Tezos

Tezos (XTZ) is a cryptocurrency and a decentralized computing platform that aims to overcome fundamental hurdles to blockchain adoption for assets and applications. The Tezos blockchain network, which is supported by a worldwide community of validators, researchers, and builders, seeks to deploy complicated smart contracts for asset settlement and decentralized apps (DApps). Tezos aims to make it simple for developers to create advanced tools and products while new users may experience NFTs, DeFi, gaming, and other features across hundreds of Tezos-powered DApps. The network aims to enable high-value use cases both at protocol and application layers facilitating formal verification, a practice popularly used in mission-critical enterprises, spanning from nuclear and aviation to semiconductors and more.

According to the whitepaper, Tezos is described as a self-amending crypto ledger. Tezos claims this self-amendment and upgradability as one of its unique features. Through an in-protocol amendment process, Tezos upgrades itself without the requirement of a hard fork. A fork occurs when a community modifies a blockchain’s core set of rules or protocols, whereas a hard fork drastically changes the code without backward compatibility. As a result of performing upgrades in a self-amending manner, Tezos seeks to speed innovation, minimize the possibility of contentious splits, and promote long-term coordination of stakeholders within the Tezos community. Simply, the network evolves by modifying its own code.

According to the website, the Tezos platform is made to adjust, adapt, and add features through on-chain upgrades. The platform also aims to provide certain features for its users:

Tezos, powered by a decentralized network of nodes or participants, provides the computing resources required to ensure the network’s availability and integrity. Accordingly, Tezos’s proof-of-stake-based technique, known as baking, is used to achieve consensus among blockchain participants. This approach seeks to allow every stakeholder to participate in consensus without giving up ownership of their tokens through voluntary delegation. Also, proof of stake aims to enhance scalability and promote incentive alignment. 

Tezos, as an energy-efficient blockchain, intends to distinguish itself as a component of humanity’s digital future in the following ways:

The native currency of Tezos is tez or XTZ. According to the official document, Tezos seeks to revolutionize retaining and exchanging value in a digitally interconnected economy. The XTZ coin seeks to have multiple use cases from enterprise to government and DeFi to NFTs. The coin also aims to allow asset tokenization, which is the process of tokenizing physical and real-world assets such as real estate or luxury items like collectibles, art, and more onto a blockchain. 

The XTZ token also aims to reward developers; any developer may propose a protocol update with an invoice attached. The community of “bakers,” who are validators in Tezos, vote on the protocol upgrade using XTZ’s formal built-in governance system. In simple terms, Tezos’s on-chain governance mechanism seeks to allow token holders to engage in the amendment process by selecting a baker to accept or reject the update.

Tezos was one of the major proof-of-stake networks that launched in June 2018, cofounded by Arthur Breitman. Breitman is a Tezos Foundation council member and an early Tezos architect. He formerly worked as a research engineer at Google X and Waymo. The Tezos Foundation is one of several organizations in the Tezos ecosystem that work together to support the Tezos protocol and ecosystem. The Tezos Foundation’s mission is to promote the Tezos protocol through grants and other forms of capital deployment. 

Since Tezos is not a company, it does not have a core team or employees. Tezos is an open-source software project and blockchain to which anybody may contribute code. Further, Tezos launched its position paper in August 2014 and the original whitepaper in September 2014.

As mentioned earlier, the act of authenticating and publishing blocks to the Tezos blockchain is referred to as “baking.” Instead of miners, bakers in the Tezos network are an important part of this proof-of-stake consensus system. They ensure that all transactions in a block are valid, the sequence of transactions is agreed upon, and no double-spending occurs. Consequently, a baker engages in a proof of stake to bake blocks, which requires a minimum of 8,000 XTZ (1 roll). The more XTZ rolls a baker possesses, the better their chances of earning baking blocks and receiving baking incentives.

Additionally, users who do not own 8,000 XTZ or do not want to build up computational power can bake blocks or delegate the coins to bakers. Through delegation, coin holders lend their coins to a baker (delegate), which increases the baker’s chances of being chosen to bake and endorse blocks. Practically, bakers split the additional revenue created by delegated tokens with the coin holder. It is important to note that delegation does not transfer the ownership of coins, so the baker cannot use or control the XTZ delegated to it, which guarantees that bakers cannot appropriate delegators’ funds.

There is no hard cap on the maximum supply of XTZ tokens. Currently, Tezos reports a total supply of over 900 million XTZ.