Tezos (XTZ): A Smart Contract Platform with Self-Amendment and On-Chain Governance

Overview

Tezos (XTZ) is a cryptocurrency and smart contract platform created by former Morgan Stanley analyst, Arthur Breitman. It operates on a liquid proof-of-stake consensus algorithm and promotes key ideas of self-amendment and on-chain governance. As a decentralized blockchain, Tezos allows token holders to participate in the decision-making process and improve the network through voting.

Key Features

• Self-Amendment: Tezos enables the network to upgrade and adapt through a formal governance process, allowing it to evolve without the need for hard forks.
• On-Chain Governance: Token holders can delegate their voting rights to others in the network, ensuring a decentralized decision-making process.
• Generic Network Shell: Tezos utilizes a generic network shell that allows for compatibility with different transaction and consensus protocols, making it flexible and adaptable.

How Tezos Works

Tezos' source code is implemented in OCaml, a fast and functional programming language. The blockchain hosts smart contracts, similar to Ethereum, and relies on its liquid proof-of-stake consensus algorithm to strike a balance between security and decentralization. The staking process, known as "baking," involves participants making deposits and being rewarded for signing up and publishing blocks. However, bad behavior can result in the forfeiture of deposits.

Baking & Endorsing

Baking is the process of signing and publishing a new block in the Tezos chain. Bakers, who qualify as delegates with at least 8,000 XTZ, earn block rewards for baking blocks. In addition, endorsers are randomly selected to verify the last block baked and receive XTZ rewards for their endorsements.

Block Rewards & Inflation

Block rewards in Tezos are funded by protocol-defined inflation. The network aims for an annualized token growth of approximately 5.5%. Bakers and endorsers are required to post a security deposit for each block they bake or endorse and may forfeit it in case of malicious activity.

Main Network Launch and Future

After resolving corporate governance disputes, Tezos successfully launched its main network in 2018. The Tezos foundation raised $232 million in 2017 through an initial coin offering (ICO) to fund the network's development. However, the founders have acknowledged the possibility of unexpected issues due to the utilization of new blockchain technology.

Useful Resources

Official Tezos Website | CoinBureau Review of Tezos

Frequently Asked Questions (FAQ)

Q: What is Tezos (XTZ)?

Tezos is a cryptocurrency and smart contract platform that utilizes a liquid proof-of-stake consensus algorithm. It offers self-amendment and on-chain governance, allowing token holders to participate in network decision-making.

Tezos is a cryptocurrency and smart contract platform that utilizes a liquid proof-of-stake consensus algorithm. It offers self-amendment and on-chain governance, allowing token holders to participate in network decision-making.

Q: What is the staking process in Tezos?

The staking process in Tezos is called "baking." Participants, known as bakers, make deposits and are rewarded for signing up and publishing blocks on the network. However, bad behavior can result in the forfeiture of deposits.

The staking process in Tezos is called "baking." Participants, known as bakers, make deposits and are rewarded for signing up and publishing blocks on the network. However, bad behavior can result in the forfeiture of deposits.

Q: How does Tezos ensure decentralization and security?

Tezos aims to strike a balance between decentralization and security through its liquid proof-of-stake consensus algorithm. Participants who qualify as delegates, known as bakers, contribute to the network's security while being rewarded for their participation. Additionally, the network utilizes on-chain governance, allowing token holders to participate in decision-making.

Tezos aims to strike a balance between decentralization and security through its liquid proof-of-stake consensus algorithm. Participants who qualify as delegates, known as bakers, contribute to the network's security while being rewarded for their participation. Additionally, the network utilizes on-chain governance, allowing token holders to participate in decision-making.