IoTeX is an innovative blockchain platform. Since its launch in 2019, the IOTX token has been its core currency, balancing the incentive mechanism between validators (Delegates), Dapp developers and users. This article will deeply analyze the functions of the IOTX token, its new role in IoTeX 2.0, and future development prospects.
Basic functions of the IOTX token
Validator rewards
On the IoTeX platform, validators earn IOTX rewards by staking and verifying transactions. This mechanism not only ensures the security of the network, but also incentivizes more participants to join the network governance.
Transaction fees
Developers and users need to pay IOTX as fees when conducting transactions and interacting with smart contracts. This mechanism ensures the efficient operation of the network and also provides practical application scenarios for the IOTX token.
Network governance
IOTX token holders can participate in network governance by staking tokens, vote for the best validators in their minds, and receive IOTX rewards for doing so. This mechanism allows the entire community to collectively decide the direction of the network.
IoTeX 2.0: Expanded Token Economics
As IoTeX evolves from a simple L1 blockchain to a modular platform, the economics of the IOTX token will expand to align with the vision of IoTeX 2.0. This includes introducing new utility for the IOTX token and integrating it into IoTeX 2.0’s new technology offerings.
Balancing Inflation and Deflation
A key goal of IoTeX 2.0 is to balance inflationary staking rewards and deflationary token burns through platform usage. Additionally, we are working to incentivize DePIN Dapps and L2s to leverage our modular infrastructure. The upgraded token economics not only introduces new utility and value by connecting W3bstream, ioID, ioDDK, and other DIMs, but also maintains the stability of token supply through a balanced inflation and deflation mechanism.
New Utility
The IOTX token will be used throughout the IoTeX 2.0 infrastructure and ecosystem, expanding from existing L1 utility to new infrastructure modules.
New features of IOTX tokens in IoTeX 2.0
Existing L1 utility
IOTX tokens will still be used to reward validators, validate L1 transactions, and participate in consensus. In addition, token holders will participate in governance by staking IOTX, voting for their favorite validators, and being rewarded with IOTX for doing so. IOTX tokens will continue to serve as the native currency of the IoTeX L1 blockchain, and in IoTeX 2.0, users and developers will pay IOTX fees to deploy and use Dapps.
New L1 utility
In IoTeX 2.0, device owners will burn IOTX to register their devices and obtain ioIDs, thereby establishing a trusted anchor to participate in DePINs. Additionally, IoTeX L1 will utilize a DAO that allows token holders to vote on the allocation of network incentives. This is intended to drive the onboarding of new devices, DePINs, Dapps, and users, thereby increasing the utility of IOTX through burning, staking, and spending.
IOTX Re-staking (Modular Security Pools)
IoTeX 2.0 will allow users to re-use their staked IOTX by re-staking or re-pledge their IOTX to Modular Security Pools (MSPs). MSPs are designed to extend the security of the IoTeX L1 blockchain to the DePIN Infrastructure Modules (DIMs) integrated with IoTeX 2.0. DIM builders can use MSPs to incentivize IOTX stakers to allocate their re-staked IOTX to provide security to their solutions. This introduces a new economic model involving staked IOTX.
Future Outlook for IoTeX 2.0
As IoTeX’s modular infrastructure gains more and more adoption, the IOTX token will gain new value as the currency of the IoTeX 2.0 network. We can foresee that the IOTX token will play an increasingly important role in the future blockchain ecosystem, not only providing support on a technical level, but also playing a key role in economic incentives and governance mechanisms.
The launch of IoTeX 2.0 marks a new milestone. The expanded functionality and new economics of the IOTX token will bring more opportunities and value to users, developers, and validators. Through continuous innovation and development, IoTeX will continue to lead the development of blockchain technology and contribute to building a more secure, efficient, and decentralized future.
In short, the IOTX token is not only the core currency of the IoTeX platform, but will also play a greater role in the future IoTeX 2.0. Through continuous expansion and innovation, the IOTX token will bring new opportunities and value to the entire blockchain ecosystem.