What is Tezos (XTZ)?
Tez (XTZ) is the native coin of the Tezos network. Tezos is an open-source blockchain ecosystem. It offers a broad range of blockchain services. It employs smart contracts that allow users to develop decentralized applications (dApps), play games, and trade non-fungible tokens (NFTs) on one of the multiple marketplaces.
The platform offers security and scalability. It promotes peer-to-peer network support and interactions via the nodes. Users are able to create NFTs and build decentralized entertainment spaces. Tezos has introduced a unique model of staking known as baking. It aims to be the next stop towards the Web3 transformation.
Tezos is one of the earliest and biggest Proof-of-Stake (PoS) networks in the crypto space. It has collaborated with globally renowned companies such as Ubisoft, McLaren, and Société Générale. You can see data related to the Tezos price in the dynamic chart above.
Who Founded Tezos?
Tezos was co-founded by Arthur and Kathleen Breitman. Arthur is a computer scientist who has worked with quantitative finance. Using the pseudonym L. M. Goodman, he published the initial Tezos whitepaper. Kathleen is an entrepreneur who has worked in hedge finance. She is the CEO of Dynamic Ledger Solutions, the company behind the Tezos project.
Prior to its launch, the project conducted an initial coin offering (ICO). At the start of the ICO, Tezos price was valued at about $3.
The Tezos crypto ecosystem does not have a centralized core team and does not act as a company. Instead, users are free to contribute to the open-source project, either by providing technical expertise or participating in the governance processes.
Tezos is one of Ethereum’s (ETH) direct competitors in the smart contract market. Unlike ETH, Tezos is a proof-of-stake network which makes it faster and more energy efficient. The platform was designed to avoid hard forks and self-evolve to avoid network exploits and issues that occurred on platforms like Bitcoin and Ethereum in the past.
Tezos was officially launched in January 2018. Since its launch, the token has been somewhat volatile, and as of June 2022, the highest-ever Tezos price was reached in October 2021 at $9.12.
What Are the Main Features of Tezos?
Although Tezos is commonly used to refer to both the asset and the platform, there are two official terms for both. Tez (stylized lowercase as tez), or tezzie, refers to the network’s native coin, while Tezos is the name of the overall project.
According to the protocol, there is no hard cap on how many tez tokens there can be in existence. The coin is not deflationary and the continuous production means that the XTZ price will not be affected by the asset becoming more scarce, as in the case of Bitcoin.
Tez is used as the main utility coin on the Tezos ecosystem. It’s used for dApp interactions, payments, staking, and governance, among other functions.
Tezos employs the Proof-of-Stake consensus mechanism to produce new blocks. This process is referred to as “baking”. It was one of the first blockchain networks to use PoS over PoW, which is the mechanism used by some of the biggest blockchains, such as Bitcoin and Ethereum.
In order to become bakers, users must stake a minimum of 10,000 XTZ. They may then be selected to sign off transactions and add, or “bake”, new blocks to the chain. There is a high incentive to actively participate as a baker and produce reliable blocks. Malicious on-chain activity such as double baking is penalized.
For their contributions to the network, bakers can receive 16 XTZ per block. Endorsers, who act as the block verifiers, receive 2 XTZ per block. Given the relatively low volatility of the Tezos price, users have a high incentive to become bakers or endorsers and accumulate rewards.
XTZ coin holders can participate in the protocol governance. This ensures network decentralization and transparency. How much power the bakers have with their vote is calculated proportionally to their staked amount.