Celebrations at IOTA: The foundation has received approval from the regulatory authority ADGM in Abu Dhabi and promises to finance more than 100 million US dollars in IOTA tokens. Read all about the background here.
Yesterday afternoon, the price of IOTA skyrocketed by 40 percent within an hour and the reasons for this were quickly identified. The IOTA Foundation made public via X and blog post that it had been officially approved by the regulatory authority Abu Dhabi Global Markets (ABGM) in the capital of the United Arab Emirates (UAE). The funding of the new IOTA Foundation is to be secured by tokens worth more than 100 million US dollars for the next four years.
IOTA Foundation CEO Dominik Schiener announced the expansion to Abu Dhabi back in September. He now writes on X that the “new headquarters in the United Arab Emirates” will reposition IOTA. Previously a “corporate blockchain in Europe”, IOTA is set to become “one of the largest global crypto ecosystems” in the future. The Middle East and Africa are to be targeted first.
The crypto markets reacted positively to these plans and even temporarily sent the IOTA price curve to an annual high of just over USD 0.28. Schiener’s announcement yesterday that the Ethereum Virtual Machine (EVM) will be integrated into the IOTA mainnet in Q1 2024 is likely to have contributed to the price jump. The EVM was activated for the IOTA side project Shimmer at the end of September. It is the standard module for organizing smart contracts and thus enables a wide range of applications. Schiener cites Web3, DeFi, trading infrastructure and tokenized asset classes as examples of what the IOTA network can achieve with the EVM.
Is everything really suddenly rosy at IOTA?
So this day raised hopes of a new start for IOTA. Critical voices remained in the minority. However, some of the details of IOTA’s big plans raise familiar doubts:
– The advertised 100 million US dollar financing of the foundation in Abu Dhabi is on shaky ground. It was only made possible by the 65% increase in the total amount of all IOTA tokens, which was pushed through by Schiener in the fall and can be classified as an inflationary hammer. The IOTA Foundation Abu Dhabi will now be allocated 552 million tokens in tranches over the next four years, representing 12 percent of all IOTA. The new foundation will probably have to sell these tokens constantly to finance itself, which could exert pressure on prices. If IOTA falls below a price of USD 0.20, the total amount of funding for the Abu Dhabi project will also fall. External financiers from the UAE for IOTA are not yet known.
– The EVM would indeed be a major technological advance for IOTA and hardly anyone had expected such rapid integration as has now been announced. Whether the IOTA EVM will also find favor in the crypto industry is another question. After all, more than 100 altcoins and DeFi protocols already have the EVM in their program, and the competition is fierce. In addition, IOTA still has the stigma of not having a truly decentralized network. When Schiener and the foundation talk about “blockchain” in connection with IOTA, experts consider this to be a misnomer.
– The location of Abu Dhabi attracts parts of the crypto industry almost magically. Tax exemption and moderate regulation are good arguments. But one should also not forget: The United Arab Emirates are absolute monarchies and laws are based on the state religion of Islam. For example, women in the UAE are disadvantaged in terms of their rights, homosexuality is prohibited and drug use is drastically punished. For a start-up scene and a diverse working environment, such regulations are major drawbacks and IOTA is at risk of losing credibility.
Conclusion: IOTA with a tailwind from Abu Dhabi
Schiener is now reaffirming his goal of returning IOTA to the top 10 most important cryptocurrencies. This is a long way from the current position of around 80. The “Coordicide”, with which IOTA wants to say goodbye to central control instances in the network, is still not scheduled, but is the biggest challenge for crypto experts. The new tokenomics at IOTA suggest that the price curve could suffer from recurring massive sales by the foundations. But for now, Schiener and the IOTA Foundation have scored a coup. Whether this was a flash in the pan or triggers a sustained momentum – we’ll stay on the ball for you on IOTA.
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