What is Tezos?

Tezos is a high-performing blockchain and open-source platform for assets and applications, with a strong focus on code security, on-chain governance, and decentralization. Tezos 2.0, the upcoming step in the evolution of Tezos, aims to improve scalability (via layer 2s), composability, and to implement support to mainstream programming languages (like Javascript, Typescript, Python, and many others).

Why it matters

First proposed in 2014 and launched in 2018, the Tezos Mainnet has a proven track record of running uninterrupted ever since, having earned a strong reputation for technical excellence and a supportive community.

Key features

Tezos’ LPoS (Liquid Proof-of-Stake) consensus mechanism enables any stakeholder to take part, directly or by delegation, in the consensus process, and to be rewarded for securing the network. Rather uniquely, Tezos’ on-chain governance system also enables stakeholders to create and vote on protocol upgrade proposals. This pioneering system allows the protocol to self-amend and upgrade itself without leading to a split (or fork) in the blockchain, empowering the community without slowing down innovation.

Token utility

Tezos is an open-source, energy-efficient blockchain designed to evolve through self-amendment. Its native token, Tez (XTZ), provides utility in three main ways: network fees, staking, and governance.

Ecosystem notes

Tezos provides tools that allow high scalability on a layer above the primary Tezos blockchain, known as layer 2. Smart Rollups can run large amounts of logic and handle large amounts of data in a separate environment without slowing Tezos itself down. The Data Availability Layer provides high-throughput data to Smart Rollups.

The framework for these layer 2 systems is enshrined in the layer 1 protocol. All layer 2 activity is secured by verifiable commitments and attestations on layer 1.

Risks / considerations

The risks associated with Tezos (XTZ) and its founders, Arthur and Kathleen Breitman, center heavily on past legal and regulatory challenges, ecosystem governance disputes, and ongoing technological competition.Here are the specific, actionable risk factors for Tezos:Legal and Regulatory Scrutiny: Like many early Initial Coin Offerings (ICOs), the $232 million Tezos fundraiser faced severe regulatory scrutiny. Following class-action lawsuits and claims of unregistered securities sales, the Swiss-based Tezos Foundation reached a $25 million legal settlement, though the question of whether the ICO was an unregistered securities sale was ultimately left unresolved. Future regulatory shifts still pose a risk to how XTZ is classified globally.Founder Liability and Reputation: Arthur and Kathleen Breitman’s close association with the project's inception exposes them personally to civil and regulatory liabilities. In the past, Arthur Breitman was sanctioned by FINRA for making unwarranted forecasts in a 2015 business plan and concealing his early ties to Tezos while working at Morgan Stanley.