Tezos (Tay-zos) is an open-source blockchain-based platform designed to write smart contracts and deploy decentralised apps (dApps). It joins the likes of Bitcoin, Ethereum and Litecoin in disrupting the financial sector by decentralising control of global money.
The Tezos platform is linked to one of the fastest-growing altcoins (XTZ) on the market which recently broke into the Top 10 cryptoassets in existence as of January 2025. Tezos is a force to be reckoned with as it goes up against the dominant Ethereum to grab space in the smart contracts and dApps domain.
What is Tezos?
Tezos is a Delegated Proof of scale (DPoS) altcoin which was created for the execution of smart contracts and decentralized applications (DApps). Because it is a PoS coin, it cannot be mined. Instead, tezzie tokens are used to reward XTZ ‘bakers’ when they participate in its proof of stake (PoS) consensus mechanism.
Tezos bakers perform the same function as miners do by securing and managing the network, verifying transactions and distributing block rewards. However, instead of using expensive mining hardware and an excessive amount of electricity to perform these actions, Tezos bakers do their thing through the resource-light PoS consensus. Smart contract platforms like Ethereum use Proof of work (PoW) which is resource intense.
Did you know?
Tezos baking involves validating Tezos network transactions. It’s called mining for Proof of work (Pow) blockchains like Bitcoin. Validating for Proof of stake (PoS) blockchains like Tezos is referred to as ‘baking blocks’.
Tezos bakers earn tez (XTZ tokens) for their efforts. To start baking Tezos, you need at least one ‘roll’ of Tezos. One roll was equal to 10 000 XTZ but it’s since dropped to 8000 XTZ after a Tezos community vote.
Tezos baking is no simple task. If you don’t have the time or knowledge to bake or if you’re in it to earn passive income, you can delegate the Proof of scale (DPoS). The Tezos baker you delegate your baking to charges you a fee for the service.
Tezos Fast Facts
| 🟩Tezos | 💡Fact |
|---|---|
| Original authors | Arthur Breitman, Kathleen Breitman |
| Native currency | Tez |
| Symbol | XTZ |
| White paper | Tezos - a self-amending crypto-ledger |
| Written in | OCaml |
| Source model | Open source |
| Timestamping scheme | Proof-of-stake |
| Block time | 1 minute |
| 📅AS AT MID-FEBRUARY 2025 | |
| Circulating supply | 760 267 584 XTZ |
| Exchange rate | 24-hour low = $4.20 / 24-hour high = $4.85 |
| Market cap | $3 517 348 536 (4.24%) |
| Market rank | #23 |
| Market dominance | 0.23% |
10 Fast Facts about Tezos
- Tezos (XTZ) is a blockchain network linked to a digital token, called a tez or a tezzie. The symbol for Tezos is XTZ.
- Tezos is a new decentralised blockchain that governs itself by establishing a true digital commonwealth.
- Tezos is not based on the mining of tez. Instead, token holders receive a reward for ‘baking’ which involves taking part in the Proof of stake (PoS) consensus mechanism.
- Proof of stake (PoS) makes the entire mining process virtual and replaces miners with validators. PoS is not resource-intense like PoW.
- Tezos is designed to write smart contracts and deploy decentralised apps (dApps) using the decentralised ledger protocol.
- Tezos has been coded using OCaml which is a general purpose programming language with an emphasis on expressiveness and safety.
- Michelson is the domain-specific language used to write smart contracts on the Tezos blockchain. This language is stack based and strongly typed. Michelson was designed to facilitate formal verification, allowing users to prove the properties of their contracts.
- Tezos mitigates contentious hard forks via self-amendments and on-chain governance. Self-amendment helps in upgrading the blockchain without undergoing a hard fork. On-chain governance simply means voting on the platform over a proposed amendment.
- Co-founders, Arthur Breitman and Kathleen Breitman started developing Tezos in 2014 with a core group of developers. The company’s headquarters are in Switzerland.
- The developers raised $232 million in an uncapped ICO in just two weeks. The initial release of the Tezos platform was on 30 June 2018.
What makes Tezos unique?
What makes Tezos unique is the smart contract and dApp platform wasn’t created as a hardfork of Bitcoin or as an extra layer on top of an existing cryptocurrency.
Another key difference is Tezos is backed by a global community of validators, researchers and builders and is governed through a true digital commonwealth. Tezos provides an advanced infrastructure where users can vote on upgrades without risking the likelihood of a hardfork.
Launched in 2018, Tezos competes with Ethereum, Hyperledger, Open Transactions and EOS. They’ve all been created as a platform to write smart contracts and deploy dApps.
Did you know?
A commonwealth is a group that chooses to be linked together because of their shared goals and interests. Tezos is driven by a true global commonwealth which is enabled through the protocol design to make decisions together to govern the platform and improve it over time.
Is Tezos a good Investment?
Trading cryptocurrencies is high-risk and speculative, mainly due to their volatility. It’s important that you understand the risks before you start trading. That being said, Tezos does appear to be a good investment because of the unique benefits it brings to the market.
The Tezos self-amending feature and its use of Delegated proof of scale (DPoS) consensus gives it a powerful advantage over Ethereum which is currently the leading cryptocurrency for smart contracts and decentralised apps.
Top 3 reasons why Tezos has a bright future
- Tezos adopted a self-governing protocol which reduces the risk of hardforks. While hardforks bring innovation and energy to the cryptocurrency world, they can introduce a negative force that creates division and chaos.
- Tezos adopted the Dedication proof of scale (DPoS) consensus from the beginning. Other smart contract platforms like Ethereum are playing catch up and considering switching from PoW to PoS.
The benefits of Proof of scale are numerous. Here are a few:
- scalability and speed
- real-time voting security
- resource efficient; requires less hardware and significantly less electricity
- flexibility and creative problem-solving
- better distribution of rewards
- block producers incentivised to ‘behave’
- Tezos survived the cryptocurrency bear market of 2018-2019 and experienced an upsurge in early 2025, achieving record highs on tez. Tezos’s token (XTZ) rose 85% in the first five months of 2025; adding to gains made the year before and giving Tezos a market capitalisation of almost $1.8 billion.
In May 2025, XTZ surprisingly had more trading volume relative to market cap than all other listed cryptocurrencies, including Bitcoin.
Forbes picked up on the new cryptocurrencies potential last year, noting in an article the “Minor cryptocurrency is on track to smash Bitcoin in 2025”.
“At the beginning of the year (2020), Tezos was the 15th most-valuable cryptocurrency by market capitalisation, according to CoinMarketCap data, but has now broken into the top ten – and could move quickly past some rivals if its run continues.” – Billy Bambrough, Forbes contributor
How much is Tezos’s coin worth?
The price of Tezos’ digital coin is highly affordable when compared to Bitcoin and Ethereum. This makes Tezos the perfect entry-level cryptocurrency and profitable to boot if current market projections hold true.
Price comparison: Coin Desk 17 February 2025
| ₿Bitcoin (BTC) | 💸Ethereum (ETH) | ₿Bitcoin Cash (BCH) |
| $51 337 | $1 817 | $ 712 |
| 🪙 (LTC) | 💵EOS (EOS) | 💰Tezos (XTZ) |
| $ 226 | $ 4.75 | $ 4.64 |
Factors driving Tezos’s worth
Most cryptocurrencies have a supply cap. For example, Bitcoin has a cap of 21 million. Tezos is one of the new-age cryptocurrencies that doesn’t have a maximum supply. The reason why Tezos can get away with a finite supply of tokens is because it has a valid use, namely writing smart contracts and deploying dApps.
About 80% of all the XTZ in circulation are currently in use for Tezos baking (staking). This means there is less XTZ available on the order books of exchanges. Regardless, the demand for XTZ is on the rise as well as the demand for the Tezos blockchain.
This upsurge is largely attributed to its native smart contract language which facilitates formal verification. This concept gives smart contracts an extra layer of security by allowing high-value transactions to be tested before they are published on the blockchain.
Its practical use for formal verification is a key driver of the demand for Tezos tokens and why the altcoin can sustain a finite supply of tokens.
Why Tezos is so popular?
The business world is waking up to the benefits of smart contracts as it looks to do away with fallible paper contracts. Any cryptocurrency that owns the smart contract space will undoubtedly be worth its weight in gold.
So far, the business world is very excited over what Tezos has to offer as a smart contracts platform – rather than a transaction coin – and this interest is driving up the value of its native currency, the tez (XTZ).
Inclusive innovation
Like Ethereum, Tezos was created for the execution of smart contracts and deployment of dApps. However, the developers wanted a blockchain that was able to incorporate future innovations without risking a hardfork that could divide its community. Its self-governing concept offers many benefits, including an environment ripe for innovation and creativity.
Self-governing protocol
Tezos is a smart contract platform built on the Delegated Proof-of-Stake (DPoS) consensus protocol. The latter allows Tezos to evolve over time without the risk of forks. This protocol design is known as a self-amending cryptographic ledger.
The concept of self-governance is a distinguishing feature of Tezos. The early blockchains – including Bitcoin – rely on development teams more so than the mining communities to formulate new design choices. Tezos offers something different where the decision-making process is left to users on its network.
Tezos has established governance rules for users to approve its protocol upgrades. Once approved, the upgrades are automatically deployed on the network. Tezos token holders vote on pending protocol developments. Developers attach an invoice when they propose a protocol upgrade and are paid out to their address when the upgrade is approved and incorporated on the network.
The offshoot of this approach is users are incentivised to participate in the core development process. More importantly, there is little likelihood of developers attempting a hardfork off Tezos’s blockchain. Not only is the development process autonomous but maintenance of the Tezos network remains decentralised.
What are smart contracts?
Smart contracts are the future of business. They are digital programmes that automatically execute, control and document legally-relevant events and actions according to the terms of the contract or an agreement.
Smart contracts are surging in popularity because they reduce the need for intermediators and arbitrations as well as enforcement costs and fraud losses. Smart contracts also reduce malicious attacks or accidental exposure to criminal activity and fraud.
How a smart contract works is the code that captures the terms of agreement only exists across a distributed, decentralised blockchain network. It’s a self-executing contract were the terms of agreement between a buyer and seller of a business or asset are directly written into lines of code.
Currently, the most popular platform for writing smart contracts is Ethereum. However, a platform like Tezos offers additional benefits through its DPoS consensus and is being recognised as an excellent alternative to Ethereum.
What are dApps?
dApps are decentralised apps. Short for application, an app is a piece of software that you can access and use through the Internet, as opposed to software installed on your computer.
The only difference between a dApps and a normal app is dApps are run on a peer-to-peer network such as a blockchain. What this means is decentralised apps doesn’t run on one server but rather on thousands of computers scattered around the world. They are controlled by business automation software and only function if specific parameters are met.
Decentralised means no one person or entity has control of the network. The networks are open-source and operate without any central entity controlling it. Its data and records must be made public and you need a cryptographic token to help keep the network secure.
dApps are made of smart contracts and rely on the peer-to-peer network to ensure they work, even if individual computers or parts of the network go down.
Did you know?
Cryptographic tokens – also called crypto assets – are a special kind of virtual currency that reside on the blockchain. Crypto tokens denote programmable assets or access rights that are managed by a smart contract and an underlying distributed ledger.
Crypto tokens can only be accessed by the person who has the private key for that address and can only be signed using this private key. They are typically used to fundraise for crowd sales.
Tezos versus Ethereum
Like Ethereum, Tezos is designed to be used to write smart contracts and deploy decentralised apps (dApps). In fact, according to the developers, the name Tezos comes from the ancient Greek worked for “smart contracts”.
Ethereum is currently the most popular platform for smart contracts and dApps but Tezos is likely to challenge its position, largely because the developers took the altcoin one step further by allowing participants to directly control the rules of the network.
This gives the Tezos network greater flexibility and allows it to evolve organically. In turn, self-governance enables scalability and speed. The latter is a key reason why Ethereum is a strong challenger cryptocurrency to Bitcoin.
| ✳️Tezos | 🪙Ethereum | |
|---|---|---|
| Smart contracts platform Peer-to-peer transactions Built-in governance Facilitates formal verification | Concept | Smart contracts platform |
| Delegated proof of stake (DPoS) | Consensus | Proof of work → Proof of stake |
| Tezzies (XTZ) | Native currency | Ether (ETH) |
Delegated proof of stake (DPoS) versus Proof of work (PoW)
Tezos launched with a Delegated proof-of-work (DPoS) consensus from day one. Ethereum launched with Proof of work (PoW) and is now looking at switching from to Proof of Stake (PoS).
One of the reasons Tezos survived the cryptocurrency bear market is, in part, because of its unique Proof of stake mechanism.
| ✅Proof of stake (PoS) | ☑️Proof of work (PoS) |
|---|---|
| PoS concept states that a person can mine or validate block transactions based on how many token coins he or she hold. The more coins you have, the more mining power you have. | PoW concept requires proof that work of some kind has occurred before a person’s blocks can be accepted by others. |
| Delegated PoS means that Tezos token holders can delegate someone else to validate on their behalf if they don’t have the time, knowledge or resources to do it themselves. | Miners need to solve computational puzzles - each with a different solution - and are compensated for their efforts in the form of coins on proof of work. |
| PoS involves virtual mining for validations, rather than physical mining. To participate on a platform that uses DPoS, you use the native currency of the altcoin as opposed to spending money on electricity and expensive mining hardware. | PoW requires a significant but feasible amount of effort in order to deter frivolous or malicious uses of computing power. This includes spam emails or launching denial of service attacks. |
| PoS is also more effective in preventing attacks on the network because it enables economic penalties. This means it’s vastly more expensive to attack a PoS network than a PoW network. | PoW is an effective method of maintaining consensus across a peer-to-peer network but it is resource intensive. It requires more electricity than a small country for Ethereum miners to prove computational transactions. |
| The risk of centralised cartels forming is also greatly reduced with PoS because economies of scale are much less of an issue. In other words, PoS makes mining accessible to a wider audience and there is no need for miners to collude on mining efforts. | |
Did you know?
It’s estimated that both Bitcoin and Ethereum burn over $1 million worth of electricity and hardware costs per day as part of their consensus mechanism.
Who are the founders of Tezos?
Arthur and Kathleen Breitman
Arthur wrote the Tezos white paper in 2014 under the pen name LM Goodman, as a nod to Satoshi Nakamoto. He argued that one of Bitcoin’s biggest failings was the lack of a governance process that invited contributions from the community who use the peer-to-peer network. Arthur also had an issue with the fact that new tokens couldn’t be issued through the original blockchain.
The Breitman’s founded a startup called Dynamic Ledger Solutions. The startup was tasked with writing the code that would underpin the Tezos protocol. Dynamic Ledger Solutions was then bought by the Tezos Foundation so that all the intellectual property would be owned by Tezos.
What is XTZ?
XTZ is the digital token of Tezos. It’s also known as a tez or tezzie.
Tez is used to power the Tezos ecosystem in the same way Ether is used to power the Ethereum network. Currently, there are about 750 million XTZ in circulation.
Tezos hasn’t announced how many XTZ will be released in total. Apparently, the developers believe that Tezos will never reach its capacity limits.
Tezos had a very successful Initial Coin Offering (ICO) which started in July 2017. It went on to earn $232 million, making it one of the largest ICOs of all time. However, this was followed by numerous delays, lawsuits and price declines.
The price of Tez (XTZ) more than tripled between October 2019 and February 2025 and reached record highs in early 2025. This lead to renewed speculation about its future investment potential.
In Summary
Tezos is a third-generation altcoin which means the developers have had the benefit of seeing what the frontrunner cryptocurrencies have done well and badly, and the opportunity to create a better version of what exists in the market.
Tezos drew attention to itself with an impressive IOS. It raised $232 million in just two weeks, making it the largest Initial Coin Offerings (ICO) of all time. The developers were then hit with a series of lawsuits which delayed the launch of the smart contracts platform.
Tezos held on through the bear market of 2018/19 and rallied in 2025, setting a new all-time high above $4.47 in August 2025. It’s been one of the best-performing cryptocurrencies in the last year and is proving itself as worthy of more XTZ long positions.
What’s going for Tezos is its DPoS consensus which gives it scalability and speed, its self-governance protocol which enables a stable ecosystem and its position as a premier smart contracts and dApps platform. Demand for tez (XRP) is rising and demand for Tezos’s smart contracts technology is rising.
By all accounts, the future looks bright for Tezos. However, in the cryptocurrency world, one must always proceed with caution when trading any token.
Disclaimer
Trading cryptocurrencies carries a high level of risk and may not be suitable for all retail traders and investors. Consider your capacity for risk before deciding to trade cryptocurrencies. There is the possibility that you could lose some or all of your initial investment so you should not invest money that you cannot afford to lose.
The information in this article is for education purposes only. Forex Trading Africa will not accept liability for any financial loss which may arise directly or indirectly from use of or reliance on information contained in this article.
Frequently Asked Questions
What is the block time of Tezos?
Block time of Tezos is 1 minute.
What is XTZ?
XTZ is the digital token of Tezos. It’s also known as a tez or tezzie.
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