For IOTA, the crypto year 2022 was sobering. Technological development faltered and the price curve collapsed. But the side project Shimmer (SMR) raises hopes. Can the trend reversal succeed in 2023?
At the start of the crypto year 2022, the world still looked good at IOTA. The newly introduced staking for the side projects Shimmer (SMR) and Assembly (ASMB) has created a certain spirit of optimism and with a price level of around 1.40 USD, IOTA has started well on January 1, 2022. But twelve months later, IOTA crashed to around $0.17. Almost 90% lower for IOTA’s price curve in the last twelve months, even hardcore fans can’t talk about that.
Of course, general market movements must also be taken into account for the massive price losses at IOTA. When the ecosystem crash around Terra (LUNA) rocked the crypto industry in May, IOTA was just as affected as the bankruptcy of FTX in November. But key cryptocurrency Bitcoin (BTC) weathered the turbulence of 2022 with a minus of 66% and Ethereum (ETH) also fared significantly better than IOTA with a minus of 70%. What is behind the crisis at IOTA and – supported by the side project Shimmer (SMR) – maybe the trend reversal will succeed?
Permanent theme: IOTA and the desired decentralization
In the crypto scene, IOTA is often mocked with the word “soon”. The central theme of decentralization shows why this is so. In 2021, IOTA managed to upgrade its network to version 1.5 by upgrading Chrysalis. The next big step was then on the agenda for 2022, with “Coordicide” the deactivation of the central coordinator, requested since 2019, should take place and a decentralized IOTA 2.0 should become a reality. In March 2022, IOTA developer Hans Moog spoke of a “breakthrough” in the preparations.
But what critic Buffy predicted has come true: IOTA will also enter the new year 2023 as a centrally organized network, the foundation-controlled coordinator is able to intervene in transactions. IOTA therefore still does not meet the decentralization criterion, which is important for areas of application such as decentralized finance (DeFi). The belief that an IOTA 2.0 will be launched in 2023 is seriously compromised – it has once again proven true that the IOTA Foundation’s progress reports on the decentralization challenge should not be taken at face value. letter.
Shimmer (SMR) and Assembly (ASMB) – the IOTA ecosystem is growing
The balance sheet is split for the side projects Shimmer (SMR) and Assembly (ASMB), launched in 2021. They are supposed to expand the IOTA ecosystem and at least the staking of these projects has worked. But contrary to the announcements of IOTA boss Dominik Schiener, only Shimmer has managed to launch its mainnet in 2022. At Assembly, on the other hand, there is strong evidence that the planned venture capital has not materialized and ASMB may never go public.
Shimmer has thus moved up the priority list at IOTA, and SMR’s stock market debut has shown a pleasantly high level of interest. Calls from the community to examine possible cliques in the distribution of Shimmer tokens went unanswered by the head of the Schiener foundation. It is now clear that a decentralized IOTA network would first be tested at Shimmer before replacing the centralized Tanglenet.
EU flagship project EBSI becomes encouragement for IOTA
In its external presentation, the IOTA Foundation likes to emphasize its cooperation with universities, industry associations, industrial companies and publicly funded projects. Impulses for the adoption of IOTA in practical use cases are expected from here. At least with EBSI, an EU flagship project for blockchain solutions, IOTA scored.
In November, the IOTA Foundation learned that it was one of the three participants in the final phase of the EBSI. There are now good opportunities for IOTA to come into play as a technological basis for EU solutions in areas such as education, climate protection or healthcare. The EU is apparently also willing to accept the continued centralized structure of IOTA Tanglenet.
The financial endowment of the IOTA Foundation worries
In the past, there have been repeated questions as to whether the medium and long-term funding of the IOTA Foundation is secured. The IOTA Foundation angrily dismissed doubts about this. But in the summer of 2022, the IOTA Foundation had to announce an extensive restructuring, which also included massive layoffs. Shortly before the end of the year, new arithmetic games are circulating, which raises fears that the IOTA Foundation is bleeding financially.
Significant unrest has also caused indications that the IOTA Foundation may be involved in insider trading. The discussions alone show how important transparent financial reporting by the IOTA Foundation would be. Because if money were to run out for the official IOTA developers, it would probably end up with crucial goals such as decentralization and ecosystem expansion.
IOTA Outlook 2023: ironing out mistakes, creating new insights
Investors can already see from the performance of their IOTA assets that 2022 was not a good year. In addition to the losses in the overall market, IOTA has had problems at home, the nervousness is palpable. Measured in terms of market capitalization, IOTA has lost a lot of ground against its competitors in 2022 and only occupies a place of around 70 among the most capitalized cryptocurrencies. Shimmer (SMR) alone as an ecosystem extension compatible with testing will not be able to reverse the trend. Even at IOTA itself, the pressure is high to change course. IOTA boss Dominik Schiener faces a Herculean task in 2023.