IOTA (CRYPTO:IOTA) has launched its new testnet, IOTA 2.0, transitioning from Proof of Work (PoW) to Proof of Stake (PoS) to enhance scalability, security, and eco-friendliness.

This move aims to decentralise the network further, eliminating the central entity previously managing consensus.

The IOTA 2.0 testnet is designed to attract companies focused on green solutions and promises improved network security crucial for sectors like finance, healthcare, and smart cities.

While developers laud its potential to challenge Ethereum (CRYPTO:ETH) and address the blockchain trilemma, the testnet remains a development platform without real-world value and may experience occasional reboots.

Following the announcement, IOTA's native token saw a brief rally but returned to its previous value of $0.21.