IOTA returns: Will the project find a second wind?

​The peak of IOTA’s popularity came in 2017-2018, when the project was among the top 10 cryptocurrencies, promising a revolution on the Internet of Things (IoT) sector. However, the network faced a wave of criticism due to decentralization issues, and over time, interest in the project waned. To address this, the IOTA team announced a major update. But will this be enough to restore its leadership position?

The name IOTA is directly linked to the concept of the Internet of Things (IoT). Since its inception in 2015, the project aimed to create an infrastructure for micropayments and data exchange between smart devices — from sensors and home appliances to autonomous vehicles and ports. This was supposed to be not just a cryptocurrency, but a protocol for interaction in the digital economy of the future.

The first version of the IOTA platform was launched in October 2016, and by December, the team held an ICO, raising about 1.33 BTC — a modest amount for the time, but enough to get the project started and integrate with early adopters.

IOTA made its way to exchanges only in mid-2017, but quickly gained attention. A notable example is the SatoshiPay service, which focused on micropayments and switched from Bitcoin to IOTA. The reason was simple: no transaction fees, high speed, and the flexibility of the token, which could be divided into smaller units than BTC.

From the idea of IoT revolution to implementation failures

Technically, IOTA stood out from other cryptocurrencies from the start. Instead of a classic blockchain, the project used a structure called Tangle — a directed acyclic graph (DAG), where each transaction confirms two previous ones. This was supposed to ensure fee-free transactions and scalability — especially important for the IoT ecosystem, where devices make thousands of small operations every day.

On paper, everything looked promising. IOTA actively partnered with major companies, including Bosch and Volkswagen, and even discussed integrating solutions into the logistics chains of Chinese ports. However, the ambitions were ahead of reality.

The project faced a fundamental architectural flaw — for security, a centralized coordinator component was used, which undermined the idea of decentralization, the very foundation of the crypto movement.

In addition, the project relied on a proprietary cryptographic algorithm that faced serious criticism, along with development difficulties, the lack of a comprehensive smart contract environment, and poor transparency. All of this led to growing disappointment among even the most loyal community members. The project with the Chinese ports never materialized. In 2020, the network had to be temporarily suspended due to a hack of the official wallet, Trinity Wallet.

The Trinity Wallet hack and rising competition

Over time, it became clear: implementing such a large-scale and technically ambitious concept is not easy. The core architectural element of IOTA — the Tangle system — looked promising in theory, but in practice, it faced several limitations. To ensure network security in the early stages, developers implemented a centralized coordinator that confirmed transactions. This contradicted the philosophy of decentralization, which is one of the key values in the crypto community.

Additionally, the project moved away from proven cryptographic solutions and used its own implementation, which drew criticism from security experts. In 2020, the situation worsened with the hack of the official wallet, Trinity Wallet, after which the network was temporarily shut down. These incidents significantly undermined trust in the project.

At the same time, competition in the sector intensified. More flexible and faster blockchains with smart contract support, transparent tokenomics, and active venture capital backing began to emerge. Against this backdrop, IOTA, despite its technical originality, was increasingly seen as an experiment that had not lived up to expectations. The project, once at the forefront of the crypto industry, gradually lost relevance and faded into the background.

Rebased Mainnet as a restart attempt

Against the backdrop of lost positions and a prolonged crisis of trust, the IOTA team decided to take radical action. Instead of making incremental improvements to the old architecture, they chose to start from scratch. This is how the Rebased Mainnet was born — a new version of the network with no technical continuity from the previous implementation. The project’s switch to the new protocol is scheduled for May 5.

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The new L1 network is built on MoveVM — a virtual machine well-known from projects like Sui and Aptos. It’s a powerful and flexible environment focused on security and scalability. Right from the start, Rebased Mainnet demonstrates impressive features: up to 50,000 transactions per second and millisecond finality.

What sets it apart is that technical improvements go hand-in-hand with a new ideology. This time, the project emphasizes its independence: 80% of all tokens are already in circulation, there are no VC allocations, and staking offers holders up to 10-15% annual returns.

Along with these advancements, IOTA is returning with real-world use cases. Solutions based on it are already operational in Kenya, UAE, and UK, including cases in logistics and trade. Partnerships with organizations like the World Economic Forum, Trademark Africa, and the Tony Blair Institute underscore the team’s commitment to implementing blockchain technology in the institutional space.

Finally, in the near future, the project plans to launch a new consensus algorithm, Starfish, based on a DAG architecture, but capable of processing transactions in parallel and almost in real-time. This is another step towards a more resilient and decentralized model.

Will it take off again?

IOTA is a rare case in the crypto world where a project with a rich history and bold ambitions finds the strength to make a radical comeback. This isn’t just a cosmetic upgrade, but a complete change of approach: new architecture, new tools, and a fresh dialogue with the market. Unlike many newcomers in the L1 segment, IOTA already has what’s difficult to build from scratch — experience, real use cases, and recognition.

But is this enough to regain lost trust? Over the years, the industry has advanced significantly: dozens of new blockchains, high demands on UX, institutional standards, and intense competition for liquidity.

However, Rebased Mainnet appears to be a serious bid for success. Technologically mature, with a balanced tokenomics and a living, albeit niche ecosystem.

Whether IOTA will fly again — only time will tell. But today, at least, the project has a real chance. And it looks much more convincing than the first attempt.