IOTA EVM: Liquidity Is Artificially Increased by “Unclaimed Tokens”

In August, IOTA decided to use “unclaimed tokens” to increase liquidity in the EVM. The first funds are now flowing and the IOTA EVM has broken the $10 million TVL mark.

Rescue attempt for the IOTA EVM: The Ethereum Virtual Machine was only activated as a standard module of the crypto industry on IOTA in June, but activities and capital inflows fell far short of expectations.

The IOTA Foundation then proposed using so-called “unclaimed tokens” to build up liquidity on the EVM. This controversial plan was approved at the beginning of August and now almost 150 million IOTA, currently worth around $24 million, have been transferred to the EVM. IOTAPoet draws attention to this via X.

It is still unclear which IOTA projects will benefit from the cash injection

Data from DeFiLlama shows that TVL for the IOTA EVM has increased by almost $3 million since yesterday, breaking the $10 million mark for the first time. Apparently, larger IOTA amounts were widely invested in projects such as the credit services Deepr and IOLEND, and the decentralized crypto exchanges (DEX) MagicSea and WAGMI also saw a significant boost in liquidity.

cyberPerp, a DEX specializing in derivatives, announced a liquidity injection via X that is apparently in the order of $400,000. But it is also a fact that there has been no growth on the IOTA EVM in recent months. The number of daily active addresses is relatively constant at around 300 and there are hardly any new users.

IOTA Foundation boss Dominik Schiener has repeatedly stated that it is his strategic goal to score points in the RWA (Real World Assets) sector and its tokenization. In March, Schiener hinted at a cooperation between IOTA and the world’s largest asset manager BlackRock, which Moon on X reminds us of. But concrete information remains in short supply, Schiener sees IOTA initiatives in the United Arab Emirates as a launch pad.

Conclusion: New hopes for the IOTA EVM

IOTA’s price curve rose by a good 2 percent following the news that the liquidity plan for the EVM had been put into action. With prices of just over $0.14, IOTA is still 97 percent behind its all-time high from 2017. IOTA now ranks around 50th in the list of the most capitalized EVMs in the crypto industry.

In theory, the targeted increase in liquidity in the IOTA EVM should lead to external investors discovering it for themselves and bringing in capital. It will be important to see whether this IOTA plan works. Since the inflation hammer in autumn 2023 at the latest, the crypto scene’s trust in IOTA has shrunk considerably. Critics also see the use of “unclaimed tokens” as a dilution of the value of the IOTA in circulation.

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(Featured image by geralt via Pixabay)

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