Tezos

Tezos is Poised for Massive Growth

Tezos

Tezos is battle-tested and upgradable

Crypto is the wild west of finance, and many projects will not survive the future. Tezos, #45 on the charts, is a perfect example of a robust blockchain that upgrades over time through a unique on-chain governance structure. Over the last few years of Tezos' existence, there have been 9 successful protocol upgrades voted on by the community. The most recent upgrade, Ithaca, featured a new consensus algorithm called Tenderbake, which is derived from Cosmos' Tendermint protocol and enables fast finality. 

Tezos is a layer 1 proof-of-stake blockchain that was started in 2018 by Arthur and Kathleen Breitman. Through its many successful upgrades, Tezos has set itself apart as a future-proof blockchain. Recently, various developer teams have pushed a new upgrade to the community called Jakarta 2, which will bring rollups to the Tezos mainnet. This will unlock a significant performance increase by batching transactions together and processing them off-chain.

An impressive DeFi ecosystem

Along with the many protocol upgrades, Tezos has seen vast increases in the amount of DeFi transactions. As a top Ethereum competitor, Tezos has been seeing a high number of contract calls per month, averaging between 3 and 6 million. A contract call simply means that a wallet on the blockchain has authorized an interaction with a smart contract. Bank of America also noted in a research note that Tezos has the second-highest developer interest behind Ethereum. These metrics show impressive growth in the Tezos DeFi ecosystem. 

There are multiple popular Dexes on Tezos including Quipuswap, Plenty DeFi, and Smartlink. Notably, the Tezos NFT ecosystem is among the best in the crypto industry, with top artists such as Doja Cat and Linkin Park frontman Mike Shinoda minting on it. Tezos has one of the most popular music NFT platforms, OneOf. There is also a new game called Dogami, which is attracting a large new audience to the Tezos blockchain. Another focus of Tezos DeFi is asset creation. The Youves asset platform was recently launched and has seen immense popularity.

In addition, formal verification in Tezos Michelson smart contracts ensure a high degree of security for transactions. By focusing on security, Tezos has had far fewer exploits than competitors such as Solana, which recently had another network shutdown.

Problems (or are they)?

Tezos just like any other chain has various problems to address, but it's a different case here. While Tezos does excellent in the technology department, the community doesn't seem to be on the same page at times; especially in the official subreddit. Investors most often raise concerns about marketing, which is now being ramped up.

Naturally, most users on social media focus on price as opposed to other metrics like the ones discussed above. The price is indeed a valid concern, since XTZ has not broken past $9 and is now hovering around $2.50. But, this is simply due to the current market downturn.

Tokenomics is another factor often to blame for the poor price action. While an unlimited supply is often said to lead to problems, Arthur Breitman has correctly clarified on his blog that the protocol actually ensures a low inflation rate (currently around 4.8%) and rewards investors for staking their Tez. The liquid proof-of-stake structure allows you to move your coins at any point, so there is little risk. In fact, 75% of the Tezos supply is staked.

Another concern often peddled by users is a supposed lack of clarity from the Tezos foundation. While this may have been the case a few years ago, the Tezos Foundation publishes comprehensive reports, which detail their usage of the $300 million Bitcoin "war chest" and other assets. Arthur Breitman also now sits on the board to ensure stability and innovation.

Conclusion

Tezos is the one of the most robust and decentralized blockchains on the market. Its many unique features such as on-chain governance and liquid proof-of-stake allow users to transact freely and securely. Problems such as marketing are already starting to be solved, and the other problems listed by users are mostly misconceptions.

There are simply no competitors with the same execution results as Tezos. 9 (almost 10 successful) forkless protocol upgrades is a hard track record to beat. Despite lagging behind competitors who have had many technical issues, Tezos has all the ingredients to achieve top 10 status.

Cryptohopper