Tezos (XTZ) ICO Review & Analysis – Tezos ICO Review

Tezos

Formalizing Blockchain Governance

Network Token

Tezos is a new platform for smart contracts and decentralized applications.

Tezos is a blockchain that can evolve by upgrading itself. Stakeholders vote on amendments to the protocol, including amendments to the voting procedure itself, to reach social consensus on proposals. Tezos supports smart contracts and offers a platform to build decentralized applications.

On-Chain Governance – In Tezos, all stakeholders can participate in governing the protocol. The election cycle provides a formal and systematic procedure for stakeholders to reach agreement on proposed protocol amendments. By combining this on-chain mechanism with self-amendment, Tezos can change this initial election process to adopt better governance mechanisms when they are discovered.
Security – The Tezos blockchain was designed to facilitate formal verification, which helps secure smart contracts and avoid buggy code.
Proof of Stake – Participants (“nodes”) in decentralized, peer-to-peer networks provide the necessary computational resources that keep a network up and running. Proof-of-Stake (PoS) is the mechanism by which the various participants in Tezos reach consensus on the state of the blockchain. Unlike other PoS protocols, any stakeholder can participate in the consensus process in Tezos and be rewarded by the protocol itself for contributing to the security and stability of the network.

“No matter what innovations other protocols produce, it will be possible for Tezos stakeholders to adopt these innovations. Furthermore, the ability to solve collective action problems and easily implement protocols in OCaml will make Tezos one of the most reactive cryptocurrencies.”

Exchanges

Gate.io | HitBTC | Coinone

Positives

One of the biggest features that we notice puts Tezos ahead of the rest in terms of future-proofing the blockchain is the whole idea behind decentralized governance. We’ve seen how Blockchains such as Ethereum and Bitcoin have been held back by the inability for developers to agree on certain upgrades/changes to the network, resulting in countless forks that create very similar blockchains with really nothing noteworthy to add to the ecosystem. Tezos avoids all of this by enabling anybody to propose an upgrade/change. Consensus participating is rewarded and Developers are then compensated for implementing these changes should they pass the vote. There is no reason to fork Tezos, any change can be voted on in a civil and rewarding manner.
Now, Tezos isn’t trying to reinvent the wheel here. Smart contracts work, Decentralized applications work, a lot of things work across many different blockchain projects. One of the more “Unique” features that Tezos has is “Baking”. In a nutshell “Bakers validate all transactions and add them to the blockchain. If a baker behaves dishonestly, the protocol has a built-in mechanism that can cause them to lose their security deposit.” This whole baking mechanism speaks volumes of the governance model that Tezos is working on. Honest, on-time, provable transaction verification. We encourage those who are interested to learn more about Baking, at first it sounds a bit like Jury Duty, but it’s essential to the networks consensus
From an investors standpoint, if you were jumping into crypto for the first time and you’d never put any money into projects such as Ethereum and Bitcoin, Tezos is pretty attractive when you assess the “room to grow” potential. Tezos is not only a strong competitor to these leading platforms but definitely has the most room to grow in a short amount of time. Ethereum has had a number of forks due to developer disagreements, Bitcoin obviously doesn’t suit Dapps or Smart Contracts and NEO has already gone up over 100,000% since their early days. For the average investor, the boat has sailed on a lot of these older projects, Tezos on the other hand is still young and has a lot more to show off yet.
For Developers, Tezos has a huge amount of resources available for anybody looking to utilize the network. Speaking of development, Tezos has recently launched their “BetaNet” which is a huge leap forward for the state of the network and it’s no surprise that Tezos was this quick to develop this milestone, their GitLab activity is as consistent as can be. (They seem to have left GitHub, so don’t go over there if you are looking for development progress.) It’s obviously all hands on deck for the Development Team right now.
At this point it’s pretty safe to say that Tezos has secured their position as a potentially disruptive project to the space. They were able to secure a phenomenal amount of funding ($200m+) during their ICO and investor sentiment from what we can see on Social media is still very strong. Not a lot of ICOs have done well lately (August 2018) and some simply don’t have the appeal that attracts investors anymore. Tezos is in a unique position where they can really make a difference to the Smart Contract/Dapp space if they continue being this consistent. If anything, the legal issues they faced earlier on have given them the opportunity to watch and learn from their competitors shortcomings/issues.

Concerns

One concern we have to address would be the process in which the ICO was handled. Due to a bunch of legal “stuff” that we won’t go into, investors were basically left with no way to access their XTZ tokens despite having invested months prior. Even when these issues were settled, investors were then prompted to verify their identities via KYC/AML which was an issue for those who either didn’t have the required documentation or those who were simply not willing to hand over potentially sensitive information, after all, KYC was not part of the deal during the ICO. All of that drama aside, investors eventually gained access to their XTZ tokens but due to the lengthy wait on release, this caused a lot of impatient investors to dump their tokens to simply retrieve their investments. Now, this should not be considered a concern with the Tezos project itself as it is a fantastic project, we simply list concerns that others may have and this is something we need to mention. Glad we got that out of the way.
In terms of competition, we don’t really need to go into depth with the potential competitors here. Ethereum currently has the stranglehold on a lot of startups/projects due to their first mover advantage in the space. Plenty of other functionally similar projects such as NEO, EOS, Lisk and many more are all fighting for developer adoption. On a technical level, Tezos does have some impressive attributes. Tezos is built upon the idea that the entire platform is dependent on decentralized governance meaning the blockchain won’t need to be forked in order to make upgrades, something several other blockchains are currently struggling with resulting in countless, useless forks that will most likely never garner adoption (See Ethereum..) Despite the competition Tezos faces, there are enough technical differences here that allow it to hold its own. Competitors are something investors will be concerned about but with careful research, Tezos has it’s own advantages.
At the time of writing (August 2018), Tezos is still being actively developed despite the ICO being held more than a year ago. This may have a few investors concerned about the speed of development but it’s worth mentioning that due to previous points about “legal mumbo-jumbo”, development has been somewhat held back until recently. Tezos already has a Betanet up and running with several blockchain explorers already keeping track of the network. Wallets are not yet officially available but several wallets are readily available by third-parties. In our opinion, it’s best if Investors put the past 12 months behind them and focus on the here and now. Tezos had a rough start but they’ve shown nothing but determination with their development.