Summary of some important features of Tezos
Summary of some important features of Tezos

By Allen Walters | Publish0x posts | 21 Jan 2020


Tezos unique governance model: One of the biggest problems for decentralized blockchains is the fact they need to evolve swiftly, to upgrade, add functionality etc. To accomplish this, there needs to be consensus amongst the nodes. (Nodes = computers run by miners/ stakers/ bakers.) If a change in the code is made and there is no majority, then the new code doesn't get's implemented. If a minority of the nodes decides to use the new code, the blockchain will split. (Fork) And the main chain will continue to use the old code. So effectively no evolution for the main chain. (For example BTC and BCH where BTC stayed as it was and the split chain used the changed code and became BCH.)

The above shows 2 problems:

  1. The inabillity to evolve swiftly to new market demands. (For example BTC needs to scale to be able to handle more transactions/ sec.)
  2. The risk of a split chain, hard forks. (If an STO is launched on a chain that forks, then owners of tokens now own these tokens both on the original chain and the new chain. That's not a good thing for regulated tokens. Big nono.)

Tezos solves this with their governance model. Upgrades are presented through a fixed amendment model, then there will be on-chain voting where voting power is based on the amount of XTZ you bake (Stake), then a testing period is started if the majority voted yay, and if all is well, Tezos has evolved in a matter of months. If the amendment is rejected, there is no possibility to run the new code and split the chain, so hard forks are impossible. This is unique, this is groundbreaking, this is why Tezos will evolve faster and smoother than any other chain.

PoS (LPoS for Tezos): Instead of Proof of Work (PoW), Tezos uses Proof of Stake (PoS). From a user perspective, this means you can earn extra XTZ by baking or delegating your XTZ. Delegating is super easy in Tezos. Another advantage of PoS (from a value perspective) is that there is no selling pressure from miners. Miners need to cover costs. (Electricity and money invested in expensive hardware.) So miners sell to cover costs. In PoS the stakers (bakers for Tezos) have way less costs to cover. (Less expensive hardware and way less energy costs.) Less selling preasure = less supply in the supply and demand balance. Add to that that people that earn extra XTZ while they HODL, means more people will just HODL long term.

Industry grade smart contracts: For STO launches, you need to be able to have restrictions on the tokens you launch. Therefore you need special smartcontracts that provides these options in a user friendly way. Tezos has those, and on top of that, these contracts are formally verifiable. Which means you can test them formally before you launch millions of $ of value on them. This is quite unique. Very exited about a new standard launched on Tezos: The NYX standard. Also more details about STO's and smartcontracts in this article. Around 3 billion worth of STO's are announced to be launched on Tezos.

War chest: Tezos has about $600 mill funding for future growth. They use this wisely.

Decentralized: Tezos is actually a truely decentralized blockchain. As opposed to many other projects in the CMC top 20. Decentralizeation is a huge deal that is often forgotten. But BTC is as big as it is due to this factor. It's a program let loose on the internet. No central party can force their will on a truely decentralized blockchain.

Additional info: Also read this twitter thread. Provides insights of important companies on Tezos and some very usefull articles.

 

The Tezos Foundation has just released another round of Tezos Ecosystem Grands where they fund projects that add to the Tezos Ecosystem. Check the announcement here.


Allen Walters
Allen Walters

Facinated by blockchain and future proofing cryptocurrency. Discover the tech before it gets relevant.


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