IOTA EVM: The next big RWA Tokenisation network?

I had heard about IOTA before, but the first time I looked deeper into it was in 2019. I was working at Oracle in Amsterdam. At that time, I was trying to position Oracle‘s Enterprise Internet of Things and Blockchain products into the German market.

As I was conducting research, I dug deeper into directed acyclic graphs (DAG). A technology that was far more performant than traditional blockchain networks. I came across IOTA which is a DAG.

This was before faster Blockchain networks hit the market, yet DAG still seems to be the more scalable distributed ledger technology (DLT) compared to most Blockchain architectures.

The Evolution of IOTA

Originally, IOTA was primarily focused on the Internet of Things (IoT), similar to how Oracle uses their private Blockchains, IOTA was primarily aimed at facilitating transactions between different connected devices in an immutable, secure way. This is also called Machine-to-Machine Communication (M2M).

However, IOTAs key differentiation compared to private Blockchains is that it does this on a public network. This enables a much deeper level of transparency and trust in these Machines.

Especially for the smart city of the future, enabling a transparent, yet secure communication gateway for machines is critical.

EVM adoption and how it can create a hyper adoption of IOTA

IOTA was first released in 2016. Since then, the network has evolved significantly on its own path towards full decentralisation.

Over the years however, IOTA has evolved to be more than just a network for IoT devices. With new significant use cases such as self sovereign identity, IOTA is aiming towards becoming the enterprise and government network of choice.

A key milestone in the project is the Ethereum Virtual Machine compatibility through its new Layer 2 addition, which is poised to not only bring a vast array of new use cases to the network, but also enable attraction of real world tokenisation projects (RWA).

EVM compatibility not only makes IOTA compatible with the large library of Ethereum Readable Contract (ERC) Tokens, it also enables projects to easily adopt IOTA.

What is RWA?

Real-world asset tokenization refers to the process of creating digital tokens on a blockchain that represent ownership of a tangible asset such as real estate, commodities, or fine art.

These tokens can be traded, bought, and sold on IOTA now, enabling greater liquidity, transparency, and accessibility to traditionally illiquid assets.

Tokenization leverages smart contracts to automate and enforce the terms of ownership and transactions, providing a secure and immutable record of asset transfers.

Why RWA and EVM go hand in hand

The Ethereum Virtual Machine (EVM) is crucial for real-world asset tokenization as it provides a robust, decentralized environment for executing smart contracts.

The IOTA EVM ensures that smart contracts operate consistently and securely across the Ethereum network, facilitating the automation of complex transaction processes.

By enabling programmable, trustless transactions, the IOTA EVM enhances the efficiency and reliability of tokenized assets, making them more attractive and practical for mainstream adoption.

What’s coming for IOTA?

Last week I had the pleasure of meeting a senior member of the IOTA leadership team to discuss RWA tokenisation.

It seems as if the network is working on a large number of new RWA projects that will soon be live on the networks new EVM layer.

They recently also announced doubling down on the UAE by hosting a series of events, including one on RWA Tokenisation in Abu Dhabi and the launch of a UAE based foundation that will invest up to $200 Million in projects building on IOTA.

A large portion of that money will likely go towards supporting RWA projects.

RWAs seem to be the next frontier of Blockchain technology, boasting some of the strongest growth numbers in the industry.

If IOTA wants to double down on RWA tokenisation, they need to attract the best projects that are able to increase the total value recorded (TVR) on the network.

At the same time, their key partnerships with companies such as Tokeny will come in handy enabling on chain compliance for RWA assets.

The key barrier for RWA adoption stays the regulatory environment revolving securities. Each jurisdiction requires a certain set of requirements to legally tokenise RWA assets.

Next week I’ll take a deeper look at the Algorand Ecosystem and the state of their RWA aspirations.

Reach out to me on x.com/oroogle