A 2017 star project, Ethereum challenger, and POS chain with the highest staking rate, once ranked among the top 10 cryptocurrencies by market cap.
Tezos is a distributed blockchain platform for smart contracts and dApps, positioning itself similarly to Ethereum. However, unlike Ethereum (1.0) using PoW, Tezos employs Liquid Proof-of-Stake (LPOS) consensus, delivering higher TPS.
The project addresses key challenges faced by Bitcoin and Ethereum, backed by a clear vision from its dev team, earning significant community attention. Fueled by the enthusiastic blockchain community, Tezos raised $230M in Bitcoin and Ethereum through crowdfunding, becoming the second-largest crypto crowdfunding event ever.
Self-Amending Blockchain: Avoiding Forks
Unlike Bitcoin or Ethereum, which experienced contentious hard forks, Tezos features self-amending functionality. Token holders can:
- Stake XTZ directly as nodes
- Delegate tokens to "bakers" for governance participation
This design enables seamless protocol upgrades without chain splits.
Testnet Launch: On June 30, 2018, Tezos launched a unique testnet where all transactions migrated to mainnet upon launch.
Crowdfunding Controversy
Tezos' 2017 crowdfunding raised $232M, but disputes erupted:
- Funds were stored in Swiss-based Tezos Foundation wallets
- October 2017: Founders accused Foundation chair Johann Gevers of unauthorized $1.5M XTZ issuance
- Mainnet delayed beyond promised 2-4 month timeline
Legal Fallout:
- Four 2017 lawsuits alleging securities law violations (XTZ classified as security)
- Gevers resigned in February 2018 after community sided with founders
- March 2020: Foundation settled class-action lawsuits
XTZ Tokenomics & Governance
- Symbol: XTZ
- Circulating Supply: ~750M (no hard cap under PoS)
- Staking Rate: 80% (#1 among PoS chains)
- Staked Value: $1.44B (3rd after Polkadot/Cardano)
Bakers vs. Miners
- 450+ active bakers (no upper limit)
- "Baking power" replaces hash power
- Requires 10,000 XTZ per "roll" + 576 XTZ security deposit
Consensus Cycles:
- 4,096 blocks/cycle (~2.84 days at 1-minute blocks)
- Rewards: 16 XTZ/block + 2 XTZ/signature
Ecosystem & Partnerships
Tezos focuses on compliant finance with notable collaborations:
| Initiative | Partner | Value |
|-----------|---------|-------|
| STO Platform | BTG Pactual | $1B+ |
| Tokenized Real Estate | Elevated Returns | $1B |
| Digital Funds | Tynton Capital | $300M |
| COVID Relief | Swiss Town | $280K |
Key Milestones:
- September 2020: Joined Blockchain Service Network (BSN)
- November 2020: Swiss e-voucher distribution
Challenges & Outlook
While Tezos shares similarities with Ethereum, its ecosystem growth lags:
- Current market rank: #18 (peaked at top 10)
- Needs accelerated dApp deployment
Potential advantages:
✅ On-chain governance model
✅ Enterprise adoption path
✅ Regulatory-friendly approach
FAQ
1. Is XTZ a security?
After 2020 lawsuits, Tezos Foundation settled with regulators, treating XTZ as a utility token in most jurisdictions.
2. How to stake XTZ?
Delegate to bakers via wallets like Temple or Kukai. Minimum 1 XTZ (no lock-up period).
3. What's Tezos' TPS?
~40-50 transactions/second (vs Ethereum 1.0's ~15 TPS).
4. Who are major Tezos bakers?
👉 Top bakers list includes Cryptium Labs and Staking Facilities.
5. Can Tezos scale further?
Yes—upgrades like Mumbai (2023) introduced rollups for higher throughput.
6. Where to buy XTZ?
Available on major exchanges like OKX, Coinbase, and Kraken.