Tezos is a smart-contract blockchain platform where protocol changes are decided via on-chain governance; XTZ (tez) is used for fees, interacting with dApps, and staking.

What is Tezos’ core idea?

A built-in upgrade mechanism: the network can adopt protocol upgrades through a formal proposal-and-vote process, reducing the need for contentious hard forks.

What are baking and delegation in Tezos?

Baking is a validator (baker) producing/endorsing blocks and earning rewards; XTZ holders can delegate their stake to a baker without handing over control of their funds, to receive a share of rewards (minus the baker’s fee).

Does XTZ have a maximum supply?

Tezos has no hard maximum cap; issuance is inflationary as rewards for securing the network.

What are the risks of staking/delegation?

Key risks include choosing an unreliable baker (fees/irregular payouts) and protocol penalties for malicious validator behaviour (e.g., double baking/double signing), which can result in slashing/penalties and potential losses.

What is XTZ used for in the Tezos ecosystem besides trading?

It’s used to pay fees, interact with dApps, secure the network via staking, and serve as a base unit of account within the network.

What is Tezos (XTZ)

Tezos (XTZ) is a Layer-1 blockchain with smart contracts and on-chain governance.

Launch 17.09.2018 Tezos (native)

Who created it

Arthur Breitman; Kathleen Breitman (Tezos / Dynamic Ledger Solutions, DLS).

Why it was created

A self-amending blockchain: protocol changes are adopted through an on-chain proposal-and-voting process, so the network can evolve “from within” with a lower risk of contentious hard forks.

How it’s used

Paying network fees for transactions and smart-contract execution on Tezos
Staking/delegation to participate in consensus and earn rewards
Taking part in on-chain governance: voting on upgrades and protocol parameters
Using Tezos dApps (DeFi/NFTs/asset tokenisation) with XTZ as a base asset and unit of account

Risks

High price volatility: XTZ behaves like a high-risk altcoin and can drop by double-digit percentages over short periods.
Inflationary issuance (no hard cap): if you don’t stake/delegate, your share of the overall supply can be diluted by new issuance.
Policy/yield changes via protocol upgrades (including mechanisms such as Adaptive Issuance): reward rules can change through votes and updates.
Legal and regulatory overhang: Tezos’ ICO faced US securities lawsuits and a subsequent settlement (a marker of regulatory sensitivity for investors/platforms).
Governance/reputation risk: historically, there were high-profile disputes over control and governance after the ICO, affecting timelines and market perception.
Ecosystem dependency on Tezos Foundation resourcing decisions: grants and treasury strategy can materially influence development pace and the ecosystem’s financial runway.

FAQ

What is Tezos (XTZ)?: Tezos is a smart-contract blockchain platform where protocol changes are decided via on-chain governance; XTZ (tez) is used for fees, interacting with dApps, and staking.
What is Tezos’ core idea?: A built-in upgrade mechanism: the network can adopt protocol upgrades through a formal proposal-and-vote process, reducing the need for contentious hard forks.
What are baking and delegation in Tezos?: Baking is a validator (baker) producing/endorsing blocks and earning rewards; XTZ holders can delegate their stake to a baker without handing over control of their funds, to receive a share of rewards (minus the baker’s fee).
Does XTZ have a maximum supply?: Tezos has no hard maximum cap; issuance is inflationary as rewards for securing the network.
What are the risks of staking/delegation?: Key risks include choosing an unreliable baker (fees/irregular payouts) and protocol penalties for malicious validator behaviour (e.g., double baking/double signing), which can result in slashing/penalties and potential losses.
What is XTZ used for in the Tezos ecosystem besides trading?: It’s used to pay fees, interact with dApps, secure the network via staking, and serve as a base unit of account within the network.