Counterfeiting drains an estimated $450 billion from the global economy every year, and that figure could more than double by 2030.
From fake luxury bags to imitation pharmaceuticals, the damage cuts across sectors. Conventional protection methods such as QR codes, barcodes, and holograms have lost effectiveness as counterfeiters continue to outpace them.
A new path is being explored by TokenLabs in cooperation with ObjectID and IOTA. Instead of relying on central databases, the model assigns digital identities directly to physical products. TokenLabs makes the case:
The solution isn’t better databases. It’s a new layer of trust built on decentralized identity.
Counterfeiting is a $450 billion/year problem eroding trust in global supply chains
The solution isn’t better databases. It’s a new layer of trust built on decentralized identity.
To understand this revolution, we’ve launched a new, essential course in our Academy, focused on…
— TokenLabs.network (@TokenLabsX) July 24, 2025
Tamper-Proof Product Tracking Powered by IOTA and ObjectID
At the core of this approach is ObjectID, a system that gives every product its own verifiable ID. These IDs are cryptographically tied to the official domain of the brand and a decentralized identifier (DID). Only the true domain owner can issue a valid identity, blocking fake issuers and unauthorized smart contracts.
Complementing this is IOTA, which provides a public and feeless digital ledger. The ledger doesn’t just store fixed product records—it supports real-time updates that don’t compromise the original data. This adds a second layer of transparency across the life of any item, whether it changes hands once or a hundred times.
In a recent update, CNF reported that ObjectID has moved to patent its digital identity system, structured entirely on IOTA’s distributed technology. Rather than storing data in a central location, it spreads out records, reducing risk and eliminating single points of failure.
IOTA’s ledger can lock product data permanently or allow verified updates across different stages. If any part of the data is altered without authorization, the system detects it immediately. This protects against tampering not just at retail level, but through the entire product chain.
TokenLabs Rolls Out New Education Module
Online marketplaces continue to serve as a major outlet for counterfeit goods. Fast listings and weak screening have made it nearly impossible for standard checks to keep pace. But if each product includes a verified ID, inspectors and buyers could access live, tamper-proof data before completing a transaction.
TokenLabs has introduced an education module to raise awareness about how the system works. The course explains how digital “passports” for items work, why second-hand market checks matter, and how anti-fake mechanisms function at a basic level.
Wider use of this system won’t happen automatically. Success requires cooperation across the entire supply chain, from factories to retailers. Manufacturers must tag products from the start, and customers need ways to check those tags in real time. Without such alignment, the network can’t operate at full strength.
Despite that, TokenLabs claims the combination of IOTA and ObjectID offers a path to rebuild public trust. They argue the system could allow full tracking of authenticity from production to store shelves, and close loopholes that counterfeiters exploit today.
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