Friday, September 22, 2023

IOTA collapses after a decision by its developers

The price of the cryptocurrency IOTA has fallen by more than 10% in the last week. The decline is fueled by recent announcements from the development team.

At the time of this publication, IOTA is trading for $0.1524. 7 days ago, the cryptocurrency was trading at $0.1727.

The chart below, created using TradingView tools, shows that while there were some upward corrections, IOTA behaved with an obvious bearish trend throughout the week (with local minima and maxima lower than the previous ones).

Iota Collapses After A Decision By Its Developers

The driver of this decline, which increased over the last 2 days, was an announcement from the IOTA development team. This was discussed in detail in the IOTA Foundation’s official blog on September 15th some features that will be available with the Stardus update for the cryptocurrency. “With IOTA 2.0, it is time to make bold decisions, strengthen IOTA and maximize the utility and economic activity of the IOTA network.” they point this out.

In summary, there are four major changes being implemented in IOTA, with the fourth being the most controversial. First, “Programmability” is introduced through the integration of universal smart contracts.

In second place is We will try to maximize the scalability of IOTA The “complementary preparation network” Shimmer Network will play a key role in this.

In third place The assembly project was reportedly scrapped. This is a smart contract network built within the IOTA ecosystem (but not the IOTA network itself). “Instead, we will focus our efforts on the IOTA Network, our general smart contract framework, to anchor Layer 2 blockchains on IOTA and develop Layer 1 smart contracts,” the organization says.

The fourth point has to do with IOTA “Tokenomics”.. This is how the organization explains it:

We will establish a dedicated ecosystem fund that will help further decentralize IOTA governance and support the growth of the ecosystem. The ecosystem fund will be funded by temporary token inflation that will last four years, bringing the total supply to 4.6 billion IOTA tokens.

IOTA Foundation

The announcement was not well received by the market. One of the features of IOTA is that the supply of coins has already been fully spent. This means that it is not yet an inflationary financial asset. This means that if supply is stable, the price must increase as demand increases, according to the simple law of supply and demand.

Iota Collapses After A Decision By Its Developers
IOTA currency – Source: CoinMarketCap.

With the Stardus update The cryptocurrency tokenomy will change and it will be an inflationary asset for at least the next four years. Some investors expressed their dissatisfaction with the changes on social networks. For example, someone who identifies themselves with the pseudonym GabsCrypto, wrote at This is not a serious project. This is not decentralization. This is a total shit show. “I would never buy a single IOTA.”

Another user from the same social network explained that the IOTA development team decides to finance themselves by increasing the issuance of the cryptocurrency because “they have been developing IOTA for the past 9 years without much funding.” This person adds that it would have been better for them if they had done something like this at the beginning of the project and not several years later.

Such an opinion is interesting. The market may have seen negatively not only that IOTA’s circulation increased, but also that the rules of the game were changed in the middle of the game. (which cannot happen, for example, with Bitcoin, whose code guarantees that its monetary policy remains unchanged as long as the network exists).

We will have to wait for the next few days, weeks and months to see if IOTA manages to recover or if this is the start of a price debacle that will see it reach even lower prices.

What is IOTA?

IOTA is a cryptocurrency and distributed ledger platform launched in 2015. Unlike other cryptocurrencies that use blockchains and mining, IOTA is based on an architecture called “Tangle”. It is a system of interconnected nodes that eliminates the need for miners, thereby eliminating transaction costs and increasing scalability.

IOTA’s vision is to be the backbone of the Economy of Things and enable secure transactions between devices in the Internet of Things (IoT). IOTA aims to provide a zero-fee micropayments solution that allows large numbers of transactions to be processed on a decentralized network without intermediaries.

Long-term, IOTA has not proven to be a good investment as can be seen in the historical price chart below:

Iota Collapses After A Decision By Its Developers
Historical IOTA price. Source: CoinMarketCap.

Cryptocurrency became a trend in 2017 and many considered it as “Bitcoin killer» (Bitcoin Killer). It was in the top 10 of the Ranking by market capitalization. But after the initial turmoil and crossing the $5 mark IOTA was never able to reach new all-time highs not even in the 2020-2021 bull cycle, when most digital assets broke their own previous records.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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