In its ninth upgrade, Tezos says it has the on-chain governance operational POS model, and interoperability to lead in a Web3 world.
When speaking to blockchain networks, it's sometimes useful to use a mental filter that separates real use-cases that are happening now from big-picture visions of world-changing functionality that is decidedly future tense. It's nice to talk to a project like Tezos, to whom the future is clearly now.
Tezos isn't the most funded Layer 1, smart-contract blockchain, but it is among the most focused in its vision and it's quietly upgrading its capabilities and growing its ecosystem.
At the start of April, Tezos announced its ninth upgrade, Ithaca 2. Ithaca 2 has replaced the former consensus algorithm (Emmy) with Tenderbake. The new Tenderbake consensus algorithm is based on Tendermint from Cosmos protocol, and enables lower block times, providing faster transactions and smoother-running apps. Ithaca 2 further lays the groundwork for future scaling plans such as rollups for WebAssembly and EVM compatibility with a lightweight validation scheme. The new upgrade reduces the requirement to become a network validator or "baker" from 8,000 $TEZ to 6,000 $TEZ.
In the last week, Tezos announced an upcoming Octez v13 Release which it says will support 1,000 transactions per second.
Benzinga caught up with Reid Yager, Global Communications Director, Tezos Ecosystem, at the 59th Venice Biennale, a venerable annual art show to which Tezos brought generative NFTs with art from Eko33 and in collaboration with Bloomberg Philanthropies and Serpentine.
Benzinga: What does the Venice Biennale event mean to Tezos?
Reid Yager: The Venice Biennale is one of the most important milestones on the calendar for the art and culture world. It hasn't been able to happen for three years because of the COVID pandemic. During the last three years, we've seen something tremendous happen in the art world, the emergence of NFTs.
Our goal for the exhibition in Venice is to introduce the concept of NFTs to a world of collectors and art enthusiasts that typically don't understand what digital technology is, or might be skeptical of it. We're debuting a new generative art series from the generative artists echo 33 in a way where people can come scan a quick QR code and in two clicks over 30 seconds, collect their first NFT, and experience what this technology has to offer.
Do you see art and collectibles as a necessary first stage to helping the mainstream the concept of digital ownership?
I think everybody has the concept of digital ownership somewhere in the back of their brain. What NFTs in the blockchain world and the DeFi world have really created is an opportunity for people to firsthand experience it in a new way. Every single big tech platform, every single large social media application makes people feel less unique, like just one in a crowd. The NFT world is empowering people to feel unique and giving them the tools through technology to show their uniqueness through NFTs.
What are the core differentiators that separate Tezos as a blockchain?
When you talk about all the different kinds of Layer 1 blockchains and protocols, the core differentiators for Tezos are really quite simple.
First, we've seen Ethereum struggle to make its transition from Proof of Work (PoW) to Proof of Stake (PoS). And Tezos was one of the first, if not the first, pure Proof of Stake model that has not only been able to demonstrate the Proof of Stake is valuable, but also show people how it can be done. When you make an NFT on Tezos, its energy consumption is the same as sending a tweet.
The second key aspect is its upgradability. Tezos has a unique upgradability which means Tezos will never hard fork. And in that mindset, if you are a gallery, an institution, or even a financial institution, the potential in a hard fork to have your asset in two different blockchains is a large issue. Tezos offers the ability for your asset to be secured on one chain forever.
How is Tezos' on-chain governance working in terms of making necessary upgrades?
The ability for Tezos to have that on-chain governance, where communities are voting on new upgrades to the Tezos protocol, has seen two amazing things happen just in the last month. The first was in its most recent protocol upgrade, Tezos adopted Cosmos' consensus mechanism that increased throughput and transaction capability.
The next protocol upgrade is going to introduce roll-ups, which are the leading Layer 2 scaling philosophy for blockchains right now. And so Tezos is going to be leading the way with not only optimistic roll-ups but with smart contract roll-ups and eventually, the capability to have both web assembly and Solidity Ethereum Virtual Machine (EVM) composability.
Do you believe that interoperability is the future of blockchain?
Interoperability is both the future and the imperative. We must have a cross-chain future. And within that, it's about who can upgrade and scale the quickest and provide the most adaptable environment in a blockchain when a blockchain at its core is a very rigid and sturdy structure. And so Tezos' ability to be adaptable is really important to that cross-chain, interoperable future.
Is your goal to let people develop in Solidity and launch on Tezos and Ethereum?
It's actually more in the mindset of how can you increase the number of people that have the ability to develop on the Tezos' protocol, rather than addressing interoperability to solidity directly. For example, the Tezos protocol at the application layer is developed in a language called Mickelson. And although Mickelson was something developed just for the Tezos protocol, you now have different tools that allow people to write in Python, Rust, Archetype, and LIGO. And we're looking as a community to develop tools that allow people to do the same thing for WebAssembly languages, and for Solidity as well.
Is it your role and Tezos' role to be an ambassador mainstreaming global blockchain usage?
When you think about it in the context of what we're trying to achieve as an ecosystem. Tezos isn't a company, it doesn't have an LLC, it is a piece of software maintained by a global set of validators.
My responsibility is as an evangelist for the Tezos ecosystem. And as you're referring right there as an evangelist for the idea of blockchain overall, how can we rethink systems. It makes me reflect on some of the programs I've heard at the event that we were hosting, with Serpentine galleries and Bloomberg, where you had these famous institutions sitting down, and calling upon people from the NFT and blockchain community to really start thinking about how can they open up their doors and be more inclusive, empower more artists, and try to recreate themselves as institutions of the future.
Have you heard any really revolutionary approaches discussed?
It's one of those things where actual solutions are still at an arm's length away. And that's what is the most difficult thing, whether you look at traditional politics in the U.S. or in Europe or beyond, actual solutions still don't exist. And it's a lot of people hand waving at potentials. And I think it's imperative in the blockchain world, and for people building on Tezos, to start trying to prototype things that are real solutions, and incorporating them into everyday life. And that's what is defined as mainstream adoption. How can the principles of blockchain technology become realized in real-world applications that are deployed and used by real-world people.
How do you separate Tezos from highly funded and promoted projects like Polkadot, BNB, etc.?
Well, the reality is that things like Polkadot and BNB, are web 2.5, flaunting themselves as Web3. Polygon has raised millions of dollars in venture capital money. So has BNB. BNB is launched by a centralized exchange that has a vested interest in seeing its token appreciate in value.
The Tezos ecosystem is the largest DAO in the world. It is the largest decentralized Layer 1 protocol in the world. And when you hear elements from a Polygon or a BNB that make you feel that they are so impressive, it's because they're pushing it so hard, because they feel the need to validate themselves on a continual basis to influencers and to the general public. Meanwhile, the Tezos' ecosystem is vibrant and growing and you will find more bluechip brands that have launched NFT activations on Tezos than Polygon and BNB combined. We are talking about everything from Kia's Superbowl car commercial based on Tezos to Manchester United and Red Bull and McLaren Racing, to even LVMH with their perfume brand, Guerlain, who leveraged a really unique activation, where they're reforesting acres of Versailles forest land by selling NFTs. When we're talking about smart contract adoption, and utility and cross-chain interoperability Tezos is right there next to Ethereum and Solana as the 123 that you should actually care about.
How big is Tezos user base?
Tezos has over 1.2 million funded wallets. Tezos has the second-largest NFT ecosystem only to Ethereum… We have the second largest use cases for institutional securities. So we're talking about STOs and tokenized assets. Banks like Societe Generale have full divisions that are dedicated just to securitize assets on Tezos. The Central Bank of France is using Tezos for its central bank digital currency. You have so many use cases across every possible vertical, from asset tracking to financial services to arts and culture that are leveraging Tezos.
If you look at the contract called numbers, in January 2021, Tezos had about 200,000 monthly contract calls in January 2021. In January 2022, Tezos had over 6 million. And so the trend is absolutely massive, and the data supports it through.
What metrics are you using to put Tezos in line with Solana and Ethereum?
That statement was based upon two different metrics. First is the total number of NFTs. And the second is social volume on Twitter. Tezos is actually third behind Ethereum and Bitcoin in terms of social volume.
What should we be looking for from Tezos this year?
I think the biggest thing facing the blockchain industry as a whole is scaling. How can these networks provide a service that the real world can use at scale. Tezos, having just changed out its consensus mechanism, which you can equate to literally changing out the engine of a car while it's moving, set the stage for Optimistic and Smart Contract roll-ups. And as those get deployed, that is the key aspect to look at and Tezos has already implemented the privacy contracts called Sapling which is a Z-cash innovation. So what you're actually seeing for Tezos is not just a DAO structure that's able to upgrade, but you're almost looking at like a Megatron, a transformer that has taken all the best ideas from all of the other blockchain networks, put them into one.
And that's what you're starting to see on Tezos. You have privacy transactions from Zcash, you have layer-one scaling solutions from arbitrage on Ethereum. You have Cosmos' consensus mechanism. You have ZK roll-ups coming in about a year. That's what you want to look for in Tezos.
What is it going to mean? In two years, three years, five years? 10 years down the line? Can Ethereum keep up? Or will Tezos, which is slowly churning along, be able to win the race.
Summary
It always seems a difficult equation to crowdsource decision making for a project, let alone a network, and hope that stakeholders are working collectively toward the greater good of the project – there are some advances in tech that typically seem to require the "visionary" or small group of visionaries so a project can move in a definite direction.
However, as the self-proclaimed largest operating DAO, Tezos has found its balance with on-chain governance and is making big moves, upgrading its ability to handle transactions in a way that will help it scale to meet the requirements of enterprise and global applications.
Many of the other smart-contract blockchains that seem to get more regular attention and hype in the community also have more VC investments and perhaps that is no coincidence. We all like to cheer for a winner and it's hard to deny the momentum of big, well-funded projects like Polkadot and Polygon.
However, Tezos has the vision for maintaining decentralization while increasing cross-chain interoperability and amping up throughput on the network. With its keen vision of what's required for Web3, Tezos may be an important part of that future.
