What is Tezos (XTZ)?

Deep Dive

1. Self-Amending Governance

Tezos pioneered on-chain governance, enabling stakeholders to propose and vote on protocol upgrades directly. Approved changes are implemented automatically, avoiding contentious hard forks (CoinMarketCap). This system balances decentralization with adaptability, having executed over 15 protocol upgrades since its 2018 launch.

2. Liquid Proof-of-Stake (LPoS)

The network uses LPoS, where any XTZ holder can participate in block validation (“baking”) by staking tokens or delegating to “bakers.” Validators earn rewards for securing the chain, with a minimum 8,000 XTZ (≈$5,400) required to bake independently. This mechanism maintains decentralization while reducing energy consumption compared to Proof-of-Work chains.

3. Security & Ecosystem Growth

Tezos emphasizes formal verification, a mathematical method to eliminate bugs in smart contracts, making it popular for financial and institutional applications. Its ecosystem has expanded with:
- Etherlink: An EVM-compatible Layer 2 for scalable DeFi and tokenization.
- NFTs: A thriving digital art community powered by low fees and eco-friendly design.
- Upcoming Tezos 2.0: Support for JavaScript/Python to attract mainstream developers.

Conclusion

Tezos combines self-governance, rigorous security, and a modular upgrade path to stay relevant in evolving blockchain use cases. As Etherlink gains traction in DeFi and RWA tokenization, can Tezos’ governance model maintain agility while scaling adoption?