The second quarter of 2024 has been a transformative period for the IOTA Foundation, marked by major technological milestones, strategic organizational shifts, and expanded real-world adoption. From the launch of the IOTA EVM chain to the rollout of the IOTA 2.0 Testnet, this quarter has laid the foundation for a more decentralized, scalable, and business-ready ecosystem. This report dives into the progress made across research and development, technology adoption, ecosystem growth, governance, and regulatory engagement—highlighting how IOTA is evolving from a protocol-focused project into a full-stack digital infrastructure platform.
Research & Development: Building the Foundation for Decentralization
The IOTA Core team has made significant strides in advancing the network’s transition toward full decentralization. The most notable achievement was the release of the IOTA 2.0 Testnet, which replaces the centralized Coordinator with a Proof-of-Stake (PoS) consensus mechanism. This marks a pivotal shift in IOTA’s architecture, enabling true peer-to-peer validation and long-term network sustainability.
A key innovation introduced with IOTA 2.0 is Mana, a reputation-based resource allocation system designed to replace energy-intensive Proof-of-Work (PoW). Mana helps secure the network while significantly reducing environmental impact—aligning IOTA with eco-conscious blockchain principles.
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Layer 2 Smart Contracts and EVM Integration
The L2 Smart Contracts team successfully launched the IOTA EVM chain this quarter, unlocking full programmability on the IOTA network. This milestone enables developers to build Ethereum-compatible smart contracts using familiar tools and frameworks, dramatically lowering the barrier to entry.
With the EVM live, the team is now focused on improving user experience, optimizing performance, and preparing for future integration with L1 smart contracts—a critical step toward unified, scalable computation across IOTA’s layered architecture.
Developer Experience and Tooling
To support the growing developer community, the Developer Experience team enhanced EVM documentation with practical examples, tutorials, and integration guides. Educational content around IOTA 2.0 has also been expanded, helping developers understand the new consensus model and its implications.
Meanwhile, the Tooling team rolled out critical infrastructure updates:
- Official support for the IOTA 2.0 Testnet in the Explorer
- Launch of Firefly Canary, a wallet version tailored for testing on IOTA 2.0
- Early development of tools for L1 smart contract deployment and monitoring
These improvements ensure that both developers and users have reliable, intuitive access to IOTA’s evolving ecosystem.
Advancing Digital Identity Solutions
The Identity team released two major updates to the IOTA Identity Framework:
- Version 1.2: Refined core functionality and improved stability
- Version 1.3: Introduced privacy-preserving selective disclosure credentials in collaboration with the LINKS Foundation and added an ECDSA verifier developed with Filancore
These upgrades enhance trust and compliance in digital identity use cases, particularly in regulated sectors like finance and government services. The team has also begun evaluating compatibility between identity solutions and L1 smart contracts—paving the way for self-sovereign identity (SSI) integration at the protocol level.
Organizational changes placed the Identity team under the newly formed Technology Adoption department, reflecting its growing importance in enterprise deployments.
Technology Adoption: Bridging Innovation and Industry
The Technology Adoption (TA) Department, established earlier this year, is now central to IOTA’s go-to-market strategy. Its mission is to drive B2B and institutional adoption across high-impact sectors such as supply chain, asset tokenization, and circular economy initiatives.
Strategic Projects and Partnerships
One of the department’s key achievements was concluding participation in the European Blockchain Pre-Commercial Procurement (EBSI PCP) project. While no official "winner" was declared, IOTA received positive individual feedback from the European Commission. The TA team is working to publish all deliverables and will continue collaborating with the EC and Europeum-EDIC on future digital trust frameworks.
In June, IOTA joined a joint workshop in Brussels focused on product authenticity and IP rights management using DLT—demonstrating leadership in regulatory-aligned innovation.
SUSEE: Securing Smart Energy Grids
The SUSEE project ("Secure Sensoring Platforms for Smart Energy Grids") advanced its field-readiness this quarter:
- Improved reliability of node services
- Implemented failover mechanisms using redundant primary/secondary nodes
- Enhanced data synchronization and validation for smart-meter messages
- Upgraded user interfaces for better data visualization
With documentation finalized, SUSEE will continue operating beyond IOTA Foundation’s active involvement, ensuring secure, tamper-proof transmission of energy data via the IOTA Tangle.
Trade & Logistics Information Pipeline (TLIP): Transforming Global Trade
The TLIP initiative continues to gain momentum as a digital infrastructure for cross-border trade. In Q2:
- A pilot study on EU-UK poultry shipments advanced efforts to streamline customs processes
- In Kenya, workshops with the Kenya Revenue Authority focused on integrating TLIP for export certification and border agency coordination
- TLIP was featured at the WTO Global Review of Aid for Trade, highlighting DLT’s role in boosting trade efficiency in developing economies
These developments position TLIP as a scalable solution for transparent, real-time data sharing in global logistics.
Ecosystem Growth: Fostering Innovation and Community
The Ecosystem team has been instrumental in nurturing a vibrant builder community around IOTA EVM.
Since the June 2024 launch:
- Over 30 dApps are preparing deployment
- Strategic integrations with cross-chain platforms like LayerZero and Stargate, and oracle providers such as Pyth, have strengthened interoperability
- The IOTAGrants program—managed by the IOTA Ecosystem DLT Foundation—has approved 25 projects and committed $2.74 million in funding
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Eight episodes of BuildSphere, a live interview series on X-Spaces, showcased ecosystem projects and received strong community engagement. The EVM launch party further energized participation, with exclusive merchandise distributed to attendees.
Governance activity remains robust:
- Two proposals to appoint leadership for Tangle Treasury DAO and Shimmer Community Treasury DAO are currently under vote
- A new proposal to accelerate IOTA EVM growth is under community discussion
Legal & Regulatory Affairs: Shaping Policy with Innovation
IOTA’s Web3 Identification solution, developed with partners like walt.id, IDnow, Bloom, and HAVN, was selected for the European Blockchain Sandbox—a prestigious recognition of its compliance-ready design.
The Legal team also contributed to the European Commission’s workshop on Asset Tokenisation in Finance, advocating for standards that promote interoperability and regulatory clarity.
Additionally, a streamlined legal process for grant agreements has been implemented, ensuring compliance while supporting rapid innovation through the IOTAGrants program.
Frequently Asked Questions (FAQ)
Q: What is the significance of the IOTA 2.0 Testnet?
A: The IOTA 2.0 Testnet replaces the Coordinator with PoS consensus, enabling full decentralization. It introduces Mana for resource management and paves the way for L1 smart contracts.
Q: How does IOTA EVM benefit developers?
A: IOTA EVM allows Ethereum-compatible smart contract development using familiar tools like Solidity and MetaMask, making it easier for Web3 developers to build on IOTA.
Q: What is TLIP and who uses it?
A: TLIP (Trade and Logistics Information Pipeline) is a DLT-based data-sharing platform used by governments and trade agencies to digitize cross-border processes, such as customs clearance and export certification.
Q: Is IOTA focusing more on enterprise use now?
A: Yes. With the creation of the Technology Adoption department and participation in EU-level projects, IOTA is actively driving B2B and institutional adoption in areas like digital identity and supply chain.
Q: How can developers get funding for IOTA projects?
A: Through the IOTAGrants program, which has already funded 25 projects with $2.74 million in support for innovative dApps and infrastructure tools.
Q: What role does governance play in IOTA’s ecosystem?
A: Governance enables community-driven decision-making through on-chain voting for treasury leadership and strategic initiatives, fostering transparency and decentralization.
Looking ahead, the focus will shift from foundational development to real-world application. With core technologies now proven at scale, IOTA is poised to expand its footprint across industries—driving sustainable innovation through decentralized infrastructure.
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