It’s been an eventful year for Tezos thus far, as we have seen significant momentum in terms of adoption of the Tezos Protocol within the past few months.
“Laissez faire les propri´etaires.” — Pierre-Joseph Proudhon
The quote above taken from the Tezos whitepaper encapsulates many of Tezos’ core values today. In English translation, the quote reads “Let the people do it”. While the whitepaper was initially written in 2014, we can see just how well these ideas have stood the past 5 years, now with a fully functional and proven Proof-of-Stake (PoS) protocol. As we look into some notable achievements in the past few months, one can glean just how much Tezos has achieved in terms of adoption.
Tezos is a self-amending blockchain which is able to evolve and upgrade itself over time through its formal and democratic amendment process. While other chains have to go through a hard-fork to upgrade their protocol, which can be detrimental to the community and the network effects that have been formed over time; Tezos is able to circumvent this common practice through its self-amending nature and on-chain governance.
Tezos utilizes a unique Liquid Proof-of-Stake (LPoS) consensus mechanism, allowing for a true digital commonwealth to be established, maintaining a dynamic group of validators and facilitating token holder coordination and, accountable governance.
Notable Achievements in Q2 and Onwards
As I previously enumerated on in my publication in April — “Tezos had a Monumental Q1 and is One of the Leading Smart Contract Platforms”, the past few months have been nothing short of an even more stellar quarter for Tezos.
Tezos Athens Has Successfully Been Implemented and Activated on the Tezos Protocol
On May 30, 2019, around 1 am UTC, Tezos successfully upgraded its protocol following the Athens A proposal completing all 4 phases of the amendment process. The upgrade comes with the notion that Tezos can always evolve and incorporate any advantage other chains have, showing Tezos’ first historic self-amendment is just the beginning.
As originally proposed by Nomadic Labs, Athens A, sought to reduce the minimum baking threshold to 8,000 XTZ as opposed to its former 10,000 XTZ per roll; which represents the minimum amount of XTZ required to “bake” on the Tezos protocol. Additionally, Athens A increased the gas limit. Initially, the gas limit was set at a conservative level with the notion that it could be changed later on through the amendment process, however, through the upgrade, the number of IO’s will remain unchanged while an increase in the gas limit will ensue.
Regarding the changes to baking roll sizes, there is now a lower barrier of entry for prospective bakers wishing to facilitate consensus on the Tezos protocol. Both these two incremental changes have been activated and are in full effect. Conversely, Nomadic Labs compensation of 100 XTZ indicated the first working example of invoicing. Following the activation of the new protocol, Nomadic Labs was paid 100 XTZ automatically to their wallet to “buy a round of drinks”. To see further how this process works, please read my past publication “Inflation in Liquid Proof-of-Stake Models”.
Alexandr Keyra, CMO of Everstake, told Coindesk, regarding the changes to baking roll sizes:
“The reduction will result in a bigger amount of XTZ staked. Now if a baker has 16k, only 10k is staking while after the upgrade the baker will have 2 rolls engaged in staking. There will be fewer ‘leftovers’ so to speak which is particularly important for small bakers.”
Additionally, following the success of Tezos’ first self-amending upgrade, Arthur Breitman, Co-Founder of Tezos, highlighted the importance and high level of participation during the Athens amendment process, emphasizing how Tezos’ on-chain governance led to such a successful upgrade.
“The Athens activation demonstrates that cryptocurrencies do not have to choose between being stuck with early technological choices or protecting themselves against interference. Upgrades can be automated, decentralized, and self-funding. Participation was a huge success with over 80 percent of the votes cast, twice, in a period of a few months.”
BTG Pactual and Dalma Capital Plan to Host $1 billion in STO’s on the Tezos Blockchain
Following the announcement of Elevated Returns planning to tokenize $1 billion worth of real estate on the Tezos blockchain, recently, the largest standalone investment bank in Latin America, Banco BTG Pactual S.A. in collaboration with Dalma Capital, plan on hosting $1 billion in STO’s on the Tezos blockchain.
Previously, BTG Pactual launched it’s first STO on the Ethereum blockchain and the sale is still ongoing, now exceeding its initial soft cap for the REITBZ STO with $3.3 million raised. The move to switch over to Tezos, similar to Elevated Returns reasoning, likely stems from a focus on secure custody, upgradability and institutional-grade smart contracts. In summation, prior to sending X amount, one can run a formal test to ensure that the transaction will execute smoothly. Additionally, secure custody and upgradability make Tezos even more of an attractive choice for STO’s.
Andre Portilho, BTG Pactual’s Partner for the STO stated:
“While the bank remains protocol and technology agnostic, and will continue to utilize the Ethereum protocol, we see Tezos as a global player with a robust blockchain for asset tokenization.”
Zachary Cefaratti, CEO of Dalma Capital also stated:
“With blockchain technology now becoming a reality globally, we are delighted to be working with the Tezos Foundation and Tocqueville Group teams, whose technical expertise compliments our investment banking and asset management credentials.”
The announcement comes as a clear indicator that Tezos is leading the STO space, securing now, $2 billion in STO’s. To further encapsulate the magnitude of Tezos’ momentum in the STO space, Tim Draper had a few words to say regarding Tezos and the announcement.
Tim Draper stated:
“We are excited to see BTG Pactual and Dalma Capital making use of the Tezos blockchain — we are believers in the Tezos project and see a strong use case for security tokens.”
Tezos Becomes one of the Featured Layer 1 Protocols for IDEO CoLab’s Blockchain Accelerator Program
IDEO is a global design firm that has worked with large national companies like Apple, Ford, Nike, and Google. IDEO is at the forefront of a world-renown global design company, even designing the first Apple mouse. To this date, IDEO has over 700 employees, 9 different locations, and over 23 design capabilities.
The iconic design firm has recently decided to enter the crypto space and pursue an incubator program focused on blockchain organizations and various startups. Of the mentioned layer 1 protocols for the incubator program, is Tezos.
Ian Lee of IDEO CoLab Ventures:
Today, IDEO CoLab announces the launch of its new Startup Studio program to help accelerate the world’s best blockchain entrepreneurs and startups, in partnership with over 20 leading organizations and protocols. The program kicks off this month and builds upon IDEO CoLab’s investing and co-creation program for blockchain startups launched earlier this year.
The announcement comes as a pivotal point of bridging the gap between the traditional sector and bringing blockchain technology to the masses. One of the aforementioned launch partners, Tezos, has secured roughly $2 billion in STO’s, has institutional-grade staking support on Coinbase Custody, and has recently passed it’s first on-chain protocol amendment.
In order to further enumerate the implications this announcement has on Tezos and the crypto space as a whole, I decided to interview AJ, the Senior Project Manager of Tezos Commons. Below, in bold, is my question and AJ’s response in italics.
Q: What is your opinion on Tezos’ current momentum and the recent announcement of IDEO entering the crypto space and starting a Startup Studio with Tezos featured as one of the layer 1 protocols?
Tezos is really starting to hit its stride after 1 year since it’s launch, multiple use cases are emerging, especially in the STO space with the largest standalone investment bank in Latin America conducting $1 billon of security token offerings on Tezos, Elevated Returns tokenizing $1 billion of real estate on Tezos, and TokenSoft announcing support for security tokens on on the Tezos Blockchain. Other use cases are gaming with a development team out of New Zealand, TezTech Studio, building a digital collectible game called “Rise of the Magni” utilizing non-fungible tokens on Tezos. Additionally, TQ Tezos and Tezos Foundation has partnered with IDEO, one of the most iconic design firms in the world, for their blockchain accelerator program. IDEO designed the first apple mouse and was one of pioneers that brought mass adoption of PCs to consumers. Their expertise and design-centric values are needed in the blockchain space as I think we are at an inflection point of bringing this technology to the masses.
Recently, we’ve seen a new proposal injected into the Tezos protocol titled Babylon, a collaboration between Cryptium Labs, Marigold, Nomadic Labs and more. The proposed changes include a new variant of the Tezos consensus algorithm, Emmy+, new Michelson features, an account rehaul geared towards allowing a clear distinction between accounts (tz1, tz2, and tz3) and smart contracts (KT1); and lastly a refinement to the quorum mechanism formula featuring a new 5% proposal quorum.
The aforementioned quote at the beginning of the post, taken from the Tezos white paper, shows just how far Tezos has come in terms of adoption and additionally, a resonating ideal that sheds meaning to this day — “let the people do it”.
As we look back and onwards, it’s clear that Tezos will continue to provide an attractive choice for more STO’s, with a focus on secure custody, upgradability, and institutional-grade smart contracts. With the recently proposed protocol amendment, Babylon, and with work already being done on zk-SNARKs, and Tendermint, there are a few exciting proposals coming in the near future.
“I never think of the future, it comes soon enough” — Albert Einstein