History of Tezos

The Origins and Development of Tezos (XTZ)

Tezos (XTZ) emerged as a blockchain project designed to address governance challenges and smart contract security issues inherent in earlier blockchains like Bitcoin and Ethereum. The project was co-founded by Arthur and Kathleen Breitman, with its whitepaper released in 2014 under the pseudonym "L.M. Goodman." The vision behind Tezos was to create a self-amending blockchain capable of implementing protocol upgrades without the need for contentious forks, an issue that had plagued cryptocurrencies such as Bitcoin and Ethereum in earlier years.

The 2017 ICO and Legal Challenges

Tezos conducted one of the largest initial coin offerings (ICOs) in 2017, raising approximately $232 million in Bitcoin and Ethereum. However, post-fundraising, internal conflicts within the Tezos Foundation surfaced. A dispute between the Breitmans and Johann Gevers, the then head of the foundation, delayed the token distribution. These governance issues sparked investor frustration and regulatory scrutiny, leading to multiple lawsuits in the U.S. alleging an unregistered securities offering. Although the legal disputes were eventually settled, early controversies cast uncertainty over Tezos' future in its formative years.

On-Chain Governance and Early Adoption

One of Tezos’ defining characteristics was its self-amending architecture. Unlike many blockchains that require hard forks for upgrades, Tezos enables protocol improvements via an on-chain governance mechanism, where token holders vote on proposed changes. This design positioned Tezos as a dynamic and adaptable blockchain, although adoption lagged due to technical complexity and competition from Ethereum’s rapidly expanding ecosystem.

Despite its innovative governance model, Tezos faced challenges in attracting decentralized application (dApp) developers. While Ethereum had already established dominance, newer competitors such as Polkadot and Cardano entered the market with similar governance-focused capabilities. If you're interested in how governance plays a critical role in blockchain projects, you may want to explore Cardano’s governance evolution here.

Network Upgrades and Smart Contract Evolution

Over time, Tezos successfully executed multiple network upgrades refining its consensus mechanism, reducing gas fees, and improving smart contract functionalities. Despite these advancements, adoption among developers remained moderate, with some critics arguing that Tezos' focus on formal verification—a mathematical method to ensure smart contract security—introduced unnecessary complexity.

Tezos also sought entry into the DeFi space, competing with platforms like Uniswap and Chainlink. To understand how other projects have navigated technological evolution in the DeFi space, consider this article on Uniswap’s development here. However, competition from Ethereum Layer-2 solutions continued to limit Tezos’ traction.

While Tezos has managed to establish itself as a notable blockchain, its unique features have yet to translate into mass adoption on the scale of Ethereum, highlighting the ongoing challenges the project faces in achieving long-term dominance.

How Tezos Works

How Tezos (XTZ) Works: On-Chain Governance, Liquid PoS, and Upgradability

Tezos (XTZ) is structured around an innovative self-amending blockchain that enables smoothly integrated protocol upgrades, reducing hard fork risks. This architecture is built on three core components: on-chain governance, the Liquid Proof-of-Stake (LPoS) consensus mechanism, and the network’s formal upgrade process.

On-Chain Governance and Self-Amending Process

One of Tezos' primary differentiators is its native governance model, where protocol upgrades go through an on-chain voting process. Unlike blockchain networks that require node operators to adopt updates manually—or risk forking—Tezos integrates governance decisions directly into the protocol. Developers submit upgrade proposals, which are reviewed and voted on by network validators (bakers). If approved, these upgrades execute automatically, minimizing disruption.

However, a major concern is voter apathy among stakeholders, which can slow the decision-making process or result in governance decisions being influenced by large stakeholders rather than a broad community consensus. Other governance-heavy blockchain networks, such as Decoding Cardano's Innovative Governance Model, face similar challenges in maintaining active participation.

Liquid Proof-of-Stake (LPoS): Validators and Delegators

Tezos employs a version of Proof-of-Stake (PoS) called Liquid Proof-of-Stake (LPoS), which grants flexibility to token holders who don’t want to run their own validation node. In this system:

• Bakers act as validators by staking a minimum of XTZ and participating in block validation.
• Delegators can lend their XTZ stake to bakers without transferring ownership, earning rewards without directly participating in governance.

LPoS enhances scalability and security but also invites certain risks. Large bakers who accumulate significant delegations gain more governance power than smaller participants, potentially leading to network centralization concerns. This is comparable to issues observed in other PoS ecosystems, where validator dominance has raised questions about decentralization.

Smart Contracts and Network Upgradability

Tezos supports smart contracts and decentralized applications (dApps) through its Michelson programming language, designed with formal verification capabilities. This makes it particularly suitable for high-assurance applications like financial contracts or tokenized assets.

The Tezos protocol is designed for seamless upgrades, eliminating the need for contentious hard forks. This adaptability has allowed Tezos to integrate innovations rapidly—while also presenting drawbacks in security considerations, as rapid protocol changes may introduce unforeseen vulnerabilities.

Challenges and Criticisms of Tezos’ Model

While Tezos' self-amending mechanism minimizes governance friction, it is not immune to concerns:

• Voter disengagement can lead to a minority controlling decisions.
• LPoS centralization risks may threaten network fairness.
• Michelson’s complexity limits developer adoption compared to smart contract languages like Solidity.
• Execution risks in upgrades could expose vulnerabilities due to rapid changes without extensive vetting.

These factors shape how Tezos evolves in comparison to other governance-focused blockchain projects.

Use Cases

Tezos (XTZ) Use Cases: From Smart Contracts to On-Chain Governance

Self-Amending Blockchain and Governance Model

One of Tezos' defining use cases is its self-amending blockchain, a feature that allows protocol upgrades without hard forks. This is achieved through on-chain governance, where XTZ holders can propose, vote on, and implement changes. While this system promotes decentralization and reduces contentious splits, voter apathy and staking centralization remain concerns. Large validators (bakers) have disproportionate influence, raising debates on whether the model is truly decentralized or just a different form of centralized decision-making.

Smart Contracts and Development on Tezos

Tezos enables smart contract deployment using its Michelson language, which is formally verifiable, reducing the risk of contract exploits. However, Michelson's learning curve is steep for developers familiar with Solidity or Rust, limiting adoption compared to Ethereum or Solana. Efforts like higher-level languages (e.g., Ligo and SmartPy) have improved accessibility, but Tezos' developer ecosystem remains smaller, impacting its competitive edge for dApp growth.

DeFi and Tezos-Based Lending Protocols

While Ethereum dominates DeFi, Tezos has attracted various dApps, including lending protocols and decentralized exchanges (DEXs). Its lower transaction fees and governance mechanisms provide advantages, but liquidity fragmentation remains an issue. Without the developer and liquidity network effect that major DeFi ecosystems enjoy, Tezos-based DeFi platforms struggle to compete with giants like Uniswap. For deeper insights into competing ecosystems, check out Uniswap vs Its Rivals: A DeFi Showdown.

NFTs and Digital Art on Tezos

Tezos has gained traction in the NFT space due to its low energy consumption, making it appealing for artists and eco-conscious collectors. Platforms like Hic et Nunc introduced decentralized NFT minting, but fluctuating network activity affects platform consistency. The lack of large-scale NFT marketplaces compared to Ethereum's OpenSea limits Tezos’ reach in the digital collectible space.

Institutional and Enterprise Adoption

Tezos has seen interest from financial entities and governments for tokenized assets and compliance-focused blockchain solutions. Its on-chain governance makes it suitable for institutions needing adaptable blockchain infrastructures. However, regulatory uncertainty and competition from enterprise blockchain solutions (e.g., Hyperledger, Corda) hinder widespread adoption.

Interoperability and Cross-Chain Limitations

Tezos' interoperability efforts remain limited, restricting seamless interaction with other blockchains. Unlike Chainlink’s robust cross-chain capabilities, Tezos lacks extensive connectivity for oracle services or asset transfers. Learn more about Chainlink: The Data Backbone of Cryptocurrency.

While Tezos has strong technical foundations, its ecosystem faces hurdles in adoption, developer onboarding, and liquidity growth.

Tezos Tokenomics

Tezos (XTZ) Tokenomics: Inflation, Governance, and Rewards

Tezos (XTZ) operates on a self-amending ledger with a unique on-chain governance model that directly influences its tokenomics. Unlike many proof-of-stake (PoS) chains that rely on external hard forks for protocol upgrades, Tezos embeds governance into the blockchain, allowing stakeholders to vote on network changes. This governance model impacts aspects like inflation, supply dynamics, and staking rewards.

Inflation and Staking Rewards

XTZ has no hard cap on supply, leading to controlled inflation. The network relies on a dynamic reward system where new tokens are issued to validators (bakers) as staking rewards. The inflation rate stays within a reasonable range, ensuring network security while preventing extreme dilution. Compared to other PoS networks, inflation is relatively predictable, but governance proposals can adjust it over time.

While inflation is necessary for Tezos' security, it presents challenges. Token holders must stake or delegate their XTZ to offset dilution. Those who don't participate in staking experience a diminishing share of the network's total value. This is a common issue in staking economies, where passive holders face gradual erosion of purchasing power.

Governance's Influence on Tokenomics

Tezos' governance model allows for automatic protocol upgrades through community voting. This system removes reliance on contentious forks but introduces an element of uncertainty. Governance proposals frequently introduce changes to staking rewards and transaction fees, affecting the economic model in unpredictable ways.

Unlike rigid tokenomic models seen in projects like Decoding-Uniswap-UNI-Tokenomics, Tezos' tokenomics can evolve dynamically. This flexibility is a double-edged sword—while it allows improvements, it can also lead to governance disputes if stakeholders have conflicting interests.

Liquidity and Market Dynamics

XTZ staking discourages liquidity movement since baking requires a locked position. To mitigate illiquid staking issues, Tezos has developed liquid staking solutions where stakers can trade wrapped XTZ representing staked assets. However, this adds systemic risks, as seen in other DeFi-branded liquid staking models.

Unlike some blockchain projects that rely heavily on external DeFi incentives (see Uniswap-vs-Its-Rivals-A-DeFi-Showdown), Tezos integrates its staking economy natively. This provides stability but limits speculative DeFi interactions, making XTZ less attractive for aggressive yield farmers.

Final Thoughts on XTZ's Token Model

Tezos' tokenomics revolve around inflation-based security incentives, governance-led protocol changes, and a strong staking economy. While these elements create stability, they also present drawbacks such as governance uncertainty and inflation pressure on passive holders.

Tezos Governance

Tezos (XTZ) Governance: On-Chain Voting and Challenges

Tezos (XTZ) is recognized for its self-amending blockchain that enables protocol upgrades via an on-chain governance model. This system is designed to adapt and evolve without contentious hard forks. However, while this governance mechanism sets Tezos apart, it is not without its complexities and criticisms.

On-Chain Governance and the Self-Amendment Process

Tezos employs a liquid proof-of-stake (LPoS) consensus model, where token holders can delegate their XTZ to bakers (validators) who participate in governance decisions. Unlike many blockchains that require external hard forks for upgrades, Tezos uses a self-amendment process:

1. Proposal Phase – Developers submit upgrade proposals, including code modifications.
2. Exploration & Testing – Stakeholders vote on whether to explore the proposal further. If accepted, a testnet phase begins.
3. Testing & Adjustment – The proposal runs in a separate test environment, allowing evaluation and refinement.
4. Final Adoption – A second community vote determines whether the proposal becomes a permanent protocol change.

This approach allows the network to integrate improvements smoothly, minimizing network splits. However, while it reduces governance friction, it also places trust in those who submit and approve upgrades.

Power Dynamics and Voter Participation

Despite aiming for decentralization, the Tezos governance process is sometimes criticized for its centralization tendencies. A small number of large bakers hold significant influence over protocol upgrades due to their voting power. While delegation allows smaller holders to participate indirectly, their votes are ultimately controlled by their chosen delegate. This dynamic raises concerns about governance concentration akin to that of traditional Proof-of-Stake systems.

Voter apathy is another challenge. A significant portion of Tezos holders do not actively vote or even delegate their tokens. This results in governance outcomes that favor the most engaged validators rather than a fully representative decision-making process.

Comparison to Other Governance Models

While Tezos’ governance model is among the most refined in the space, it shares similarities with other decentralized governance approaches, such as those used by Chainlink and Uniswap. Chainlink's governance, for instance, has been scrutinized for centralization risks despite its decentralization claims (https://bestdapps.com/blogs/news/critiques-of-chainlink-centralization-and-transparency-issues). Similarly, Uniswap’s DAO-driven governance has faced challenges regarding voter turnout and whale influence (https://bestdapps.com/blogs/news/uniswaps-criticisms-challenges-in-decentralized-finance). These cases highlight common governance struggles even within well-structured blockchain ecosystems.

Future Governance Considerations

While Tezos’ governance model is one of the most advanced among smart contract blockchains, concerns about voter centralization and engagement persist. As governance frameworks continue to evolve across blockchain ecosystems, addressing these challenges will be critical to maintaining a truly decentralized and adaptable protocol.

Technical future of Tezos

Tezos (XTZ) Technical Developments and Roadmap

Tezos Upgrades: On-Chain Governance Driving Innovation

Tezos is unique in its ability to self-amend through on-chain governance, reducing network disruption while implementing protocol upgrades. This feature has allowed Tezos to progressively enhance functionality through various amendments voted on by stakeholders. Recent upgrades have prioritized aspects such as gas optimizations, smart contract improvements, and increased throughput.

One critical upgrade trajectory has focused on Layer 1 scalability improvements. With rollups gaining traction across blockchain ecosystems, Tezos has actively pursued the development of smart rollups to facilitate higher transaction processing without overburdening the base layer. This aligns with trends seen in projects like Chainlink, where off-chain computation has become integral to performance scalability.

Layer 2 and Smart Rollup Advancements

Smart rollups are expected to become a cornerstone of Tezos' future scalability approach. Unlike other Layer 2 solutions reliant on third-party validators, Tezos' smart rollups aim to maintain decentralization by anchoring security within the Layer 1 chain. This differs from architectures like Polygon or Optimistic Rollups, which rely on fraud proofs or external validators.

The integration of smart rollups may resolve concerns regarding Tezos' transaction efficiency, a complaint that has historically hindered adoption within DeFi. While incremental enhancements have improved gas efficiency and finality speed, bridging the gap with performance leaders in smart contract deployment remains a challenge.

Improvements in Smart Contracts: Wasm and Michelson Enhancements

In addition to scalability efforts, Tezos has consistently refined its smart contract environment. The continued evolution of Michelson, its native contract language, has been supplemented by WebAssembly (Wasm) integration, allowing developers from traditional backgrounds to deploy contracts without needing extensive Tezos-specific knowledge.

These efforts align with the broader industry push towards broader Web3 usability, as evident in other ecosystems striving to attract developers from non-blockchain backgrounds. However, adoption of these enhancements remains gradual, with fewer high-profile applications leveraging Wasm capabilities compared to competing environments.

Challenges and Unresolved Issues

Despite consistent upgrades, certain challenges persist within Tezos’ ecosystem. The pace at which developers implement smart rollups and Wasm-based applications has raised concerns about whether the network can maintain competitive positioning in DeFi. Additionally, governance participation, while robust in design, has suffered from periods of voter apathy, raising risks of centralizing influence over upgrade decisions.

Tezos continues refining its roadmap, but its ability to compete long-term against Ethereum, Solana, and other adaptive blockchain ecosystems will likely depend on rapid developer adoption and continued innovation in transaction scalability.

Comparing Tezos to it’s rivals

Tezos (XTZ) vs. Cardano (ADA): A Technical and Governance Comparison

Smart Contract Execution: Michelson vs. Plutus

Tezos and Cardano take fundamentally different approaches to smart contract development. Tezos utilizes Michelson, a stack-based language designed for formal verification, making it particularly suited for high-assurance applications. However, Michelson’s complexity causes a steep learning curve for developers.

Cardano, on the other hand, employs Plutus, which is based on Haskell, a functional programming language. While Plutus offers strong security guarantees, it remains challenging for developers unfamiliar with functional programming. Additionally, Cardano's eUTXO model poses constraints on concurrent transaction execution, affecting scalability in decentralized applications.

On-Chain Upgradability and Governance

One of Tezos’ most defining features is its self-amending ledger, allowing protocol upgrades without hard forks. Tezos’ on-chain governance model provides token holders with a direct mechanism to influence network upgrades. While this reduces governance disputes, it has led to slower adoption of major technical changes due to extended voting periods.

Cardano also integrates on-chain governance through its Voltaire system, but its upgrade mechanism still requires coordinated network-wide interventions. The upcoming CIP-1694 proposal aims to decentralize governance further, but hurdles remain in achieving true autonomy for community-driven development. More details on Cardano’s governance model can be found here.

Consensus Mechanisms: Liquid PoS vs. Ouroboros

Both blockchains employ proof-of-stake (PoS) variations, but their mechanics differ significantly. Tezos uses Liquid Proof-of-Stake (LPoS), enabling flexible delegation without requiring asset lock-up. This enhances liquidity but can lead to delegation centralization, as large validators dominate block production.

Cardano uses the Ouroboros protocol, where staking requires ADA to be delegated to pools for longer epochs. While Ouroboros has stronger theoretical decentralization guarantees, pool saturation discourages smaller validators from securing the network efficiently.

DeFi and Adoption Challenges

Tezos has faced challenges in establishing a robust decentralized finance (DeFi) ecosystem, with adoption lagging behind Ethereum-compatible chains. Despite efforts to integrate Ethereum’s tooling via the Jakarta and Mumbai upgrades, it struggles with network effects.

Cardano has similarly encountered adoption issues, with its smart contract ecosystem evolving slowly due to technical bottlenecks in its concurrency model and delayed feature implementations. Critical perspectives on Cardano’s development can be explored here.

Both platforms present unique strengths and impediments, highlighting the complexities of Layer 1 competition in an increasingly modular blockchain landscape.

Tezos (XTZ) vs. Cosmos (ATOM): Key Differences in Governance and Interoperability

Tezos (XTZ) and Cosmos (ATOM) stand out as two prominent blockchain networks, but they take fundamentally different approaches to scalability, governance, and interoperability. While both advocate for upgradeability and decentralized decision-making, there are critical distinctions in how each network is structured, which directly impacts their usability and developer adoption.

On-Chain vs. Off-Chain Governance

One of the most significant differences between Tezos and Cosmos is their governance model. Tezos employs an on-chain governance mechanism where token holders can propose, vote on, and implement protocol upgrades without the need for hard forks. This self-amending nature is a defining characteristic of Tezos, as it ensures long-term sustainability while minimizing contentious upgrades. Cosmos, on the other hand, operates with off-chain governance methods, relying on community discussions, governance proposals, and coordination among validators to implement changes. While Cosmos’ governance strategy allows for more flexibility, it also introduces potential inefficiencies stemming from reliance on validator consensus rather than a structured, autonomous decision-making protocol like Tezos’.

Interoperability and Scalability Approach

Cosmos takes a more aggressive approach to interoperability, thanks to its Inter-Blockchain Communication (IBC) protocol, which facilitates seamless communication between independent blockchains within the Cosmos ecosystem. This interoperability-centric model allows developers to create sovereign blockchains that can still interact with one another, making Cosmos a leading name in cross-chain communication.

Tezos, while supporting upgrades that enhance cross-chain compatibility, does not offer the same level of native blockchain interoperability as Cosmos. The emphasis of Tezos remains on formal governance, on-chain upgrades, and smart contract security, making it a more isolated ecosystem in comparison.

Smart Contract Flexibility and Security

Tezos differentiates itself through its use of Michelson, a formal verification-friendly smart contract language designed for high-assurance applications. This focus on security makes it an attractive choice for applications requiring mission-critical verifications, such as financial services and enterprise blockchain solutions. Cosmos takes a more flexible approach by allowing blockchains in its network to adopt different smart contract environments. While this provides more choice for developers, it also introduces potential fragmentation and security inconsistencies across chains using different frameworks.

Validator Economics and Incentives

Both networks rely on proof-of-stake (PoS) consensus, but the economic incentives for validators differ. Cosmos enables sovereign blockchains to establish their own staking models, resulting in varied validator incentives across the ecosystem. Tezos, however, operates a unified liquid proof-of-stake (LPoS) model, where token holders can delegate their XTZ to validators (bakers), ensuring a more standardized staking approach. This difference shapes the staking landscape of each ecosystem, with Cosmos enabling greater customization at the expense of increased governance complexity.

While Cosmos excels in blockchain interoperability and modular blockchain architecture, Tezos remains a strong contender for developers and enterprises seeking a more governance-driven, secure, and upgradable blockchain environment. Both networks play distinct roles within the blockchain ecosystem, catering to different needs driven by governance preferences, interoperability requirements, and security priorities.

Tezos (XTZ) vs. Polkadot (DOT): Comparing Governance Models

Tezos (XTZ) and Polkadot (DOT) both emphasize decentralized governance, but they achieve it in fundamentally different ways. While Tezos operates with an on-chain governance mechanism that allows continuous upgrades without hard forks, Polkadot introduces a more layered governance system that leverages the relay chain, parachains, and governance bodies to implement changes.

On-Chain Governance: XTZ’s Strength vs. DOT’s Complexity

Tezos utilizes a self-amending blockchain where stakeholders vote on protocol upgrades, avoiding contentious splits in the network. DOT, on the other hand, implements a governance structure that involves several decision-making bodies, including the Council, Technical Committee, and public referenda. This multi-tiered framework can enable more structured decision-making but at the cost of efficiency. The complexity of Polkadot’s governance model often leads to longer decision cycles, whereas Tezos streamlines its upgrade process directly through community votes.

DOT's governance introduces more safeguards but can create bottlenecks for implementing urgent upgrades. Meanwhile, Tezos has successfully executed several protocol upgrades directly through its self-amendment feature, with changes being automatically applied once approved by token holders.

Staking and Financial Incentives

Both Tezos and Polkadot operate using Proof-of-Stake (PoS) mechanisms but with different economic models. Tezos employs a staking model where any participant can delegate tokens to network validators (bakers) without locking assets, ensuring liquidity remains active in the ecosystem. Polkadot, however, requires stakers to lock their tokens for a bonding period, reducing liquidity but potentially enhancing long-term network stability.

The financial incentives between DOT and XTZ also differ. Polkadot tends to have volatile staking rewards due to its more dynamic validator election process, compared to Tezos’ comparatively stable baking rewards. While DOT may offer higher yields in certain conditions, the rigid lock-up periods might deter short-term investors from participating fully in network security.

Flexibility and Network Upgrades

Despite DOT’s reputation for fostering cross-chain interoperability, its governance model has faced criticism for being overly cumbersome. Governance proposals in Polkadot undergo extensive voting processes, a feature designed for security but often delaying implementations. This contrasts with Tezos’ ability to propose and apply upgrades directly through its built-in governance.

While both platforms emphasize decentralization, Tezos enables a more direct, transparent, and streamlined decision-making process. Polkadot’s extensive checks and balances help prevent malicious changes but sometimes hinder the network’s agility.

For those interested in broader blockchain governance debates, especially within decentralized systems, a relevant comparison can be found in Chainlink’s governance evolution: https://bestdapps.com/blogs/news/decoding-chainlinks-decentralized-governance-model.

Primary criticisms of Tezos

Primary Criticism of XTZ, Tezos

Governance Challenges and Network Upgrades

Tezos’ on-chain governance model was one of its early selling points, allowing stakeholders to vote on protocol upgrades. However, this system has faced criticism for being slow-moving and sometimes dominated by large validators (bakers). Theoretically, its self-amending mechanism should allow for smooth upgrades, but in practice, it has led to extended deliberation times and occasional conflicts among stakeholders. Compared to other governance-focused blockchains like Cardano, which has its own governance model discussed here, Tezos' governance dynamics have not always delivered the efficiency promised.

Stagnation in Developer Adoption

Despite an early focus on smart contract security and the use of Michelson, Tezos has struggled to gain traction among developers. Ethereum, and even newer Layer 1s, dominate the developer ecosystem, raising concerns about Tezos' ability to attract innovation. Michelson’s functional programming approach has proven to be a barrier for many, especially when more accessible alternatives like Solidity or Rust exist. This has left Tezos with fewer dApps, limited ecosystem growth, and a perception of lagging behind in DeFi innovation, which is something projects like Uniswap continue to lead in. You can read more about Uniswap’s dominance here.

Token Economics and Inflationary Pressure

XTZ’s inflationary model has drawn criticism due to its continuous issuance mechanisms. While PoS networks often require some level of inflation to incentivize validators, Tezos’ issuance rate has at times been seen as excessive, diluting token holders who do not actively participate in staking. This has led to fluctuations in staking participation, impacting network security and tokenomics stability. Compared to Link’s token mechanics, which you can explore here, Tezos lacks strong mechanisms to balance issuance with demand.

Lack of Strong DeFi and NFT Adoption

While Tezos has attempted to position itself as an NFT-friendly blockchain with marketplaces focusing on energy-efficient minting, it still trails Ethereum and Solana significantly in both NFT market share and DeFi adoption. Many protocols that started on Tezos have failed to gain substantial traction, limiting its appeal for liquidity providers, traders, and artists seeking vibrant ecosystems. This is in contrast to platforms like Uniswap, which has been a major player in DeFi, a topic covered in-depth here.

Brand and Marketing Struggles

Unlike Ethereum, Solana, or even newer platforms that aggressively market their ecosystems, Tezos’ marketing efforts have been inconsistent and less community-driven. Tezos has struggled with brand positioning, often failing to establish itself as a dominant player in any particular niche. This lack of clear identity has hindered broader adoption, making it harder to attract both retail investors and enterprise partnerships.

Founders

Meet the Visionaries Behind Tezos (XTZ)

Tezos (XTZ) was co-founded by Arthur and Kathleen Breitman, a husband-and-wife duo with strong backgrounds in financial technology and mathematics. Arthur, a quantitative analyst with experience at financial institutions like Morgan Stanley, conceptualized Tezos as a self-amending blockchain. Kathleen brought her expertise in fintech and smart contract development, contributing to the project’s broader vision.

Arthur Breitman: A Controversial Start

Arthur Breitman published the original Tezos whitepaper under the pseudonym "L.M. Goodman," drawing direct comparisons to Bitcoin’s decentralized ethos. However, unlike Bitcoin’s pseudonymous creator Satoshi Nakamoto, Arthur’s identity was quickly uncovered. His affiliations with traditional finance raised skepticism in the crypto community, as some viewed this as a contradiction to the ideology of decentralization.

Breitman’s background in mathematics and probability theory heavily influenced Tezos’ on-chain governance model, which enables protocol upgrades without hard forks. While this mechanism is now one of Tezos' defining features, early critics were concerned about potential power imbalances in governance voting.

Kathleen Breitman: Driving Adoption and Awareness

While Arthur focused on protocol development, Kathleen Breitman played a key role in raising awareness and positioning Tezos within the competitive cryptocurrency landscape. Her experience at R3, a blockchain consortium, gave her insights into enterprise adoption. Despite her industry expertise, Tezos’ launch was met with controversy due to internal disputes with the Tezos Foundation—an independent entity created to oversee development and funding.

Tezos Foundation Conflict

One of the most significant challenges in Tezos’ early days was the legal and organizational conflict between the Breitmans and the Tezos Foundation. The foundation, which controlled the funds raised in Tezos’ ICO, faced allegations of poor management. This led to a delay in the launch of the Tezos network, sparking investor backlash and lawsuits. Unlike Ethereum’s seamless transition from ICO to mainnet, Tezos struggled with governance issues before its blockchain went live.

These governance complications highlighted the risks of relying on third-party foundations for project execution, a problem not unique to Tezos but also seen in networks like Chainlink and Uniswap.

Legacy and Ongoing Involvement

Despite a rocky start, the Breitmans remain influential figures in Tezos' ecosystem, though the degree of their direct involvement has decreased as the project has grown more autonomous. The initial controversies surrounding internal disputes and governance centralization still linger as discussion points in the cryptocurrency community when evaluating Tezos’ commitment to decentralization.

Authors comments

This document was made by www.BestDapps.com

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