What is Tezos? Project overview
Tezos is a smart contract and decentralized applications (DApps) blockchain platform, with protocol written in the OCaml programming language.
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According to current cryptocurrency standards, Tezos is quite an old blockchain. The protocol's alpha version was launched in 2017 prior to the debut of Solana, Aptos, Polygon, and other well-known networks.
We decided to analyze the Tezos blockchain in detail so that you can enjoy all of its benefits and grasp the general algorithm of work.
Launch of $232 million protocol and ICO
Tezos was founded by Arthur Breitman, a well-known French mathematician and former employee of investment giants Goldman Sachs and Morgan Stanley. Kathleen, Arthur's wife, joined the development of the blockchain in 2013. They later released a white paper in Sept. 2014 that detailed more specifics about the project.
In 2015, the Breitmans established a company called Dynamic Ledger Solutions (DLS), which wrote the initial code for Tezos a year later. Due to Swiss legislation, in order to further develop Tezos they had to create a non-profit Tezos Foundation, which would deal with financial issues, while DLS owned the copyright.
As part of the Tezos initial coin offering (ICO) launched in 2017, $232 million of investments were raised. The company has sold over 500 million tokens with an average price of $0.47 per coin.
Tezos Blockchain ICO Details (cryptorank.io)
Blockchain structure and operation algorithm
Blockchain structure and operation algorithm
Tezos relies on a Liquid Proof-of-Stake (LPoS) consensus algorithm where a randomly selected delegate creates new blocks, and the rest of the participants confirm it.
In Tezos people who create blocks are called “bakers” (think of them as “miners” in Bitcoin), respectively, the mining process is called ”baking.” Anyone who has at least 8,000 TEZ coins (XTZ – exchange ticker) can become a baker. Also, users can delegate their tokens, while the baker loses the right to spend them.
A scaling system is integrated into the blockchain: the more tokens a validator has and the longer he works, so the greater his chance to form and add a block.
Currently, there are 144 active backers on the Tezos network, but not all of them actually confirm transactions.
List of active bakers on Tezos (tzkt.io)
OCaml programming language was used for the very foundations of Tezos, while smart contracts are written in Michelson. A feature of these languages is a built-in formal verification that ensures the network security and identifies any inconsistencies with the code.
A growing network
A growing network
Tezos is not a static blockchain. Its modification technology allows the Tezos community to change any system configuration, as the crypto industry “evolves”.
This is what bakers do. Each of them can vote for future network upgrades and rules. Voting and integration of innovations is sectioned into four periods:
· proposal period;
· exploration vote period;
· testing period;
· promotion vote period.
One Tezos update can take up to three months to complete its full cycle. This is quite quick, in light of the fact that some blockchains have been preparing for such implementations for several years (for example, Ethereum transition to PoS).
Any user can submit a proposal. In such a case 80% of voting bakers must support the proposal for it to progress.
Current proposals and voting on Tezos (tzkt.io)
Ecosystem and applications on Tezos
Tezos can be used for a variety of purposes, including the DeFi sector, NFT, marketplaces, DEX exchanges, lending protocols, stablecoins, and platforms for automated smart contracts. The full list of available dApps can be found on the Tezosprojects website. Additionally, you can view all the tokens associated with the blockchain if you sort projects by the Tezos Ecosystem tag on the Coinmarketcap and Coingecko websites.
Tezos Ecosystem (tezosprojects.com)
The Tezos Foundation offers grants to startups and blockchain developers who need funding to launch their own projects.
XTZ token and statistics
The native cryptocurrency for the Tezos blockchain is called Tez, but on the exchanges it has the ticker XTZ. Because of this some users get confused.
XTZ was launched in the market in July 2018 at an initial price of $2. The token's all-time high was $8.35 on May 10, 2021. XTZ is now available on all major cryptocurrency exchanges. Tezos currently ranks 47th in Coinmarketcap's ranking of cryptocurrency projects with a price of $0.92 per token and a market capitalization of $905 million.
XTZ token chart
Fascinating Facts
· Tezos has an unlimited supply and the annual inflation is 5%. However, if desired, this thing can also be changed.
· The Tezos project was Arthur Breitman’s side venture while working at Morgan Stanley as a staff mathematician. Later the Financial Industry Regulatory Authority (FINRA) fined Breitman $20,000 for such violation.
· After the ICO, Dynamic Ledger Solutions (DLS) and the Tezos Foundation got into a dispute, which led to a delay in the distribution of tokens among investors. Also, the American regulator suspected an unregistered securities sale. As a result, the company was fined $25 million by the SEC, and many of the fund's employees left their posts;
· In the Whitepaper, Breitmans predicted many intriguing things, such as the issue with BTC's lack of flexibility, the inability of creating tokens and dApps, as well as a significant number of “one-day tokens”;
· The platform’s name was suggested by artificial intelligence. The algorithm created by Arthur Breitman picked up the most unclaimed English domain on the Internet;
· Tezos has recently become a partner and sponsor of the Manchester United football team.
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