With the launch, the Internet of Things (IoT) protocol has made a move towards Web3, along with adding new utility of decentralized applications (dApps).
Interestingly, the move now supports interoperability of IOTA Smart Contracts with Ethereum Virtual Machine (EVM) and any smart contract written in Solidity. This opens additional utilities for NFT marketplaces, decentralized finance (DeFi), and decentralized exchanges (DEX).
For example, IOTA’s Tangle-based NFT Marketplace will allow minting of NFTs without transaction fees. On the back of the NFT craze, IOTA will compete with offerings on chains like Solana and Ethereum.
Having said that, IOTA already allows transactions without blocks or miners. Therefore, sending one transaction allows the validation of two other transactions on the network without any fees.
Additionally, the development has offered a great opportunity to bridge IOTA with Ethereum at a later stage. This is when developers have the flexibility to opt for development languages like Solidity, Rust, and Go (TinyGo).
Apart from interoperability and composability, the release targets the improvement of fees and scalability.
For scalability, the sharded smart contract network allows defining scalability of each contract without effect on the rest of the network. Another addition to the release is off-ledger requests. It should significantly reduce the load on the IOTA base layer.
Another noteworthy feature on IOTA dApps is developer-defined fees and token incentives for users. This again puts IOTA in direct competition with smart chains like Ethereum and Cardano.
However, interestingly, Co-founder Dominik Schiener has said that IOTA is not an “Ethereum killer.”
I just wanted to highlight one major thing: #IOTA is not a competitor to Ethereum and we are not an “Ethereum killer”.
I was actually close to the team back in 2013 – 2016 (during the founding years in Zug) and was an early investor and builder on #Ethereum.
— Dominik Schiener (@DomSchiener) October 22, 2021
He added that the goal is to become “a leader alongside Ethereum and make sure that our future will be decentralized.”
“As long as we keep on innovating, we are going to go much further than most of us can imagine today. Bitcoin is obviously crucial in leading us this way because it’s the most fungible, it’s the most traded asset there is today.”
Before the end of 2021, Schiener envisions fully upgrading the IOTA 2.0 network. He added,
“Version 1.5 introduced some very exciting new concepts onto the IOTA mainnet. It still relies on a coordinator, this entity on the network that helps secure the network and its transactions. With 2.0, we basically completely removed the coordinator, so it’s a leaderless consensus protocol. “
According to the exec, the “objective is that before IOTA 2.0 hits the mainnet, it has smart contracts.” Meanwhile, IOTA has made beta smart contracts available on 2.0 DevNet.