To fulfill its vision towards Digital Autonomy for Everyone, IOTA has to make sure that its ecosystem also promotes a fair playing field for participants. Ensuring the state of equilibrium in the network are the unique roles of IOTA tokens and Mana.
What are IOTA Tokens and Mana?
As a recap, IOTA tokens drive the economy of the IOTA 2.0 ecosystem. Their valuation is dictated by the fundamental economics of supply and demand.
Mana, on the other hand, is a reward gained from simply holding IOTA token or acting as a validator. It essentially serves as currency to unlock various network activities.
How to Start Acquiring IOTA Tokens and Mana?
To acquire IOTA tokens, which will subsequently reward Mana after certain conditions are met, one must first create an account within the IOTA 2.0 platform. Each account serves as the digital identity of the user, and it is decentralized in nature to ensure absolute control by the owner.
IOTA tokens can be conveniently purchased via known crypto exchanges, including:
Meanwhile, Mana, aside from getting it as a reward, can be purchased from other holders on the platform. This option can be useful for people who want to want to take an active role on the network but have insufficient Mana as well as those residing in jurisdictions with strict restrictions on cryptocurrencies.
How the Two Assets Balance the Tokenomics
IOTA token assets are finite to safeguard them against inflation, and they can also be used to acquire voting power within the consensus mechanism of the network and for governance actions. These can be staked to become a validator or delegator on the chain—ensuring network reliability and security.
The Mana generated by the token is consumed when accessing features like dealing with smart contracts, minting NFT, block creation, and exchanging funds without intermediaries. The amount of Mana consumed in one’s account depends on the network traffic, but this process means that transaction costs are effectively eliminated from the system.
IOTA keeps a barrier between these two assets to separate the rewards from the tokens. This way, the scarcity of the latter is maintained and its value is kept stable. It also prevents greed from those who are looking to tip the scale of control within the ecosystem by exploiting the rewards.
“IOTA 2.0’s tokenomics aims to overcome this negative spiral by decoupling the token from its incentives system and rewarding contributions to the system with more access to the system,” says IOTA in its latest blog post. “This access attracts players who want to utilize the IOTA network to its full potential, rather than those who only seek to extract profit,” it adds.