The guide provides all you need to know about Tezos – an open-source, self-amending cryptographic ledger platform allowing smart contracts and developing dApps on its advanced platform.
Tezos (XTZ) is an open-source platform for assets and applications that can evolve by upgrading itself. Stakeholders govern upgrades to the core protocol, including upgrades to the amendment process itself. Tezos provides a formal and systematic procedure for the platform participants to vote and reach an agreement on the proposed protocol amendment, with the help of the duo on-chain mechanism and self-amendment. In addition, Tezos offers a platform to create smart contracts and build decentralized applications that cannot be censored or shut down by third parties.
Tezos set out in 2014 with a view to create a “self-amending blockchain”. It came on the initiative of a couple, Arthur and Kathleen Breitman, on the Dynamic Ledger Solutions, a startup they founded to develop Tezos.
In July 2017, the Tezos team generated to the tune of $232 million, an equivalent of 66,000 BTC and 361,000 ETH in its first ICO, the largest at the time. Consequent to the initial coin offering, the Tezos Foundation appeared to launch the protocol.
The Tezos Foundation was responsible for the procurement of Dynamic Ledger Solutions, such as intellectual property rights forming the basis for Tezos blockchain, and it is per the ICO agreement.
Tezos’ arrival was groundbreaking, with its novel model separating cryptocurrencies into “on-chain governance” and those with “off-chain governance”. This new and unique idea brought Tezos a lot of public interest, which was proven by its more-than-successful funding series in 2017. Tezos officially went live in 2018.
Tezos LPoS Blockchain
In contrast to other cryptocurrencies such as EOS (EOS), Lisk (LSK), Tron (TRX), and BitShares (BTS) using Delegated Proof-of-Stake, Tezos uses a liquidity Proof-of-Stake (LPoS) algorithm. It allows Tezos software to secure the network, validate transactions, and distribute newly minted XTZ.
Its delegation purpose is optional, as it minimizes the dilution of small token holders. The barrier to entry is 8,000 XTZ, with 8.25% of total baked tokens frozen as bonds. For governance participation (“nodes”), participants need to stake XTZ in a process Tezos calls “baking”. Participants need 8,000 XTZ (“roll”) to become a baker.
Further, modest computing power and reliable internet connection characterize Tezos. Tezos validator Set is dynamic, with about 80,000 bakers. Users can also delegate their tokens to other bakers, allocating votes to other users so they can earn XTZ rewards on its live blockchain. Tezos’ LPoS design priorities are decentralization, accountability, governance, and security.
Tezos Network Shell and Protocol
Network Shell, or interface, plays a key role in the platform. It takes over the blocks sent by the peers and verifies them against the present protocol. The network shell is arguably the most delicate part of the node. Network shell is the code that handles transactions, administrative operations and amends itself based on how users vote.
Meanwhile, network protocol grabs the source of a new protocol (a “protocol upgrade”), compiles them on the fly, and replaces the testnet with this new protocol. After a certain period of time, it may promote the test protocol to replace the primary protocol, completing the default, two-phase protocol upgrade mechanism. It is the part of the code that sends proposals to the shell for review.
Governance on Tezos
In Tezos, all stakeholders can participate in governing the protocol. The election cycle provides a formal and systematic procedure for stakeholders to agree on proposed protocol amendments. By combining this on-chain mechanism with self-amendment, Tezos can change this initial election process to adopt better governance mechanisms when they are discovered.
Tezos (XTZ) Token
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