IOTA and Shimmer: Laying the Groundwork for Growth
Year in Review, Year in Preview
In 2023, the introduction of ShimmerEVM, a multi-chain solution enabling interaction among EVM-compatible smart contracts, marked a pivotal moment. The ShimmerEVM testnet, launched in March, recorded remarkable activity, while the September release resulted in a significant surge in Total Value Locked (TVL) and the number of active projects in the ecosystem. The groundwork for growth included the Stardust upgrade, introducing next year’s IOTA 2.0, and involvement in shaping regulatory frameworks. Looking ahead to 2024, plans involve a focus on real-world asset tokenization, positioning IOTA and Shimmer as leaders in emerging digital economies.
Join us in revisiting the milestones that revolutionized our technology and galvanized our ecosystem in 2023. Taking center stage is ShimmerEVM, the first permissionless multi-chain solution that redefines the possibilities for our ecosystem. As we reflect on the testnet’s remarkable success and the bustling Shimmer ecosystem, we’ll also look at what 2024 holds.
This year marked a significant chapter for IOTA with the introduction of ShimmerEVM, a multi-chain solution that allows different EVM-compatible smart contracts and decentralized applications (DApps) to interact with each other across different chains. Put simply, it brings DeFi to the IOTA ecosystem. Let’s take a look at the impact ShimmerEVM has had on our vibrant ecosystem.
Testnet and milestones
In March, we launched the ShimmerEVM testnet, allowing our community to explore its potential. Within a month, the testnet recorded over one million transactions, 38,000 wallet addresses, and more than 2,200 deployed smart contracts.
Testing went up a notch in May with the Treasures of Shimmer campaign organized by the Tangle Ecosystem Association (TEA). A battle for activity between dApps saw over 10 million transactions added to the testnet and a peak of 1.8 million daily transactions: check out our campaign review blog post for more details and external coverage in, for example, Times Tabloid, ETH News, and Crypto News.
ShimmerEVM’s impact on IOTA’s ecosystem
The release of ShimmerEVM in September had a massive impact on the IOTA ecosystem. “IOTA’s Shimmer TVL Soars 4x Amid Surging Ecosystem Adoption” announced ethnews.com just over two weeks after the ShimmerEVM launch. Countless projects that had been itching to go public on Shimmer could finally do so.
The September release led to a surge in Total Value Locked (TVL), reaching $4.8 million in October, signifying a 95.92% increase from the previous month. Defillama now tracks five Shimmer projects, with Accumulator, the first yield aggregator on the EVM, recently integrated as well. ShimmerEVM’s ShimmerSea TVL is notably outpacing other decentralized exchanges on the platform. As of November, the ecosystem now boasts 40 active projects, showcasing its dynamic and expanding nature.
Watch members of the IOTA Foundation and the community celebrate 2023.
The integration of ShimmerEVM with LayerZero in December extended its reach in the broader crypto space, fostering seamless cross-chain communication. Another catalyst for activity on Shimmer is the Bloom Wallet, launched in November by former members of IOTA’s Firefly Wallet team and which facilitates easy asset transfer between Shimmer and ShimmerEVM.
Setting the stage for global growth
ShimmerEVM wasn’t the only groundwork laid by the IOTA Foundation this year for 2024.
We created an unprecedented amount of content to introduce IOTA 2.0, our protocol upgrade that will take place next year. Across blog posts, Wiki articles, videos, and presentations, the introduction covers all technical aspects of the upgrade as well as the vision behind the upgrade. Check out the index for this series of content here.
In October, the Stardust upgrade on the IOTA network introduced a tokenization framework to the IOTA mainnet – so anyone can mint tokenized assets on L1 – and enabled the anchoring of Layer 2 smart contract chains and seamless cross-chain transfer of assets to the network through the IOTA Chains framework. This upgrade, combined with the launch of IOTA Identity 1.0 on the IOTA mainnet in November, marked a significant step toward bridging the gap between digital and real-world identities.
To fully focus on IOTA Chains and align with advancements in the crypto space, the difficult decision was taken to discontinue the Assembly project and token. This was connected with a one-off increase in the IOTA token supply. You can read more about the context of this decision here.The introduction of the IOTA Ecosystem DLT Foundation, registered with Abu Dhabi Global Market (ADGM), is a crucial step towards real-world adoption and regulatory compliance. With around $160 million in IOTA tokens, the Foundation aims to grow the IOTA ecosystem in the Middle East, Africa, and Asia. (You can read more about the strategy for the IOTA Ecosystem DLT Foundation in this blog post).
Shaping the rulebook
Regulatory compliance is a major prerequisite for growth. 2023 saw the adoption of the Markets in Crypto-Assets Regulation (MiCA) in the EU. This was a highly anticipated step for the European crypto industry and will provide much-needed clarity to industry participants. Together with MiCA, the EU also introduced the Transfer of Funds Regulation, which implements the travel rule for crypto-asset transactions, and several other regulatory developments, including tax, AI, and anti-money laundering.
Throughout the year, the IOTA Foundation was closely involved in promoting appropriate, new regulatory frameworks for the crypto-asset industry and aligning regulatory approaches across jurisdictions. We also organized a series of roundtables, highlighting IOTA ecosystem projects and regulatory challenges in the industry, particularly in DeFi.
We remain committed to ongoing regulatory advocacy efforts and will continue to actively champion the DLT/blockchain industry in the years ahead.
Our next quarterly progress report will give more details about developments across all departments at the IOTA Foundation. You can catch up on the most recent report here.
Looking ahead to 2024
Other plans for the future include the introduction of L2 EVM-compatible smart contracts to the IOTA mainnet, the launch of the IOTA 2.0 testnet and its integration with Shimmer and then the IOA mainnet, and the integration of smart contracts directly into IOTA’s base layer (L1). The focus on real-world asset (RWA) tokenization, backed by regulatory compliance and partnerships, positions IOTA and Shimmer as leaders in unlocking new opportunities in emerging digital economies.