Key Takeaways
- Tezos is a blockchain network that facilitates DeFi, dApps, and NFTs, similar to other crypto blockchains.
- Tezos uses an on-chain governance mechanism to vote on and implement protocol upgrades.
- XTZ holders who stake their tokens (bakers) have voting rights on proposed changes to the Tezos protocol.
What Is Tezos (XTZ)?
How Does Tezos (XTZ) Work?
Tezos (XTZ) is a blockchain platform designed to be self-amending, meaning it can evolve and upgrade over time without forking, which is a split in the blockchain. Here’s a breakdown of how the project works:
Features
Liquid Proof-of-Stake (LPoS)
Unlike traditional proof-of-stake (PoS), where miners validate transactions, Tezos uses a variation called LPoS. Here, users “bake” XTZ tokens to become validators on the network. Anyone with at least 6,000 XTZ can become a baker. Those who don’t have enough can delegate their tokens to existing bakers and still participate.
On-Chain Governance
XTZ holders who stake their tokens (bakers) get to vote on proposed changes to the Tezos protocol. This ensures the network is community-driven and can adapt to new technologies and user needs.
Roles In The Tezos Network
- Bakers – These are the validators who secure the network by baking transactions. They are rewarded with XTZ for their contribution.
- Delegators – Users who do not have enough XTZ to become bakers can delegate their tokens to existing bakers. In return, they share a portion of the baking rewards.
- Tezos Improvement Proposals (TIPs) – Anyone can propose changes to the Tezos protocol through TIPs. The XTZ holder community then votes on these proposals.
Tezos (XTZ) Token And Tokenomics
Tokenomics
The XTZ token is Tezos’ native cryptocurrency. It is used for:
- Transaction Fees
- Staking
- Governance
Token Details
Total Supply: ∞
Circulating Supply: 1,016,549,367 XTZ
Current Price: $1.73
Market Capitalization: $1,758,494,714
This information is current as of December 5th, 2024, and the token’s price, market value, and available supply may fluctuate.
Distribution
- ICO Participants (79.5%)
- Tezos Foundation & Dynamic Ledger Solutions (20%)
- Early Backers & Contractors (0.41%)
Where Can I Buy Tezos (XTZ)?
Binance – Binance is a major exchange offering a wide range of cryptocurrencies. It offers multiple ways to buy crypto, including credit cards, debit cards, and peer-to-peer (P2P) trading.
Bybit – This exchange is known for its derivatives and margin trading features, but you can also use the platform for spot trading.
Coinbase – Coinbase is an American-based cryptocurrency exchange that allows you to buy cryptocurrencies using various payment methods, including bank transfers, debit cards, and wire transfers.
Is Tezos (XTZ) A Good Investment?
Pros
- Energy Efficient – Tezos uses a Proof-of-Stake consensus mechanism, which consumes significantly less energy compared to Proof-of-Work blockchains like Bitcoin.
- Secure and Adaptable – The on-chain governance model allows for upgrades to the Tezos protocol without disruptive hard forks. This fosters a more secure and adaptable network.
- Decentralized Applications (dApps) – Tezos supports the development of dApps, similar to Ethereum, opening doors for innovation in DeFi and NFTs.
Cons
- Unlimited Supply – Tezos has an unlimited total supply, which can lead to inflation and potentially affect the token’s price.
- Competition – Tezos faces stiff competition from other smart contract platforms like Ethereum and Cardano.
- History Of Delays – The Tezos project has faced delays and challenges in the past.
Final Thoughts
Whether Tezos (XTZ) is a good investment depends on your risk tolerance and goals. Remember, this guide only provides a starting point for your research. Always conduct your due diligence before making any investment decisions.
