What is Chrysalis? Everything you need to know about IOTA’s biggest update

IOTA has witness massive increase in its stock prices in recent days. All of this is attributed to the upcoming of IOTA’s Chrysalis release which is biggest release of IOTA in terms of both technology and effort. But What is Chrysalis and what changes it is bringing to the existing ecosystem of IOTA? And Why it is resulting in surge in stock prices of IOTA tokens? Let’s start from the beginning with start of IOTA.

IOTA before Chrysalis

Incase, if you are unfamiliar with IOTA is, here is a quick introduction

IOTA is an open-source distributed ledger and cryptocurrency designed for the Internet of things (IoT). It uses a directed acyclic graph to store transactions on its ledger, motivated by a potentially higher scalability over blockchain based distributed ledgers. IOTA does not use miners to validate transactions, instead, users that issue a new transaction must approve two previous transactions and perform a small amount of proof of work. Transactions can therefore be issued without fees, facilitating microtransactions. (Source: Wikipedia)

For detailed introduction of IOTA and difference between IOTA and Blockchain read this article.

The IOTA ledger was created in 2015 by David Sønstebø, Dominik Schiener, Sergey Ivancheglo, and Serguei Popov. IOTA launched its first main-net in Auguest 2016, which used a DAG (Directed Acyclic Graph) data structure called Tangle. This main-net can be called IOTA-1.0 which was initial release of IOTA. The IOTA network was built for the Internet of Things, with tamper-proof data, feeless micro transactions and low resource requirements. The Tangle was designed to be a more equitable, democratic and secure network, where every node would directly contribute towards the security of the overall system.

IOTA entered into a market which was already very competitive due to well established cryptocurrencies like Bitcoin and Ethereum. Hence it was necessary to seek community feedback and follow continuous development. IOTA made tremendous progress in subsequent years not in just research and development but it also expanded its outreach by connecting with multiple international partners and organizations. One thing, which made IOTA unique when compared with competitors was its developer libraries. IOTA being open-source attracted a lot of developers from around the world to test and give feed back on the IOTA’s ecosystem. With all this maturing infrastructure based on research and community feedback, IOTA announced release of Chrysalis main-net.

Release of Chrysalis

In order to all the shortcomings of first main-net, IOTA has announced to release its new main-net called Chrysalis. So Chrysalis is basically a huge update in IOTA existing technological infrastructure and design. This update is expected to bring much improved security, efficiency and usability in addition to introduction of alpha versions of new features like smart contracts and tokenization.

Chrysalis (IOTA 1.5) is the main-net’s intermediate stage before Coordicide (IOTA 2.0) is complete.

In August 2020 IOTA released the first set of changes to push IOTA towards production readiness, “Chrysalis Part 1”. The release of the second and final part of Chrysalis will take place in last week of this April, with which IOTA has committed to deliver major improvements in performance, stability, reliability, and security. The Chrysalis update already contains many aspects required for the removal of the Coordinator (an application previously used by IOTA nodes to reach a consensus on which transactions were confirmed). Many breaking changes are deliberately made now with reduced adjustments remaining for the actual Coordicide event. This will allow enterprises, developers, exchanges, custodians and other partners to begin implementing their solutions with the launch of Chrysalis.

What Changes Will be Introduced by Chrysalis ?

New Developer Libraries

As a IOTA developer, most important changes for me are new developer libraries and bindings. With the new libraries IOTA decided that there should be only one reference implementation for the client libraries (for this purpose Rust language was chosen) and all other implementations should follow that reference implementation in terms of naming and functionality. Previously you had to manually provide your node URL, convert/encode your transaction, set up the options like “minimum weight magnitude” (MWM) and “depth” before you were able to use the libraries. In the new version however these are all provided by default under the assumption that you want to work with the mainnet, using the default parameters for the mainnet and that you are encoding your data in (utf-8) bytes. This results in a much easier to use library for everyone, even if you never worked with IOTA before.

Programmable Wallet

Previously every IOTA implementation that handled IOTA tokens did its own implementation using the core client libraries which is quite low-level. This was quite a bit of work and as every implementation is different, it sometimes resulted in incorrect implementations.

To remediate this issue once and for all IOTA introduced another brand new client library, wallet.rs. Wallet.rs essentially is a programmable wallet that we encourage to use for every implementation that handles IOTA tokens. This stateful library takes care of everything for you including things like synchronization and security. Wallet.rs is already integrated into the new Firefly wallet, the Command-line wallet and the testnet faucet, and allows any developer to implement an own wallet where the critical core components are handled by the library.

Firefly Wallet

Firefly is a robust wallet built by IOTA for the future use as a successor to Trinity wallet. Its uses Stronghold open source library for two main functions. Firstly, it serves an isolated memory enclave for cryptographic operations. Second, Stronghold provides an encrypted key-value store for backing up your wallet secrets and transaction history.

MANA’s Teaser

Mana is related to but also remains separate from the IOTA token. When a value transaction is processed, a quantity called mana will be “pledged” to a specified node ID. This quantity is related to the amount of IOTA moved into the transaction. The mana pledged to each node ID is stored as an extension of the ledger. The only way to gain Mana is to convince some token holder to pledge it to you. In this sense, mana is Delegated Proof of Token Ownership. Mana, therefore, provides adequate Sybil protection because it is difficult to acquire it in arbitrary amounts. Mana will be completely introduced in IOTA 2.0.

Smart Contracts (alpha)

The fundamental and most notable change of the ISCP (IOTA Smart Contracts Protocol) is the integration of a multi-chain environment, secured by the Tangle, the “Layer 1”: Subnetworks, comprised of Wasp nodes we call “committees”, can run many blockchains in parallel on top of it without losing perspective of the environments that secures IOTA digital assets, the Tangle. Each such chain, being a functional equivalent of one Ethereum blockchain, is capable of hosting many smart contracts. IOTA Smart Contracts don’t require all nodes in the network to execute all smart contracts but allow for a more flexible, sensible definition matching the smart contract owner’s requirements, which will drastically reduce cost and energy being spent, while highly increasing flexibility and not having to compromise on individual security requirements and the composability and interoperability required by dApps.

Digital Assets

IOTA’s Digital Assets framework lays the groundwork for feeless, scalable, and secure digital assets to live on the IOTA Tangle. All tokenized assets under the IOTA Digital Assets framework benefit from the same level of security, scalability and (no) fees as the native IOTA token. This makes digital assets on IOTA one of the most robust and scalable of the industry and it will lead to an explosive growth in economic value being secured and traded on the IOTA network.

IOTA Oracles

IOTA Oracles bring off-chain data to decentralized applications and smart contracts on the IOTA network. IOTA First Party Oracles do not use external data sources, nor data that was processed and made available on a DLT by a third party, but instead rely on data that has been submitted to the IOTA Tangle by the data issuer itself. In the context of IoT networks, “data issuers” would refer to the sensors themselves, without being manipulated or reformatted by anyone or anything.

New Node Softwares

IOTA has introduced two new Node softwares named Hornet and Bee. Hornet is an EDF-supported community node written in Go and has already proven itself to be a stable and performant implementation. It recently underwent a successful audit. Bee is an IOTA Node implemented by the Foundation and written in Rust.

So What Next?

Chrysalis is scheduled to be released on 28th April but it has started to show its results by showing a surges in IOTA’s stock prices. More security, efficiency and features has strengthened the position of IOTA in cryptocurrency competition to a great extent. Remember that Chrysalis is a intermediate stage before Coordicide. Chrysalis release will provide IOTA with crucial feedback and results it require to become full fledge competitor to top cryptocurrencies. Hence it will be worth keeping an eye on how Chrysalis attracts attention of enterprises and crypto market.