The IOTA Foundation will increase its total holdings of all IOTA from about 2.78 billion to 4.6 billion at the end of the month. This represents a 65 percent increase. Investors show shock at inflation.
The IOTA Foundation made an announcement on Friday evening with far-reaching consequences: as of September 29, the upgrade Stardust will be injected into IOTA, increasing the total amount of all tokens by 65 percent. This is necessary to finance the further development of the ecosystem, they say. Over the next four years, most of the newly generated tokens will go to the IOTA Foundation in Berlin, the newly established Foundation in Abu Dhabi, and the Tangle Ecosystem Association based in Switzerland. On social networks such as X (formerly Twitter), many commentators are appalled by the deliberate inflation, which is now expected to average 12 percent for IOTA by the end of 2027.
Four strategic decisions are being disseminated by the IOTA Foundation via the memo, which were secretly made without community participation or voting. “The IOTA Central Bank strikes” can be read as well as “Scam” and “R.I.P.” by commentators. The surprising increase in IOTA’s total holdings is only possible because the foundation has the long leverage through the central coordinator it controls. With Stardust, however, the IOTA coordinator is then to be replaced by a ten-seat committee.
IOTA Stardust: Hard Fork on September 29th
From a technological perspective, the Stardust upgrade at IOTA involves a hard fork. The foundation promises to maintain an old, alternative network under the title IOTA Stardust Classic for another four weeks, where the massive token increase does not happen. However, experience from the likes of “The Merge” at Ethereum (ETH) has taught that such spin-offs typically attract little interest or support.
Assembly (ASMB): IOTA side project gets scrapped before launch
Back in July 2022, we raised major doubts about whether the IOTA side project Assembly (ASMB) would ever go live, and we had to take a lot of criticism for it. But now it has become official. “The Assembly project and tokens will not continue,” writes the IOTA Foundation. Those who participated in the Assemly Staking will be rewarded with an airdrop into IOTA. For this, 3.5 percent of all IOTA – calculated on the future, increased total – is reserved. In view of the fact that for “Contributors” here with the upgrade Stardust 5 percent of all IOTA are spent, the Assembly Airdrop seems strangely undersized. Because by “Contributors” the IOTA Foundation understands “key partners” and “selected members” of the community, so apparently even foundation head Dominik Schiener and his confidants.
Shimmer (SMR) remains as an IOTA side project
Unaffected by the Stardust upgrade for IOTA, at least for now, is the Shimmer (SMR) side project. It will continue to serve as a money-losing testnet and will soon open the doors toward Decentralized Finance (DeFi) with the integration of the Ethereum Virtual Machine (EVM), according to reports. But Shimmer’s price curve plunged to a daily minus 20 percent – what else SMR will be good for when IOTA is technologically upgraded remains unclear.
Conclusion: IOTA with shock news for investors.
You can spin the IOTA Foundation’s decisions back and forth almost any way you want – there are no good conclusions to be drawn for investors. IOTA is currently trading at around 0.16 U.S. dollars with a 4 percent daily minus and thus at its lowest level since the spring of 2020. Even if the now new IOTA tokens may only be sold in tranches by the foundations – from there, constant price pressure will emanate on IOTA for the coming years. Rarely has a cryptocurrency presented itself in such a centralized manner as IOTA currently does with the quasi omnipotent foundation under boss Dominik Schiener.