These are some of the important points that define Tezos:
- Funding system.
- Governance model.
- Liquid PoS, not to be confused with DPoS.
- Institutional-grade smart contracts.
- The building of a developers community.
Tezos has $650 million worth of funding at their disposal. This is an enormous amount, that not many other projects can match. This warchest will fund Tezos' development for years and possibly decades. Any organization with a project that can move Tezos forward, can apply for a grant to fund their project. These are organizations that:
- Improve Tezos and develop new amendments (see governance system)
- Build projects on Tezos.
- Increase growth of the developer community.
- Community related organizations that provide education, marketing, exchange listings, partnerships etc.
The funding system doesn’t only provide a more decentralized structure by expanding into independent sub organizations, but it also makes Tezos' total and organic organization grow exponentially.
Governance model (who decides how to move forward in Tezos blockchain development):
Tezos avoids hard forks by adding an on-chain governance model where bakers can vote for improvements (amendments) that are submitted by organizations funded through the Tezos grant system. (Delegators can also influence voting through their bakers. See "Liquid PoS") Amendments are discussed on social media, with the Tezos Agora Forum as the main discussion forum. With two amendments implemented in a year, the governance model proofs it works. The future of Tezos' development looks to become smooth and swift.
Tezos' governance model also has benefits for projects that are build on Tezos. Projects like StakerDAO (And other DAO's to come) will be able to integrade this governance in their project. The Coase cardgame, Tezsure and USTDZ will do so too. The possibilities are enormous.
Tezos uses a consensus mechanism called Liquid PoS. It results in the fact that everyone who owns Tezos (XTZ), can direct their coins towards the PoS system and earn rewards. In Tezos, “staking” is a term that is not used. Instead this is called “Baking”. “Bakers” are the ones that start up a node and fixate a minimum of 8k XTZ. Running LPoS will earn them rewards. (Like mining in PoW. The advantage in LPoS is that it's rewarded not to sell because you earn in ratio to your holdings, and electricity usage is enormously reduced compared to PoW.) Anyone who does not have the ability to start up a node, or simply does not want to, can “Delegate” their XTZ to a Bakker of choice. Delegators don’t need to fixate their XTZ, and can stop at any time. In exchange of their service, bakers get a percentage of the rewards that delegators earn.
Incentive to bake is apparently big enough to make Tezos the most decentralized PoS chain up to date with 400-500 nodes which, in turn, have an enormous amount of delegates. More and more delegators voice the importance of a democratic based vote from their bakers. This means that the voting model could evolve more and more into something where delegators will get more influence. It will be different for each baker if and how they give delegators more influence. Some already do, some don’t, it will be a organic process.
That Liquid PoS is a system with enormous potential, shows the latest developments. One after the other, big exchanges give their users the opportunity to delegate their coins while stored on their exchange. OKEx, Coinbase and Kraken lead the way. XTZ has become the first cryptocurrency with daily rewards on exchanges. Lately, for the first time ever, a Stock exchange launched an ETP based on Tezos (1-1 backed by XTZ) and give a return based on LPoS rewards. (Swiss' main stock exchange SIX)
The stablecoin in development on Tezos, USDTZ, also fully utilizes LPoS rewards and will offer unique opportunities. (Returns if fixate for certain period, on-chain-lending)
Institutional-grade smart contracts:
When ETH offered the possibility to launch ICO’s with their ERC20 token, regulations where totally ignored. Now the realization has landed that regulations need to be implemented. ETH has made some progress and has a number of STO's on it's record, but new standards need to be developed. TokenSoft has just completed it’s proof of concept for its ERC-1404 token which allows integration of regulations and strict KYC documentation on smart contract.
Tezos is working on a new standard: the NyX. Developed by Equisafe, Nomadic Labs and OCTO Technology, the NyX standard will be fully integrated in the Tezos chain. “The Nyx standard will leverage the Tezos blockchain to automatically secure and execute over 160 predefined business rules, which will reduce transaction costs and avoid a number of administrative errors, specifically on topics of conformity.” The “ NyX is constituted of 160 fcts, 4 contracts & 3 modules. We’ll be able to do more than 1404. They will also be formally verified.”
The NyX standard deserves a full article of it's own, which I am in the process of writing.
For an independent judgement, lets start with the introduction of one of the leading security token issuance and management platforms and the creator of the ERC-1404 token: Tokensoft. TokenSoft partnered up with Tezos and will issue STO's on Tezos. Tokensoft projects that 25% - 35% of their 3 billion worth clientele will choose Tezos based STO issuance. “TokenSoft provides blockchain-enabled compliance infrastructure for issuers seeking to place equity, debt or derivatives on the blockchain. In 2017 TokenSoft launched the first platform to enable blockchain issuers to comply with securities laws internationally. In 2018, TokenSoft acquired US FINRA registered Broker Dealer TokenSoft Global Markets. In 2019, TokenSoft launched the world's first custody solution for security tokens which enabled cold-storage, multi-signature custody of blockchain-based securities. To date, TokenSoft customers have issued almost half a billion and are currently seeking to issue $3 Billion+ onto the blockchain.” (Source)
Tokensoft about Tezos:
"After performing diligence on the Tezos blockchain, we found that Tezos is great for high complexity, high value. With the formally verified contracts, you can now test high-value transactions prior to publishing them to the blockchain, providing greater confidence in safely and securely using the blockchain. Anything which furthers security and reliability is of interest to our clients."
The NyX standard on Tezos will only improve the high standard Tezos already has for STO offerings.
STO's prospects for Tezos so far:
- BTG Pactual and Dalma Capital adopt Tezos for STOs worth $1 billion
- Bonda Vinci Signs Business Agreement with Tezos Korea for Joint Venture of Art and Real Estate Securities Token (STO)
- Elevated Returns sets to Tokenize Thai Real Estate with a Target of US$100m This Year
- The Fundament Group has developed Germans first real estate crypto token and has just formed a strategic partnership with Tezos.
- The Security Token platform tZERO will Tokenize about $640 million in UK Real Estate.
- TokenSoft is "projecting that within the next year, 25–35% of the amount processed through our platform will be on the Tezos blockchain. Currently our clients have processed half a billion through our platform, and they are currently seeking to issue $3 Billion+ onto the blockchain." Which comes down to about $1 Billion.
The building of a developers community forms the basis for a storm of projects to be launched on Tezos. The funding system Tezos uses, has given shape to several organizations that spread out world wide and form the basis of a growth in the Tezos developers community. Tezos is training 500 developers with their Tezos Blockstar Programme in collaboration with B9lab. Additionally, organizations like Nomadic Labs, Cryptonomic, and Stove Labs host workshops quite often. In august, @AMangiero stated that there are over 800 #Tezos developers who have been trained or are being trained.
If you're interested yourself, you could join this webinar on the 26th of November. "Deploying a Smart Contract to Tezos with SmartPy" This webinar will be free of charge.
Tezos Southeast Asia just announced their partnership with Tribe, which is Singapore’s first government-supported blockchain ecosystem platform. Tribe will run it’s training program for developers on the Tezos blockchain. With this partnership Tezos Southeast Asia pushes an extremely interesting set of Singapore government applications towards Tezos. The training will start in Q1 2020.
It is a big step for authorities to deploy an application on a decentralized blockchain platform. Something that, thusfar, has not been done yet. The Partnership with Tribe could push the boundaries here. But just before the Tribe announcment, we learned that in September of this year, that boundary had already been taken. For the first time, a smart contract, developed by a public authority (THe French Gendarmerie’s cybercrime division (C3N)), is deployed on a decentralized blockchain.
"The French Armies and Gendarmerie’s Information & Public Relations Center (SIRPA) announced that since September 2019, the Gendarmerie’s cybercrime division (C3N) has been validating judicial expenses incurred during investigations and recording them on the Tezos blockchain.
Debuting on the Tezos network, this is one of the first examples of a government entity using a smart contract for operational purposes.
The new program allows C3N to acquire cryptocurrency from Europol-allocated funds in order to cover operational costs. Utilizing a blockchain protocol like Tezos for this process simplifies administrative overhead by ensuring C3N funds remain auditable and traceable while maintaining strong security. The smart contract was designed to only allow access to permitted individuals, effectively allowing C3N to justify an expense without any risk of disclosing operational activities and jeopardizing ongoing investigations."
My personal conclusion is that Tezos is the next best thing. A true long term investment. The ICO hype resulted in a huge amount of funds that is now at the disposal of Tezos. Vision and momentum have, and still is, creating an ecosystem that will push Tezos upwards in the ranks of current cryptocurrencies.
* Always dyor though. Some of the links posted in the article above should have given you a great start. Here a collection of interesting links you could browse through. And then you obviously always have Google, Bing, DuckDuck and the likes. All the best to you and whatever your path will be. Wish you good gains and an interesting and exiting journey into cryptospace!!
- Tezos Foundation.
- Tezos Foundations first bi-annual report.
- Latest Tezos Foundation weekly update.
- Tezos Wallets.
- Tezos Commons.
- Tezos Agora.
- Nomadic Labs.
- Tezos Commons.
- Tezos Korea.
- Tezos South-East Asia.
- Tezos ecosystem evolves: The NYX Standard.
- USDTZ, Tezos stable coin.
- Coarse creating a Tezos based digital strategic collectable cardgame.
- Staker DAO.
- Checker - robocoin technology for Tezos.
- Viaz. First major decentralized peer to peer funding platform on Tezos.
- Tezos-based Vehicular Ad Hoc Blockchains.
- Tezsure: Insurance Simplified. An insurance platform on Tezos.
- Chorus Mobility is working since 2018 on a Tezos-Based concept for vehicle to vehicle payments.
- Tezos will be the lead blockchain partner at Fintech Connect 2019.
- Key takeaways from the OKEx Tezos AMA.
- Compare Tezos to Ethereum.
- Total of announced STO's so far on Tezos.