IOTA Rebased: The Move to a Layer 1 Object Ledger

The IOTA Foundation has announced a sweeping upgrade to its blockchain network, dubbed “IOTA Rebased,” which will transition the Layer 1 network to a Move-based object ledger

Announcing a sweeping upgrade to its blockchain network, the IOTA Foundation is aiming to bolster its Layer 1 protocol with a shift to a Move-based object ledger, introducing programmability and paving the way for tens of thousands of transactions per second.

If approved by token holders, the upgrade will also transition IOTA (CRYPTO: IOTA) to a delegated proof-of-stake mechanism, with 150 permissionless validators securing the network in a bid to decentralize the protocol.

The foundation is proposing to replace IOTA's existing architecture with a decentralized structure, enabling faster and more secure transactions.

The proposal will also integrate the Move programming language, enabling smart contracts directly on the Layer 1 network.

This feature is designed to expand IOTA's application in industries such as supply chain tracking, asset tokenization, and digital identity systems, the company said.

IOTA has created a governance post for the community to discuss and debate the protocol upgrade. The vote will officially go live on December 2.

In August, IOTA unveiled a blockchain-based tool to simplify music rights management in the film industry. Developed under the European Blockchain Pre-Commercial Procurement initiative, the tool aims to streamline negotiations and secure intellectual property rights.

Joining the Move ecosystem alongside platforms like Sui (SUI) and Aptos (APT), IOTA will be the first Layer 1 network to adopt this architecture if the proposal is approved.

The IOTA Foundation has launched a Move-based testnet to showcase the upgrade's potential, which will also include tools for developers, such as a browser wallet extension and updated documentation.

The economic model under the proposed system introduces staking rewards and a dynamic token supply. Validators and delegators will earn newly minted IOTA tokens, with an initial annual inflation rate of 6-7%, which translates to a projected 10-15% annual return for stakers, according to the company release.

This model aims to incentivize network participation while maintaining fair tokenomics through mechanisms like fee burning.

“This upgrade could significantly accelerate our adoption efforts by introducing programmability and full decentralization to IOTA. We believe this proposal has the best chance of delivering value for the IOTA ecosystem,” said Dominik Schiener, Co-Founder and Chair of the IOTA Foundation.

With the Rebased proposal, IOTA is aiming to bolster its standing as a leading blockchain infrastructure, focusing on bridging decentralized technology with practical, real-world applications.