IOTA to undergo major mainnet upgrade to Rebased protocol in May

IOTA will implement its largest network upgrade to date on May 5, transitioning its mainnet to the new IOTA Rebased protocol. 

The upgrade introduces full decentralization, staking, Layer 1 smart contract support via MoveVM, and scalability exceeding 50,000 transactions per second.

The Rebased protocol replaces IOTA’s (IOTA) previous architecture with a delegated Proof-of-Stake (DPoS) model, launching with 50 permissionless validator slots and plans to scale to 150, according to a company note on the matter. 

This marks the network’s full shift to decentralized consensus and prepares it for more complex applications and broader adoption. 

In other words, IOTA is modifying its system to make it faster, more secure, and fully community-run. This upgrade also lets people earn rewards and build apps directly on IOTA without needing other tools.

MoveVM smart contract integration will allow developers to build decentralized apps directly on IOTA’s base layer. IOTA becomes the third network after Aptos and Sui to offer MoveVM at Layer 1. The upgrade also reactivates the IOTA EVM, which will operate alongside MoveVM.

Rewards for stakers 

For the first time in IOTA’s history, the upgrade will enable staking rewards for $IOTA holders, offering annual yields between 10% and 15%. A new fee-burning mechanism and minimal adaptive transaction fees are also being introduced. 

The IOTA Gas Station feature will allow developers to subsidize transaction costs for end users, according to the company’s note. 

The network’s initial Genesis validators include a mix of foundations, ecosystem players, and staking providers such as IOTA Foundation, Luganodes, Stakin, and Nansen.

IOTA is positioning the upgrade as a step toward institutional and governmental use cases, including digital identity, supply chain infrastructure, and on-chain finance. The Rebased upgrade follows community governance approval and a full audit process.