What is IOTA?
IOTA is a distributed ledger that started in 2016 with a focus on the Internet of Things. In May 2025 it was rebuilt as a delegated proof-of-stake network with Move-based smart contracts, and it now concentrates on digital identity, trade documentation and tokenization.
Utility Lens
What IOTA actually does
Provides low-cost transactions, smart contracts and identity tools for recording and sharing trustworthy data between businesses and governments.
- Real-world usage
- earlyThe rebuilt network is live and pilots exist, but sustained on-chain usage for its stated trade and identity purpose is still small.
- Token necessity
- essentialSince Rebased, IOTA pays transaction fees and is staked to select and reward validators.
- Decentralization
- moderateThe old central Coordinator is gone and validators are chosen by stake, but the validator set is still fairly small and the IOTA Foundation remains influential.
- Track record
- longLive since 2016, with a weeks-long network halt in 2020 after a wallet hack and a full protocol rebuild in 2025.
What it’s used for
Holders stake IOTA to validators to secure the network and earn rewards. Developers build smart contracts in the Move language, and the IOTA Foundation works on projects that digitize trade documents and verifiable identity. Real economic activity on-chain is still limited.
Role of the IOTA token:
Evidence of real use
- The IOTA Rebased upgrade began migrating the network on May 5, 2025. Source
- At the Rebased launch, 4.6 billion IOTA were migrated from the previous Stardust network, and IOTA is now used for staking and fees. Source
- In February 2020 the IOTA Foundation halted the network's Coordinator to stop thefts from its Trinity wallet. Source
ISO 20022: claim vs. reality
- What’s documented
- We found no documented ISO 20022 role for IOTA: neither IOTA nor the IOTA Foundation appears on the ISO 20022 Registration Management Group roster, and we found no official IOTA ISO 20022 product or banking pilot. The Foundation's trade work focuses on other document and data standards.
- What you’ll hear online
- IOTA is one of the 'ISO 20022 compliant' cryptocurrencies that banks will rely on.
- Reality check
- ISO 20022 is a bank messaging standard; it does not certify, approve or list any cryptocurrency. IOTA's appearance on 'ISO 20022 coin' lists comes from third-party content, not from the standard's bodies or the IOTA Foundation.
How IOTA works
Originally, IOTA used a structure called the Tangle and relied on a foundation-run Coordinator to confirm transactions. The 2025 Rebased upgrade replaced this with a delegated proof-of-stake design: token holders delegate IOTA to validators, and a committee of validators orders and finalizes transactions within seconds. Existing balances moved over automatically, with no manual migration. Validators who misbehave risk losing rewards, and delegators share in the rewards of the validators they choose.
The network now runs smart contracts written in Move, a language designed to make digital assets harder to duplicate or lose by mistake. Users pay small fees in IOTA and may lock some IOTA as a storage deposit when they create on-chain data. Move treats tokens and other assets as objects with strict ownership rules, which can reduce some common smart-contract bugs. Holders also use IOTA to vote on protocol upgrades.
The IOTA Foundation focuses on public-sector and trade use cases, such as digitizing customs and shipping documents and issuing verifiable digital identities. These are mostly partnerships and pilots, so judge them by live usage rather than announcements. The Foundation has also released developer toolkits for notarization and identity, which let apps anchor tamper-evident records on the ledger without exposing the underlying documents.
Key moments
- 2016IOTA network launches after a 2015 token sale.
- 2020The Coordinator is halted for several weeks after attackers steal funds via the Trinity wallet.
- 2023The Stardust upgrade adds native tokens and new output types.
- 2025IOTA Rebased launches, switching to delegated proof of stake and Move smart contracts.
Supply
About 4.6 billion IOTA were migrated into the Rebased network in 2025. Since then, new IOTA is minted each epoch to pay staking rewards, while a share of fees is burned, so supply now grows modestly instead of being fixed.
Risks to understand
- Execution risk: the 2025 rebuild is recent, and the new design has a short live history.
- Inflation: the move to staking rewards means supply grows unless burns offset it.
- Many trade and identity initiatives are pilots that may not become sustained on-chain usage.
- Past incidents, including the 2020 network halt, show how dependent the project has been on the IOTA Foundation.
IOTA FAQ
What changed with IOTA Rebased?
The 2025 upgrade replaced the old Coordinator-based design with delegated proof of stake and added Move smart contracts.
Is IOTA's supply fixed?
No. Since Rebased, 767,000 new IOTA are minted each epoch to pay staking rewards, partly offset by burned fees, so there is no fixed maximum supply.
Can I stake IOTA?
Yes. You can delegate IOTA to a validator from a supported wallet while keeping control of your tokens.
Sources
- The IOTA Rebased Mainnet Upgrade — IOTA Foundation
- IOTA Token — IOTA Docs
- Trinity Attack Incident Part 1: Summary and next steps — IOTA Foundation
- Registration Management Group member list — ISO 20022 Registration Authority
Last reviewed October 4, 2026 by The Crypto Guide editorial team. Utility Lens ratings are editorial judgments, not investment advice. Market data from CoinGecko. Spot an error? Request a correction.