IOTA is transitioning to a sustainable model that includes annual inflation, staking rewards, and transaction fee burning.
On Tuesday, December 24, Binance notified its users about major changes to IOTA’s tokenomics, a move that could reshape the token’s economic landscape. According to IOTA’s official statement on X, the platform is transitioning to a sustainable model that includes annual inflation, staking rewards, and transaction fee burning.
The updated framework introduces a 6% annual inflation rate, distributing 767,000 IOTAs IOTA $0.32 24h volatility: 5.2% Market cap: $1.12 B Vol. 24h: $44.67 M per epoch to validators and delegators. Average transaction fees will amount to approximately 0.005 IOTAs, driven by a gas fee of 1,000 nanos per computation unit. Moreover, the new system incorporates a deflationary mechanism through fee burning, which offsets inflationary pressures.
In addition to these features, the platform is offering sponsored transactions, enabling developers to cover transaction fees on behalf of users. As per the announcement, the platform aims to encourage the adoption with this approach.
The tokenomics overhaul has already impacted IOTA’s performance, with the token recording a 6% surge in 24-hour trading volume to $65.3 million. Notably, the token is currently trading around $0.319, up by 8% in the past day. However, IOTA’s value still remains underwhelming compared to other cryptocurrencies in this bull cycle, with a modest 12% annual growth.
The Relative Strength Index (RSI) for IOTA currently sits at 57 in the weekly chart, indicating a strong upward momentum. Moreover, the upward gradient of the RSI line shows that the bullish trend is strengthening and may continue.
Meanwhile, popular crypto analysts such as Poseidon and Crypto Nova have expressed bullish outlooks for IOTA. Poseidon noted that IOTA has broken out of its bearish weekly structure, adding:
“Altcoins often deliver significant pumps toward the end of a cycle, and I believe this one [IOTA] is well-positioned for a move higher, provided it holds above the mid-range.”
Crypto Nova echoed this optimism, suggesting that IOTA’s renewed focus on Real-World Asset (RWA) tokenization could attract new retail investors in the coming years. According to her, “older, more established projects like IOTA” often experience renewed interest during market upswings.
While some view the tokenomics update as a necessary step for IOTA’s long-term growth, the crypto community remains divided. In November, the platform announced its plans to launch a major upgrade through its Layer 1 (L1) protocol, named “IOTA Rebased”. The upgrade aims to enhance the scalability, decentralization, and programmability of the network. Many community members took to social media to investigate this upgrade’s timeline.
Despite its promising use cases, IOTA faces challenges in standing out amid high competition in the crypto space. However, its latest moves signal a calculated strategy to position itself as a frontrunner in tokenized economies. As analysts debate the long-term implications of these changes, the coming months will reveal whether IOTA can capitalize on its potential and secure a stronger foothold in the market.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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With a background in finance and a passion for innovation, Anisha has been covering the ever-evolving world of crypto for over four years. Her deep understanding of the crypto market have made her a trusted source for analysis and news. Whether it's dissecting the latest trends or decoding whitepapers, Anisha is dedicated to bringing clarity to the world of digital assets.
