‘Smart Contract’ in Ancient Greek
According to its developers, Tezos means ‘smart contract’ in ancient Greek. Created by Arthur and Kathleen Breitman during the 2017 ICO bull run’s peak, Tezos is a project filled with ambition. From misappropriation of funds to a litany of lawsuits, the story of Tezos is long and spectacular.
Developed to make a trustless, ‘self-amending’ decentralized payments network, the project raised over $230 million within days of its ICO.
While the Tezos Foundation held over $1.2 billion in tokens at one point, a series of ego-clashes and money-crazed decisions almost saw the whole thing collapse before it had even launched.
The Breitmans saw the inefficiency of having many disparate virtual currencies and wanted to create a blockchain to solve real-world problems. The Tezos ICO may have taken place in 2017, but the foundation would not launch the network until a year later.
During this gap, the Tezos Foundation went through months of development problems. That year, in light of the many exposed fraudulent schemes in the crypto sphere, the United States SEC had declared war on ICOs selling unregistered securities.
Tezos’ only hope was to deliver a working platform by the promised date. Still, despite having hundreds of millions of dollars to spare, the foundation struggled to make even the slightest progress.
The project has since put its turbulent history behind it, and after months of delays, delivered a stable and regularly updated decentralized network in 2018.
Rocky Past, Rock-Solid Future
As mentioned above, Tezos raised $232 million from its ICO in 2017. After the mainnet launch in July the next year, XTZ quickly tumbled to an all-time low value of $0.35 in December 2018.
Though January 2020 saw many digital assets in the crypto space rise considerably, Tezos’ upward journey was far more enthusiastic. After starting the year at $1.35, XTZ soared $3.49 by mid-February. The token rose further to $4.40, bringing its total market capitalization to nearly $3.2 billion in August.
Tezos also recently announced that they would be reducing smart contract fees by 75% to encourage DeFi participation, which could cause more appreciation in the months to come.
A Self-Governing Blockchain
Like other cryptocurrencies, XTZ or a ‘Tez’ is a token on a decentralized digital ledger. Instead of being rewarded to miners like in a Proof-of-Work system, Tezos awards its holders for taking part in its Liquid Proof-of-Stake consensus mechanism, similar to a DPoS system.
The network was designed to evolve to suit its users. Instead of relying on developers and miners to make design choices, Tezos’ governance system builds its own decisions.
Developers are rewarded tokens for approved proposals, incentivizing user participation and decentralized development. Tezos also contains a mechanism for collective decision making, allowing token holders to vote on the protocol’s development.
Suits and Laws
Despite the success of its ICO, Tezos became plagued with disputes between significant members of the foundation.
The tension between Tezos Foundation president Johann Gevers and the Breitman couple brought lawsuits and an indefinite delay on the network’s launch. Tezos also ran into legal trouble after investors initiated a series of lawsuits that argued XTZ’s status as an unregistered security.
While most of these problems have been solved or are no longer relevant, it remains a stain on Tezos’ otherwise great pitch.
Decentralized Community, Unanimous Decision
In 2017, members of the Tezos community banded together, signing a petition requesting the removal of Johann Gevers from his position as president of the Tezos Foundation.
Gevers had control over the safe containing the foundation’s funds, and the community wrote letters, tweet threads, and blog posts to pressure the Swiss authorities into taking action. One anonymous Reddit user even compiled a 17-page document on Gevers’ past.
His leadership experience was found to be dodgy at best, with hardly any evidence of any of his other operations ever doing anything. 1,700 people from a reported 95 countries signed the petition for his removal.
A Breitman Future
Tezos isn’t just another smart contract blockchain; it was designed to be a self-governing decentralized network and aims to become the world’s best reward system.
The Tezos network also has automated upgrades and updates, which lets participants vote to reach consensus, and many large players in the blockchain space like Securitize, BTG, and tZero have started tokenizing their assets on the platform.
Ethereum and its looming sequel currently dominate the smart contract space, and the tight squeeze left is fiercely contested. Outfits like NEO, Stellar, Cardano, and EOS are all working towards creating faster, more efficient systems.
However, since there are no upper limits to the number of nodes on Tezos, the ‘Liquid Proof of Stake’ network could compete with the upcoming Ethereum 2.0. With faster transaction speeds and lower fees, Tezos could slowly become the go-to smart contract blockchain for everyone.
Greek Names, Global Impact
The popularity of DeFi has taken the whole industry by storm, and to attract decentralized finance investments on the platform, Tezos recently slashed their smart contract fees by 75%.
This was made possible due to the ‘Delphi’ update, which made Tezos blocks capable of holding 3.5x more simple transactions and 4x more multi-asset transfers. Delphi also came with 4x lower storage costs, and contracts can now perform 10x more internal calls.
The Chinese government-funded blockchain project BSN (Blockchain Service Network) recently announced its integration of Tezos onto its international portal. This has allowed developers worldwide to access Tezos using BSN’s public nodes, access affordable development tools, and spread awareness.
Tezos has left its sensational past behind, and the self-governing blockchain has grown to become a stable and secure platform for building smart contracts and other distributed applications.
If its growth continues along this trajectory, Tezos could cement itself as a project that’s here to stay, regardless of whether ancient Greek actually has a word for smart contracts.