in the form of development. Developers say that increasing the monetary value of the MIOTA also directly increases the security of the entire network, which in turn creates more demand for block space – creating a financial flywheel.
Ecosystem fund to start projects
Schiener told CoinDesk that an ecosystem fund will be set up to incentivize developers and teams building on the network, especially as several other blockchains have released their own funds to boost activity.
“Unless we have more funding, we will not be able to catch up and IOTA will slowly but surely continue to lose market share and market capitalization. To break this downward spiral, we must make significant changes to increase adoption and growth,” said Schiener.
“We want IOTA to have a chance to succeed in this market,” he added.
After the hard fork, there will be a temporary biweekly token release that will last 4 years, after which the total supply will be reached. This symbolic expenditure over a period of four years will amount to an average annual inflation of 12%.
After this four-year period, MIOTA’s circulating supply would reach 4.6 billion tokens.
In addition, the network has also established the Tangle Ecosystem Association, based in Zug, Switzerland, and the IOTA DLT Foundation, based in Abu Dhabi, UAE, to support the IOTA ecosystem, the developers said.