IOTA Announces Rebased Protocol Upgrade for May 2025, Promising 50,000 Transactions Per Second

Layer-1 blockchain IOTA has announced that its upgrade to the highly anticipated Rebased Protocol is scheduled for Monday, May 5, 2025. This upgrade marks the official migration from the Stardust network to the new IOTA network. The team behind IOTA has described this upgrade as the chain’s “largest, most complex, and most important upgrade to date.”

Ask Aime: What impact will the IOTA Rebased Protocol upgrade have on the cryptocurrency market?

The Rebased Protocol introduces several key features that will be available immediately upon launch. One of the most significant enhancements is the Mysticeti consensus protocol, which aims to achieve high scalability and faster transactions. With this upgrade, IOTA Rebased is expected to handle over 50,000 transactions per second with transaction finality under 500 milliseconds.

Additionally, IOTA has integrated smart contracts based on the Move programming language directly onto the Layer-1. This integration allows developers to build sophisticated, scalable, and secure decentralized applications (dapps). IOTA is noted to be only the third network offering the MoveVM, following Sui and Aptos.

The Rebased upgrade also brings minimal transaction fees with an adaptive fee-burning mechanism. This is complemented by the new IOTA Gas Station, which enables developers and businesses to cover their users’ fees, allowing users to execute transactions without holding IOTA coins themselves.

Furthermore, the Layer-1 network will transition to a fully decentralized delegated Proof-of-Stake network (DPoS). This network will initially feature 50 permissionless validator slots, with plans to gradually increase to over 150. The initial IOTA Rebased Genesis Validators include prominent entities such as the IOTA Foundation, IOTA Ecosystem DLT Foundation, Tangle Ecosystem Association, and several others.

The upgrade follows a comprehensive governance vote, technical testing, review, and audit process. In the December governance vote, the IOTA community supported the Rebased protocol upgrade proposal. The IOTA Foundation explained that the blockchain would switch from L1 to a Move-based object ledger, and token holders voted in favor of this transition.

In addition to the technical enhancements, the Rebased upgrade will introduce staking rewards for the first time in the project’s history. This new system allows IOTA token holders to actively participate in securing the network and earn rewards for their efforts. The upgrade is expected to offer an annual percentage yield (APY) of up to 10%–15%.

The announcement highlights that IOTA’s official migration to the new IOTA Rebased protocol marks a pivotal advancement in the project’s history. This upgrade is set to bring significant new adoption and applications to the ecosystem, helping to onboard institutional investors and even countries to its tokenization, trade digitization, trade finance, and digital identity platforms.

IOTA aims to introduce advanced applications to its Web3 ecosystem, including DeFi, on-chain orderbook exchanges, supply chain systems, and stablecoins. This upgrade is expected to position IOTA as a leading player in the blockchain and Web3 space, with a focus on real-world adoption and institutional integration.