The IOTA Foundation officially announced on April 22, 2025 that it will implement its largest ever mainnet upgrade to a new Rebased protocol on May 5 of the same year. This upgrade marks IOTA's full transformation from its original centralized verification model to a decentralized, high-performance blockchain platform.

The Rebased protocol is designed to address the limitations of IOTA's early design, in particular its reliance on centralized coordination nodes, in favor of a decentralized consensus with permissionless validation nodes. The upgraded network will deploy a Delegated Proof of Stake (DPoS) system with 50 validation nodes initially to validate transactions, with a gradual expansion to 150 in the future.

On the technical side, the upgraded network is expected to have a processing power of over 50,000 transactions per second (TPS), putting IOTA on par with high-speed Layer 1 chains such as Solana, Aptos and Sui in terms of performance. In addition, the upgrade will introduce a native pledge mechanism that will allow IOTA token holders to be rewarded for their pledges, further driving the decentralization of the network.

Smart contracting functionality will also be available with the upgrade, using the MoveVM virtual machine developed in the Move language. This will open up new application scenarios for IOTA such as decentralized finance (DeFi), non-homogenized token (NFT) markets, gaming and asset tokenization systems.

During the main network migration, IOTA will release a detailed guide to getting started with authentication nodes, a public pledge tutorial, and a network health monitoring tool to ensure the upgrade process goes smoothly. It is widely recognized that this upgrade will strengthen IOTA's strategic position in the blockchain ecosystem, transforming it from an early IoT transaction network to a general purpose Layer 1 infrastructure.

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