Skip to main content

State Management and Anchoring

TL;DR;​

  • Introduction: In IOTA Smart Contracts, 'state' represents the chain's current status, including data and digital assets, updated via blockchain blocks.
  • Digital Assets: Digital assets in IOTA are managed by Layer 1 addresses, with each smart contract chain having a unique address to act as a custodian.
  • Data: The data state comprises key/value pairs managed outside the UTXO ledger by validator nodes, ensuring data consistency and traceability.
  • Anchoring: The anchoring process embeds the data state hash into the L1 ledger, creating a tamper-proof record and ensuring a globally consistent state.

Introduction​

In IOTA Smart Contracts, the 'state' represents the current status of the chain, including its data and digital assets. This state is updated through blocks that form an immutable blockchain. Each block contains changes or mutations, leading to a new state.

Digital Assets​

Digital assets in IOTA are controlled by addresses on the Layer 1 (L1) IOTA UTXO ledger. Each smart contract chain has a unique L1 address acting as a custodian for these assets, which include base tokens, native tokens, and NFTs. These assets are consolidated within the chain's account, and their movements are tracked as part of the chain's state changes.

Data​

The data state of an IOTA chain comprises key/value pairs maintained outside the UTXO ledger in a distributed database managed by validator nodes. This database contains the 'solid state', while the 'virtual state' is an in-memory collection during smart contract execution. The data state is defined by its hash, timestamp, and index, ensuring consistency and traceability of changes.

Anchoring​

Anchoring is the process of embedding the hash of the data state into a state UTXO on the L1 ledger, providing a tamper-proof record. This mechanism ensures that there is global consensus on the chain’s state, which is both immutable and consistent. The state transition in the chain occurs via a transaction that updates both the chain's assets and the state hash, represented as a sequence of UTXOs on the L1 ledger.

Dive Deeper

You can gain a deeper understanding of on-chain digital assets, and the data state in the IOTA Smart Contracts documentation.