Wed. Sep 29th, 2021
    Tezos, Free TON, Blockchain

    The Tezos blockchain experienced everything: a record launch and protracted litigation that collapsed the cryptocurrency exchange rate. However, the project survived the bear market and is now the largest decentralized network. The secret to success is a governance model that keeps blockchain at the forefront.

    Engineer Arthur Breitman, who has worked as an analyst with Goldman Sachs and Morgan Stanley, created the Tezos blockchain in 2014 with his wife, Kathleen. Arthur wrote two analytical articles, criticizing bitcoin and presenting a new project, and Kathleen published his whitepaper.

    According to the developers, the word “tezos” has ancient Greek roots and means “smart contract”.

    In A Bear Hug

    In April 2017, the couple founded the Tezos Foundation, a non-profit foundation whose task is to develop blockchain. The main problems of the network will be connected with this fund later on. The founders of the project and the management of the fund disagreed on how to manage the funds raised for the development of Tezos. And it was a record amount.

    2017 is a period of a sudden investment boom for cryptocurrencies. In 13 days, starting July 1, the ICO of the Tezos project raised an incredible amount for the crypto industry at the time $232 million. Soon the president of the Tezos Foundation, South African entrepreneur Johann Gevers, accused the Breitmans couple of unauthorized sale of securities worth 25 million. The conflict was resolved only by August 2020, when Gevers had already left the project.

    Arthur and Kathleen Breitman

    The litigation has slowed down the development of the platform, the main network has failed to roll out as planned, and investors have initiated legal proceedings claiming that the blockchain cryptocurrency, XTZ tokens, are unregistered securities. The XTZ exchange rate dropped significantly. The players on the exchange have been quick to take advantage of this, but the project did not drown in this storm. It was saved by the network itself, or rather, the conceptual model of development established by the founders of the blockchain. As a result, today Tezos is quite a stable project, the currency of which is included in the top fifty by market capitalization, according to Coinmarketcap.

    Self-healing Blockchain

    It was a simple idea, which turned out to be quite complex, but doable. When most early blockchains relied on development teams and expert management, the founders of Tezos decided to allow anyone with XTZ cryptocurrency to vote on changes to the platform’s rules. Once the entire network has made a joint decision, the blockchain software changes to ensure that changes are made. This innovation has created a new classification of blockchains, which are divided into those that are managed by expert groups, and those that are decentralized — the latter model is also implemented by Free TON.

    Tezos is the first blockchain to implement that proof-of-stake algorithm, now called liquid Proof-of-Stake. A classic PoS consists of three things: there is a network, it has nodes and node owners. Any node owner contributes a certain amount to their stake — it is locked and cannot be used. But this gives the right to take part in the election of validators and profit from it. There is one weakness in this algorithm — there is a bias in favor of those who have a lot of assets. To avoid this, a liquid version of PoS was proposed.

    This is a type of delegated proof of stake in which XTZ token holders can delegate their assets to a node owner (in Tezos they are called bakers). Unlike a simple delegated PoS, here token holders do not have to share ownership or lock their personal tokens to take part in the betting process. That is, they do not delegate their assets, but something like their trust.

    The Tezos governance system can be characterized as a representative democracy

    Controlled Inflation

    To become a validator in Tezos, it is enough to have a so-called roll — the amount of 8,000 XTZ. The amount was larger at first, and it was its reduction from ten thousand to eight that was the first approved collective decision to update the blockchain. This landmark event was named Athens. Later there will be Babylon, Carthage, Delphi, Edo, and the most recent update, Florence, in May 2021. Work is now underway on a planned Granada update that will reduce the time between block formation from 60 to 30 seconds and is expected to improve performance and dramatically reduce gas usage.

    Another feature of Tezos is inflation. Those XTZ holders who do not bet or delegate their funds to others risk losing their value as new tokens are issued on the blockchain and distributed to bakers. As a result, the current annual inflation rate is 3.6%, and as of early 2021, nearly 80% of all XTZ in circulation were directly placed by bakers or delegated by them for betting.

    Tezos governance model, which included the user network itself, guaranteed the project flexibility and innovation, which, together with its scalability, gave it a competitive advantage over, for example, bitcoin.

    Besides what initially distinguished Tezos from other early projects, this blockchain also provides a set of features common to cryptocurrencies. So, developers can use its software to run custom programming logic, to develop decentralized applications and programs designed to replicate products and services.

    Collaboration Palette

    The technological features and innovativeness of the platform, the close media attention to the project, led to cooperation between Tezos and organizations coming to the crypto industry. In February 2019, Elevated Returns, a financial group specializing in the digitization of traditional financial assets and best known for its tokenization of the St. Regis Resort in Aspen, announced that it had selected Tezos as the blockchain on which it would offer tokenized real estate offers to qualified investors.

    In 2020, some corporations used blockchain to offer security tokens, and in 2021, giants such as Ubisoft, Groupe Casino, and Societe Generale came to work with Tezos. NFT on Tezos began to create Red Bull Racing Honda and McLaren Racing.

    Red Bull explains its technical partnership with Tezos as its official blockchain partner by its energy efficiency, self-upgrade capability, and platform performance.

    In June 2021, the NFT card game and comic book Emergents from the Interpop team were announced to be released on the blockchain.

    Tezos And Free TON

    Based on Tezos software, Dune blockchain partnered with Free TON until the merger and acquisition of Dune. Fabrice Le Fessant, president of the Dune Network Foundation, spoke about the work on the merging algorithm. One of the stages of the merger should be a bridge between Free TON and Dune, the contest for the development of which was announced in the spring of 2021 (results). The bridge will allow the exchange of tokens between platforms, and since Dune is a fork of the Tezos blockchain, this bridge will automatically create a working bridge in Tezos.

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