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Tezos Review – Another Try at Virtual Democracy

Tezos is a decentralized, permission-less, blockchain platform for Smart contracts and decentralized applications. It launched in June 14, 2017 and at that time became the largest funded ICO, raising $232 million. The project was created and developed by Arthur and Kathleen Breitman. Its main purpose is to implement a true virtual democracy DLT Dapps developmental platform. It achieves governance by its community and can upgrade organically guided by consensus approval. Despite its rocky start, the project has developed properly and continues to grow.

History

The development of the project is surrounded by controversy. Initially, management was led by Johann Gevers, a friend of the founders. However, this relationship deteriorated into a dispute over intellectual rights between the founders and the company. The quarrel turned into a high profile lawsuit that ended with the replacement of Gevers and the entire board of directors.

Months later a second feud erupted between the Tezos organization and its members with the adoption of KYC/AML policies. The new leadership deemed the new policies were necessary to meet regulatory compliance. But they cut off existing members who lost their credentials and could not authenticate their membership.

Both of these disagreements damaged the reputation of the project and distracted from its potential.

Governance

The biggest sell point of Tezos  is democratic consensus or shared decisions. It achieves protocol upgrades consensus through On-Chain governance; stakeholders vote on all proposed changes. This method produces a “Legitimate” choice, which doesn’t mean the best. This is not unlike EOS where the community votes on rules, but like EOS, the process is prone to manipulation by the majority of stakeholders.

Technology

Tezos contains a natively developed blockchain that contains its own XTZ “Tezzies” token. It uses (Liquid) Proof-of-Stake consensus to validate transactions through designated “bakers.” This is similar to delegates used by EOS (21) , Lisk (101), Tron (27) and others, except that Tezos doesn’t have a fixed number. A main feature of Tezos is its automated self-ammending blockchain that seeks and neutralizes threats or divergent smart contracts. Tezos launched its mainnet in September 2018, and after shaking off its scandals its team is focused on development. Its software shop TezTech is working on trustless scaling, APIs, software libraries, and custody solutions.

Analysis

Tezos pursues the holy grail in cryptocurrency – true democratic consensus. It strives to ahieve it through a modified use of delegated proof-of-stake. However, this is an almost impossible task as large interests, like banks or exchanges, can gain majority of ownership of stakes. And they will gain a majority of voting rights and control decisions.

At first glance, Tezos is an unimpressive project; not much more than a glorified version of Ethereum or EOS. However, the value of the project lies in the commitment of its leading team. Like Tron, their marketing is a driving force behind their success. It is this and its continued development that keeps Tezos on the 20th place or top one percent by marketcap.

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