Tezos (XTZ) is a decentralised blockchain designed to support smart contracts, decentralised applications (dApps), and scalable digital assets. Launched in 2018 after raising an impressive $232 million in its ICO, Tezos quickly captured the attention of developers, institutional investors, and blockchain enthusiasts. What sets Tezos apart is its innovative on-chain governance model, allowing the blockchain to upgrade itself without the need for disruptive forks—a feature that has positioned it as a strong competitor to Ethereum and other leading platforms.

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Origins and Founders

Tezos was founded by Arthur and Kathleen Breitman, a husband-and-wife duo with a strong background in finance and technology.

• Arthur Breitman studied mathematics, physics, and computer science in France before working at Goldman Sachs and Morgan Stanley in quantitative finance.

• Kathleen Breitman graduated from Cornell University and gained professional experience at Bridgewater Associates, Accenture, and R3.

Their combined expertise in financial systems and blockchain innovation laid the foundation for Tezos. Early support from high-profile investors, including Silicon Valley venture capitalist Tim Draper, helped establish Tezos as one of the most anticipated blockchain projects of its time.

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How Does Tezos Work?

At the heart of Tezos lies its Liquid Proof of Stake (LPoS) consensus mechanism, which offers decentralisation, scalability, and security. Unlike traditional Proof-of-Work systems like Bitcoin, Tezos does not require energy-intensive mining. Instead, it incentivises users through staking.

Key features include:

1. Decentralised Governance – XTZ holders can propose, vote, and approve upgrades directly on-chain, enabling the blockchain to evolve without forks.

2. Self-Amendment – Protocol updates are implemented smoothly, reducing coordination costs and preventing fragmentation.

3. Staking Rewards – Token holders can either validate blocks themselves (as “bakers”) or delegate their stake to others, earning rewards in return.

This structure ensures that the Tezos network remains adaptable, democratic, and secure.

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XTZ Token and Tokenomics

XTZ is the native cryptocurrency of the Tezos blockchain. It is used to pay transaction fees, secure the network, and interact with dApps. The blockchain operates under an inflationary funding model, introducing approximately 80 XTZ tokens per block, equating to an annual inflation rate of around 5.5%.

Importantly, a large portion of circulating XTZ is staked, with estimates suggesting that over 80% of supply is locked in staking. This reduces market liquidity while creating strong incentives for long-term holding.

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Tezos in Action: Real-World Use Cases

Tezos has been adopted across multiple industries, particularly in gaming and NFTs. A key milestone came in December 2021, when Ubisoft launched its Quartz NFT platform on Tezos. Through this platform, players could purchase and trade unique in-game items, known as “Digits,” which leveraged Tezos’ energy-efficient Proof-of-Stake model.

The announcement caused the price of XTZ to spike nearly 38% in a single day, highlighting the market’s confidence in Tezos’ potential role in the future of gaming and digital assets.

Beyond gaming, Tezos has seen adoption in tokenised assets, DeFi applications, and digital art marketplaces, where low transaction costs and energy efficiency are key advantages.

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Is XTZ a Good Investment?

Analysts remain cautiously optimistic about Tezos’ long-term outlook. While XTZ has an uncapped supply, its high staking yield offsets inflation by encouraging holders to secure the network. The combination of strong governance, scalability, and real-world adoption has positioned Tezos as a viable alternative to Ethereum.

However, as with all cryptocurrencies, volatility remains a major factor. Investors considering Tezos should weigh its unique governance model and staking opportunities against the competitive landscape of blockchain ecosystems.

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Conclusion

Tezos stands out as a blockchain that combines innovation, decentralisation, and adaptability. With its Liquid Proof of Stake mechanism, seamless governance, and real-world adoption in industries such as gaming and NFTs, Tezos has demonstrated its resilience and potential. While competition from Ethereum and newer blockchains remains strong, Tezos’ self-amending design and staking-driven economy offer compelling reasons for both developers and investors to take notice.