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IOTA Kickstarts EVM Targeting DeFi, Real World Assets
The EVM will let developers build applications with smart contracts that run on the IOTA network.
Updated Jun 5, 2024, 5:19 p.m. Published Jun 5, 2024, 5:15 p.m.
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- IOTA launched its layer 2 Ethereum Virtual Machine (EVM) network, focusing on real-world asset usage and introducing new functionalities to the IOTA ecosystem.
- The layer 2 network has a focus on bringing real-world assets on-chain, with a particular focus on the tokenization of physical assets, and features built-in protections against transaction ordering and MEV.
Blockchain network IOTA has started its layer 2 Ethereum Virtual Machine (EVM) network with a focus on real-world asset usage, the developers shared with CoinDesk over email.
Tuesday's launch introduced functionality such as smart contracts, cross-chain capabilities, parallel processing and security against Maximal Extractable Value (MEV) into the IOTA ecosystem, boosting the fundamentals of the IOTA token. The token has advanced 6% in the past 24 hours, data from CoinGecko show, while the CoinDesk 20 Index (CD20), a measure of the broader crypto market, gained less than 2%.
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The layer 2 will have a particular focus on decentralized financial (DeFi) applications and real-world assets (RWA) usage, IOTA co-founder Dominik Schiener said in a Telegram message. RWA refers to a sector within the cryptocurrency market that focuses on the tokenization of tangible assets that exist in the physical world.
“We are positioning IOTA to bring the real world to Web3 and help to bring trillions of assets and institutional investors on-chain,” Schiener said. “With the establishment of the IOTA Ecosystem DLT Foundation as the first DLT foundation registered under the Abu Dhabi Global Market (ADGM) regulations, IOTA is uniquely positioned to lead in Real-World Asset (RWA) tokenization.”
“We have adapted our technology stack specifically to adapt to the needs of institutional investors, including our on-chain KYC project to identify investors and enable institutional DeFi trading pools, and the MEV-resistance of our network to protect investors and meet regulatory compliance,” he added.
MEV is a predatory way for network validators to extract fees by rearranging and reordering transactions waiting to be added to the blockchain. The IOTA EVM claims to have a built-in feature to prevent transaction ordering, which helps avoid extracting value from the fees users pay to use the network.
Parallel processing involves sending multiple network transactions simultaneously instead of sequentially. This enables blockchain scaling, lower gas costs, and higher transaction processing speed.
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