Is IOTA Now Fully Decentralized with the Stardust Upgrade? An In-Depth Look at Coordicide and the Bright Future

On Tuesday, September 12, the IOTA protocol made major headlines after it unveiled the plans to upgrade the IOTA mainnet. The announcement involves the degradation of the IOTA mainnet Coordinator to a decentralized permission Validator Committee.

The Committee comprises multiple validators running on different host providers and locations. In addition to increasing network uptime and stability, it also provides censorship resistance by allowing external entities to be part of the Validator Committee.

Blockchain researcher Collin Brown said that the Stardust upgrade brings a major shift with the Coordinator transformed into the Validator Committee.

🌟🛰️ "IOTA’s Future Shines Brighter! 💫🚀 The #Stardust upgrade brings a cosmic shift as the Coordinator steps aside for a Validator Committee. 🌐🔒 Tested and ready on @shimmernet, this is our next step towards Coordicide! 🌌🙌

Retweet and like #IOTA and #Shimmer fans! 👇👇👇

— Collin Brown (@CollinBrownXRP) September 12, 2023

The forthcoming upgrade, known as Stardust, will introduce several fundamental alterations to the IOTA network. This includes the replacement of the Coordinator with the Validator Committee. To ensure the smooth deployment and operation of the Validator Committee, the IOTA protocol has already implemented and tested the new protocol on the ShimmerNet. It’s important to emphasize that the mainnet, is not the permanent home for the Validator Committee, as its true purpose aligns with Coordicide.

Addressing the challenges With IOTA Coordinator

The current Coordinator functions as an arbiter within the IOTA network, responsible for validating transactions in periodic batches. This is achieved by issuing milestones that nodes accept as confirmation for the transactions they’ve verified. While this approach enhances security, it also means that the Coordinator has the potential to hinder transactions if milestones are set in specific ways. Furthermore, if the Coordinator becomes inaccessible, the accepted confirmation of transactions is lost, causing the network to halt processing value transactions until the Coordinator resumes its functions.

To address these challenges, we are implementing an upgrade, transitioning from the current Coordinator to a decentralized Validator Committee. This change eliminates the reliance on a single Coordinator managed by the IOTA Foundation for milestone placement. Instead, multiple validators collaborate as a committee, employing an off-chain Byzantine Fault Tolerant (BFT) consensus mechanism to determine the placement of the next milestone. Each validator proposes the parents to be referenced in the milestone, explains IOTA in its blog post.

This upgrade offers several advantages. It ensures censorship resistance, as no single entity or machine is solely responsible for validating transactions in the network. Additionally, it enhances network uptime, as the committee can continue producing milestones even if a few validators experience downtime due to factors like network outages or misbehavior.

New Opportunities for IOTA

IOTA is still not receiving full appreciation for its role as its core smart contract network, ShimmerNet, remains under heavy construction. However, there is evidence that IOTA is taking proactive steps to enhance its market share in a Web3.0 eco, currently dominated by the likes of Ethereum (ETH), Solana (SOL), BNB Chain, and Cardano (ADA), among others.

The opportunities present in the IOTA network at this time have contributed to sustaining its price, which stands at $0.1628. This reflects a mild surge of 0.50% at the time of writing.