What is the IOTA blockchain and its cryptocurrency IOTA?
IOTA is a Layer 1 blockchain created in 2015, dedicated to the tokenization of real-world assets (RWA), decentralized infrastructures (DePIN), and real-world adoption use cases. The IOTA project is based on a Directed Acyclic Graph (DAG) architecture and is expanding into key markets notably located in Africa, the United Kingdom, the United Arab Emirates, and Europe. Here's everything you need to know about the IOTA blockchain, its cryptocurrency, and its ecosystem.
Table of contents:
1. What is the IOTA blockchain?
2. How does IOTA work?
3. The IOTA blockchain: use cases and flagship projects
4. What is the IOTA cryptocurrency?
5. The IOTA blockchain and cryptocurrency: key takeaways
1. What is the IOTA blockchain?
The IOTA blockchain is designed to be scalable, secure, and efficient, notably through a delegated proof-of-stake (DPoS) consensus mechanism. Thus, unlike traditional blockchains, IOTA enables optimized transaction processing through its Mysticeti protocol, which secures and validates blocks without relying on the energy-intensive Proof-of-Work (PoW).
👉 On the same topic, see the differences between Proof of Work (PoW) and Proof of Stake (PoS).
Initially designed as a DAG network for real-world and industrial use cases, IOTA has recently evolved into a next-generation Layer 1 architecture. It now relies on a structured DAG ledger, combined with the Move virtual machine (MoveVM) and DPoS consensus, offering advanced programmability, fast transactions, and a developer-friendly environment.
The IOTA blockchain is particularly known for its commitment to the tokenization of real-world assets (RWA), which has already led to adoption by industrial and governmental partners in the context of commercial, financial, and other types of projects.
2. How does IOTA work?
IOTA is based on a delegated proof-of-stake (DPoS) model, meaning validators must lock a certain amount of tokens to secure the network and validate transactions. The IOTA ecosystem includes two distinct environments:
• IOTA Mainnet (Layer 1): The primary network used to execute transactions and run real-world applications.
• IOTA EVM (Layer 2): This environment, compatible with the Ethereum blockchain, allows developers to use existing EVM tools to deploy smart contracts on IOTA without requiring modifications.
IOTA supports the Move language and the Ethereum Virtual Machine (EVM) for its smart contracts, providing developers with increased flexibility. Moreover, Move brings enhanced security, better asset control, and parallel transaction execution, while EVM ensures compatibility with the Ethereum ecosystem.
Through IOTA Rebased, the network evolves by integrating MoveVM and EVM, thus improving scalability, decentralization, and opportunities for developers.
3. The IOTA blockchain: use cases and flagship projects
IOTA’s adoption in industrial and financial sectors
The IOTA blockchain plays a key role in securing and automating the exchange of data and value, particularly in industrial and financial sectors. Here are two concrete use cases:
• Digital Twin, enabling the creation of digital twins to optimize industrial asset management.
• Multiknip, enabling decentralized energy management and efficient resource allocation.
Collaborations between IOTA and other projects
IOTA is involved in several initiatives aimed at standardizing and securing data exchanges at the institutional level, including:
• EBSI (European Blockchain Services Infrastructure), the European blockchain infrastructure to secure public services.
• Decentralized identity verification solutions (KYC - Know Your Customer)
• Solutions promoting traceability and transparency in the circular economy through Digital Product Passports (DPP)
Through these real-world applications, IOTA demonstrates its potential as a key infrastructure for asset tokenization and global finance.
4. What is the IOTA cryptocurrency?
IOTA is the native token of the eponymous blockchain.
IOTA Tokenomics
Here are ~the tokenomics~ of the IOTA cryptocurrency:
• Initial total supply: 4.6 billion tokens migrated from the old Stardust network.
• Ongoing issuance: 767,000 new tokens are created at each epoch.
It’s important to note that there is no fixed maximum supply of IOTA tokens; the total supply fluctuates based on inflation and the fee-burning mechanism.
Uses of the IOTA token
The IOTA token is used for:
• Staking, to participate in the DPoS consensus by securing the network, while earning passive and regular rewards.
• Transaction fees, which are paid in IOTA.
• Monetary exchanges, as IOTA functions as a digital currency with advanced capabilities via smart contracts.
• Governance, as IOTA token holders have voting rights to participate in protocol upgrade decisions.
6. The IOTA blockchain and cryptocurrency: key takeaways
IOTA is positioning itself as an innovative Layer 1 blockchain thanks to its recent upgrade. This major evolution introduces compatibility with MoveVM and a Delegated Proof of Stake (dPoS) consensus supported by 150 validators. The result is a high-performance, low-cost network with a burn mechanism, designed to encourage developer adoption.
This new architecture opens many possibilities: tokenization of real-world assets (RWA), stablecoins, liquid staking tokens (LSTs), and even on-chain order books. Unlike many projects backed by Venture Capital (VC), IOTA relies on strategic partnerships, businesses, and public institutions. Its growing adoption by supply chains and companies involved in international trade strengthens its position as a trusted and versatile Web3 infrastructure.
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Nothing in this article constitutes investment advice. Investing carries a risk of capital loss; everyone should only invest what they are prepared to lose.
