There are not very many cryptocurrencies that have stood the test of time and this is basically because they failed to evolve. Tezos is one of the few cryptocurrencies that has been explicitly designed to evolve so that it may not only survive but thrive.
So what is Tezos? How does it work? Why it is potential can become one of the top cryptocurrencies? Let’s find out below.
What is Tezos?
Tezos is a blockchain network that’s based on smart contracts, in a way that’s not too dissimilar to Ethereum. However, there’s a big difference: Tezos aims to offer infrastructure that is more advanced — meaning it can evolve and improve over time without there ever being a danger of a hard fork.
This is something that both Bitcoin and Ethereum have suffered since they were created. People who hold XTZ can vote on proposals for protocol upgrades that have been put forward by Tezos developers.
How Does Tezos Work?
Tezos uses a proof-of-stake blockchain which can process around 100 TPS. On Tezos, validators are referred to as bakers and there are currently around 370 active bakers producing Tezos blocks.
To become a baker, validators have to lock up a minimum of 8,000 XTZ which works out to around $40. This XTZ must be locked up for a minimum of 14 days. There’s no minimum XTZ stake for delegators. There is also no lock-up or unlock period. That’s why there are over 101,000 delegators on Tezos.
Tezos is smart contract compatible and Tesla’s smart contracts are written in a novel coding language called Mickelson.
Tezos governance proposal consists of five stages: proposal, exploration, testing, promotion, and adoption.
Tezos Upgrades
The governance process is called amendments and Tezos has had eight amendments.
- The first amendment is Athens, which increased the gas limit on Tezos and reduced the minimum XTZ stake for bakers from 10,000 XTZ to 8,000 XTZ.
- The second amendment was Babylon, which introduced new features to facilitate development and optimize the governance process.
- The third amendment was Carthage, which increased the gas limit on Tezos again and further improved protocol development.
- The fourth amendment was Delphi, which adjusted gas parameters and reduced storage costs for Tesla’s blockchain.
- The fifth amendment was Edo, which introduced privacy-preserving smart contracts and permissioned assets.
- The sixth amendment was Florence, which optimized gas for smart contracts and improved smart contract interoperability.
- The seventh amendment was Granada which again optimized gas fees sped up Tezos’s block time from 60 to 30 seconds.
- The most recent amendment was Hangzhou, which provided protection against transaction front-running, increased smart contract interoperability, improved blockchain storage, reduced gas fees, and increased liquidity baking.
- XTZ Tokenomics
XTZ is used for staking for governance and to pay for transaction fees.
XTZ had an initial supply of just over $763 million, nearly 80% of XTZ’s initial supply went to ICO participants half a percent went to Tezos’s early backers and contractors, 10% went to Tesla’s foundation and the remaining 10% went to dynamic ledger solutions.
XTZ allocated to ICO participants and early backers were unlocked when the Tezos mainnet went live in September 2018. XTZ’s current inflation rate is about 4.5% per year and XTZ’s supply has increased by almost 100 million XTZ.
XTZ Price Analysis
XTZ’s price at ICO was around $0.5 and this means XTZ is only up about 10x. But XTZ was purchased using BTC and ETH, so if ICO participants had simply held on to these coins instead, they’d be up by almost 20x.
XTZ is trading at $4.24 at press time and the market cap is over $3.7 billion. That’s huge growth for Tezos.
XTZ Chart | Source: Coinmarketcap
Tezos Concerns
There are two concerns about Tezos:
- The first concern about Tezos is there hasn’t been much building compared with other blockchains. Tezos uses a coding language Mickelson that doesn’t familiar to many developers. This makes it hard to build new dApps.
- The second concern about Tezos is disorganized, they don’t have the least detailed information about the project is spread out across and this makes it hard for researchers to confidently dig down into the project.
But the recent announcement that UbiSoft will be issuing its nfts on Tezos, XTZ’s price action has been there’s no denying that its institutional partnerships are pretty impressive. That’s why Tezos has a huge potential to become one of the top cryptocurrencies.
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