Clear DefinitionsTezos
2 min read
Pronunciation
[tez-ohs]
Analogy
Think of Tezos as a self-improving highway system where the rules of the road and infrastructure improvements are voted on by the drivers themselves (token holders), with voting power proportional to their investment in the system. Once approved, road crews (developers) can upgrade the entire highway network without closing it down or creating separate branching roads (forks). The highway also features special safety systems (formal verification) that mathematically prove vehicles are following their intended routes.
Definition
A self-amending blockchain platform that incorporates formal on-chain governance mechanisms to smoothly upgrade the protocol without requiring hard forks. Tezos uses a liquid proof-of-stake consensus algorithm and was designed with security, upgradability, and institutional use cases in mind, particularly focusing on formal verification of smart contracts.
Key Points Intro
Tezos distinguishes itself through four core features that form the foundation of its blockchain architecture.
Key Points
Self-Amendment: On-chain governance process that allows protocol upgrades without contentious hard forks.
Liquid Proof-of-Stake (LPoS): Consensus mechanism allowing token holders to delegate their staking rights without transferring ownership.
Formal Verification: Programming approach that mathematically proves the correctness of smart contracts before deployment.
Michelson Language: Smart contract language designed specifically for security and formal verification.
Example
A financial institution wants to issue security tokens that comply with evolving regulations. On Tezos, they can develop formally verified smart contracts that mathematically prove compliance with current rules. When regulations change, the Tezos governance process can upgrade the protocol to accommodate new requirements without disrupting existing applications. Token holders vote on the proposed changes, and upon approval, the network smoothly transitions to the new rules without splitting into competing chains.
Technical Deep Dive
Tezos implements a multi-stage governance process called the "amendment process" consisting of four phases: Proposal, Exploration, Testing, and Promotion. Proposals require support from a supermajority of bakers (validators) to proceed through each phase. The Liquid Proof-of-Stake consensus allows XTZ (tez) holders to either become bakers by staking at least 6,000 XTZ (one roll) or delegate their staking rights to existing bakers without transferring custody. Tezos smart contracts are primarily written in Michelson, a stack-based language designed for formal verification, or higher-level languages like LIGO, SmartPy, or Morley that compile to Michelson. The platform employs account abstraction with two account types: implicit accounts (user wallets) and originated accounts (smart contracts). Each Tezos block is baked (produced) approximately every minute, with finality achieved after several confirmations.
Security Warning
While Tezos emphasizes security through formal verification, not all contracts on the platform undergo this rigorous process. Users should verify that smart contracts they interact with have been formally verified and audited, particularly for financial applications handling significant value.
Caveat
The focus on formal verification and the use of less common programming languages like Michelson can create a steeper learning curve for developers compared to platforms using more widespread languages. Additionally, while the governance system provides a structured approach to upgrades, it can also lead to slower implementation of new features compared to more centralized development models. The requirement of 6,000 XTZ to become a baker may also limit direct participation in consensus for smaller token holders.
Tezos - Related Articles
No related articles for this term.