Market capitalisation
Total transaction volume
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Market cap
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24h Volume
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All time high price
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YTD Performance
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Maximum supply
Inflationary model: 42,000,000 a year

Project history

2012 to 2014 was a period when a lot of innovative designs were proposed for cryptocurrencies, seeking to improve on the original concept of Bitcoin. The insight of the founder of Tezos was that the process of incorporating innovation and upgrades into existing blockchains was technologically cumbersome, as well as contentious as far the governance of deciding on upgrades was concerned.

The core vision of Tezos, published in 2014, was the technology for a self-amending blockchain with streamlined features for decision making and governance. This would allow the quick and efficient implementation of future innovation into the code and keep Tezos secure and state of the art for the long run.

The core code was developed between 2015 and 2017, and further development was funded by an ICO in 2017. The ICO exceeded its fundraising target more than tenfold and was the largest ICO ever up to that point (and remains one of the largest ever).


The key innovation of Tezos was the on-chain governance and unique self-amending feature that allows the protocol to upgrade its own code once the change has been approved by token holders.

The Tezos protocol also incorporates a secure, high quality smart contract functionality, with its own elegant programming language.

The validation of transactions is based on the (then still novel) proof-of-stake concept, where validators are rewarded on the basis of the number of tokens they hold. Apart from its energy efficiency, the proof-of-stake approach also better aligns the incentives of token holders with the protocol.

There are several variations on the proof-of-stake algorithm. In Tezos’ case, all token holders can nominate validators, which Tezos calls “bakers”, and receive staking rewards without having to forfeit their tokens. The bakers need to place a bond which they lose if they behave maliciously.

Multiple upgrades have increased the network’s efficiency significantly.

Key people

The concept for the Tezos protocol was conceived by Arthur Breitman who was also the main architect of the code. He teamed up with his wife Kathleen who handled the strategic and business side of the project.

Their talent and passion for the project gathered strong backers early on, such as Tim Draper and Polychain Capital.

The record-breaking success of the ICO and the very large amount of funds raised (which multiplied further in the crypto bull market of 2017) might have been more of a curse than a blessing. The Tezos Foundation had control over the ICO funds, intended to support software development and ecosystem growth. After the ICO, the Foundation’s leadership behaved in a dysfunctional manner which caused delays to the project, angered token holders and invited lawsuits.

Previously remaining at arm’s length, Arthur Breitman joined the Foundation’s board earlier this year to help reinvigorate the project and move it past the difficult legacy.

Supply model and tokenomics

Tezos has an inflationary supply model, with 80 XTZ issued for each new block created. However, as all token holders are eligible for staking rewards, they are not disadvantaged by the increase in supply as they would be in the case of a proof-of-work protocol. The new supply of Tezos tokens is largely undiluted for token holders.

Tezos’ governance model of course allows both for changing the inflation rate and introducing a hard cap, although the latter is not likely as it goes against the philosophy of the founders and the community.

20 percent of the Tezos supply had been “pre-mined” and given to the Tezos Foundation and the founders in contracts vesting over 4 years.

Tezos also funds further protocol development with inflation, avoiding the need to do fundraising or to hamstring software development.

Key value drivers

Although Tezos made a lot of progress in 2021, it hasn’t convinced the market yet. Among the top ten protocol tokens in 2020, it has been overtaken by over a dozen other protocols since.

The opportunity for Tezos to rise in the rankings remains based on its well-constructed, well-conceived protocol. The question is whether Tezos will continue to capture NFT-related growth, and whether the significant investments made in visibility and their high-profile collaborations with large corporations and financial institutions will translate into gaining meaningful market share across several key application sectors such as DeFi and gaming.

Growth may be aided by the recently introduced feature (called “liquidity baking”) aimed at driving volume to the platform through an inbuilt DEX initially subsidised by the protocol (with the subsidy later recouped from trading fees).

Disclaimer: This information was prepared by Sygnum Bank AG. This information may contain forward looking statements and may be subject to change. The opinions expressed herein are those of Sygnum Bank AG, its affilitates, and partners at the time of writing. This is for informational purposes only and contains general material. It does not constitute any advice or recommendation, an offer or invitation by or on behalf of Sygnum Bank AG to purchase or sell assets or securities. It is not intended to be used as a general guide to investing, and it should be used for informational purposes only. When making an investment decision, you should either conduct your own research and analysis or seek advice from an expert to make a calculated decision. The information and analysis contained here have been compiled from sources believed to be reliable. However, Sygnum Bank AG makes no representation as to its reliability or completeness and disclaims all liability for losses arising from the use of this information.

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