Tezos claims to be an open-source “self-amending blockchain” which can run peer-to-peer transactions and has smart contract capabilities. It is a decentralized, proof-of-stake (PoS) blockchain.

Tezos Explained

The platform can evolve by means of a self-upgrade. The Tezos blockchain can be explained by two mechanisms working in unison:

1. The Shell: which is the code that can amend itself based on whatever users decide. It also interprets transactions and other administrative operations.

2. The Protocol: which is the code that sends proposals which the shell reviews and users deliberate upon

Its main features are:

Self-Amendment

Self-amendment is a key process in Tezos architecture. It allows it to upgrade itself without the necessity to fork (or split into two divergent blockchains).

Forks usually occur when communities itself find different visions for the same project so having a self-amending feature protocol upgrades are easier and execution costs are lower.

Governance

Every Tezos stakeholder can be a part of the governing protocol. Tezos has an election cycle in which stakeholders reach agreement on whatever protocol amendments can be implemented or not. This happens on-chain and by doing so, Tezos can quickly shift into a better governance mechanism the minute they are discovered.

There are four main periods in what concerns Tezos upgrades:

1. The proposal period: in which any user can submit their amendment or upgrade proposal to the blockchain. Proposals with the highest number of votes move to the next phase

2. The exploration vote period: in which proposals need to reach a super-majority of 80% of more votes in favor to advance

3. The testing period: in which the proposal moves to a temporary testing blockchain which usually lasts around 48h. The temporary fork is where changes are verified to be working and to be safe to add to the network

4. The promotion vote period: in which users vote to determine if the proposal goes forward onto implementation. Similarly, to the exploration vote period, proposals need to achieve a super-majority in favor in order to go through.

Decentralized Innovation

Whichever amendment is proposed and accepted by Tezos’ stakeholders may include payment to those involved in improving the protocol. By doing so, participation is heavily encouraged and network maintenance is guaranteed to be decentralized.

Smart Contracts and Formal Verification

Tezos has a platform in which smart contracts can be created and dApps can be built. Tezos also features formal verification, which greatly improves security.

Proof-of-Stake (PoS)

Nodes provide computational resources, and the proof-of-stake mechanism guarantees that the network achieves consensus on the blockhain’s state while lowering both costs and involvement barriers to entry.

Any Tezos’ stakeholder can participate in the protocol and will be rewarded by doing so.

A deposit is needed in order to participate in the consensus protocol. A stake of 8,000 XTZ must be done in order for a participant to become a node and if a participant shows malice and/or behaves in a dishonest manner, they can lose their initial deposit.

Delegation a user’s rights to another is possible in Tezos.

The History Behind Tezos

Arthur and Kathleen Breitman created the Tezos blockchain in 2014.

Its initial coin offering (ICO) happened three years later in 2017 and raised an estimate $232 million US Dollars, surpassing all others at the time.

Soon afterwards, the Tezos Foundation was created in Switzerland in order to launch Tezos’ protocol.