Tezos is one of the most unique blockchains in existence; the fate of Tezos has been dictated by its community since the very beginning. By prioritizing features like on-chain governance and decentralization, Tezos has become a platform where user-control is the top priority.
That’s why it’s a shame that the Tezos community fails to take advantage of the full opportunity available to it.
It’s time to seriously consider the way we wish to move forward as a global ecosystem.
Let’s begin by reaching a consensus regarding the situation we currently find ourselves in.
Tezos is actually being utilized. In terms of usage, Tezos is seeing an average of over 2 million contract calls a month — meaning that people are actively using applications on the network. Within the past 30 days, there were, approximately, 4 million transactions made on the network, meaning that, distributed evenly, there was an average of over 133,333 transactions a day or over 1.5 transactions a second. This is all a noticeable improvement considering that we were seeing about 100,000–200,000 contract calls a month last year.
All of this is thanks to the fact that the Tezos ecosystem has greatly expanded. We’ve seen a variety of different decentralized applications appear on the network within the past few months and it really feels like the ecosystem is “activating.”
Tezos has probably seen the most growth with its NFT ecosystem. Hic et Nunc is one of the largest NFT platforms in the entire blockchain space and the only major competitive alternative to Ethereum-based NFT platforms. Partially thanks to Hic et Nunc bringing so many artists into the Tezos ecosystem, and the merits of their own features/design, other Tezos-based NFT platforms like Kalamint have also gained traction. Of course, there are a variety of other NFT-related applications and markets, like Bazaar Market, but it would take too long to go over them all; however, I will shout out objkt.com, that combines many of them, and OneOf, which is easily one of the most exciting projects — it just hasn’t fully launched yet.
A cryptocurrency classic, DeFi has always been important and relevant to smart-contract platform growth — and the Tezos DeFi space has significantly grown. As its foundation layer, Tezos DeFi has a few key applications like the decentralized exchange Quipuswap, the Ethereum-Tezos decentralized token bridge WRAP, the new decentralized IDO LaunchPad, and the new synthetic assets platform Youves. Next up, and where some of the most value is locked, you have “DeFi as a service” platform Crunchy and “sustainable yield-farming” platform Plenty.
(Just going to mention some other notable, active apps so DeFi enthusiasts, hopefully, don’t come for me: Kolibri, AlienFarm, Salsadao, Heranetwork — check out the Tezos DApp list included at the end of this segment for more apps)
One of the greatest aspects of the Tezos ecosystem is that there are builders coming to Tezos in order to build truly unique applications — and that’s why I wanted to include this miscellaneous category in order to cover some exciting, already launched, projects.
- Tezos Domains allows you to get your own blockchain domain name
- Electis for e-voting
- Lugh, the euro stablecoin launched by French retail giant Groupe Casino
- Various STO platforms
Honestly, there’s way too much to cover in this article especially because hyping up the Tezos ecosystem is not actually this article’s purpose. However, if you’re interested in learning more, definitely consider checking out these websites:
This ecosystem growth really works well with the fact that Tezos marketing has really stepped up in comparison to the state it was at a few months ago. For some reason, we often fail to remember that Tezos marketing, only a half a year ago, used to be virtually non-existent.
Now look at what we’ve got:
The majority of Tezos marketing seems to be focused around sports, or rather, NFTs — as both McLaren and Red Bull Racing noted their intentions to build NFT platforms on Tezos. There was also the “What’s an NFT?” ad campaign. While I’m not an active fan of mainstream sports, I can see how Tezos’ focus on NFTs makes sense considering the size of its NFT ecosystem.
Of course, on the topic of marketing, it’s also important to mention all the corporate bakers that have been brought into the ecosystem.
There’s a lot of good progress being made and the Tezos ecosystem is definitely growing. However, moving on from all the good, we now get to the core of this post. It’s time to focus on —
Let’s acknowledge one of the biggest concerns of the Tezos community — Tezos is dangerously close to falling out of the top 50 cryptocurrencies by market cap. Considering the irrational and speculative nature of the cryptocurrency market (example: Dogecoin) it may be easy for some people to dismiss market cap as insignificant in the grand scheme of things. While I would say that a high market cap is far from the most important aspect of a cryptocurrency’s foundation for longevity — it still plays an important role in bringing attention and legitimacy to a project.
So, if Tezos is growing so rapidly, then why is the market cap so low?
Honestly, it’s hard for anyone to say for sure. However, it’s very possible to point out some of the noticeable flaws present within the Tezos ecosystem that may be hampering its ability to grow in influence. By being critical of the current system, while also remaining reasonable and flexible, we can hopefully come up with solutions to improve the current state of the Tezos ecosystem.
It’s important to note that any failure of the Tezos ecosystem is a failure that we are all, at least, partially responsible for; it is irrational and counterproductive to point to a single entity, or a single individual, and blame them for the shortcomings of an entire ecosystem.
At the same time, it would be unwise to ignore the responsibility that those in positions of leadership have in relation to the rest of the community; leaders must always take a significant portion of blame because they are the ones with the majority of the power and the control.
Overall, there must be a sense of balance. Individuals must be willing to truthfully evaluate their own actions and focus around how they can improve (that being the one variable they have the most control over) — while also holding others to account in a manner that is productive and reasonable. No one benefits from misrepresentations of reality stemming from negative emotions and no one benefits from completely dismissing the honest concerns of those who are trying to improve the Tezos ecosystem.
Now, let’s dive further into the specifics and address some areas of concern.
We’re going to start off with that which gets the least amount of criticism — the average, vocal, Tezos community member; there is some strange tendency for the Tezos community to self-sabotage and engage in entirely unproductive actions. I’d reason that those who are most critical of Tezos are those within the Tezos community itself.
This is especially the case on Reddit, which may also hint towards the need to reevaluate the current structure of r/Tezos.
Presumably, people are critical of Tezos because they want Tezos to thrive — but at some point it becomes too much. Why is it that the Tezos subreddit is filled with posts and comments about how marketing needs to take advantage of influencers? Merely two months ago, the Tezos Foundation brought Huge, a highly experienced marketing firm that has worked with massive companies, on board as Agency of Record for the foundation. Only about a week before the Huge announcement, there was the announcement that a new Marketing and Communications organization named Blokhaus was coming to the Tezos ecosystem. Do we really think that neither of these organizations have considered using influencers? In merely a few months, we have already seen Tezos-related marketing appear with huge partnerships and a full video ad campaign. Maybe we can stop spamming the subreddit with “where are the influencers?” posts and comments. Maybe we can shift to actually being productive with our time.
Oh, but this is far from a recent phenomenon. The Tezos community has a history of negativity regarding marketing — and the progress of marketing initiatives does nothing to halt it. All you need to do is search the keyword “marketing” on the Tezos subreddit to see the large amount of posts complaining about marketing.
And it’s not just marketing. The Tezos community will jump at anything remotely imperfect.
Let’s look at the curious case of reddit user u/No-Metal-6762 who joined Reddit in February 2021. Despite claiming to be an “ICO participant,” 80% of the content he’s posted on Reddit is just trashing on the Tezos Foundation and Arthur Breitman. Instead of taking responsibility as a community member and attempting to assist with spreading the word of Tezos, we get posts complaining that Tezos isn’t increasing in price during the bull run, spamming the subreddit with negative comments, and spamming posts asking “who can the community point to and blame?” (post deleted, but the comments are still available) across Tezos-related subreddits.
My favorite post of all-time was definitely this one that practically begged Arthur to respond while also including this golden line addressed to him, “You are a more technical and intellectual personality, marketing is not your primary strength. However great leaders know their strengths as well as weaknesses and address them.”
Imagine being a random, anonymous person on the internet and lecturing someone, who was instrumental in building a revolutionary blockchain, about his “strengths and weaknesses” while, most likely, contributing nothing of value to Tezos yourself. Sure, no person is perfect — but comments like these are insulting and unproductive.
There’s also a somewhat common trend in all these threads — there’s a lot of negativity that is a simply a result of the community’s own ignorance. For example, look at this exchange under a post asking about Tezos marketing efforts:
User 1: “this was a pretty good one”
User 2: “But that was a decision by a 3rd party. Tezos didn’t pay them to do it to get more visibility”
User 1: “it was two parts. the VC firm wants more Tezos action, and the TF is investing in the VC firm.”
User 2: “Thank you for the insight!”
Now, this was one of the more simple and civil exchanges but it captures the overall point —far more goes into marketing behind the scenes than the community cares to realize.
Let’s compare this to the mentality of other communities.
Algorand had the same concerns about marketing but the community handled it completely differently. Many posts have actually called out the community’s criticisms of marketing and they have pointed out that the marketing is fine.
I’ve been critical of the Tezos Foundation’s marketing initiatives in the past. However, things have changed. Is it possible that we can let the professionals work for a bit as we shift our focus to things that are actually productive? There are plenty of better uses for our time.
Look at things this way:
There are currently over 51,000 members of the Tezos subreddit. If every member of the subreddit made a single comment a year on r/cryptocurrency, then, distributed evenly, that would be over 140 Tezos-related comments a day. If only half the subreddit members made 1 comment a year about Tezos on r/cryptocurrency then that would still be 70 comments a day.
In order to have 1 medium article a day for an entire year we merely need 365 Tezos community members to write a single article over the course of 365 days. That’s less than 1% of the Tezos community writing a single article a year. Actually, people don’t even need to write medium articles — just post on r/cryptocurrency itself and hype up Tezos as much as possible. Look at this post written by someone who openly admits, “I’m new to all stuff about crypto” getting over 671 upvotes and over 426 comments.
Is someone going to tell me that all these people concerned about marketing can’t find the time to make a few comments in r/cryptocurrency? Or make a single medium article, or a single r/cryptocurrency post, hyping up Tezos? Is someone going to tell me that a post instructing a professional marketing agency to use influencers (while they’re already, most likely, aware of such things) is more important than getting hundreds, if not thousands, of people aware of Tezos on social media with relatively low effort? Please, do the logical analysis on that and consider re-configuring your priorities here.
Tezos marketing already gets ample amounts of criticism so I don’t want to waste time repeating the same points made by everyone else. However, I think there is one important thing to mention that often gets overlooked:
We need an information hub for Tezos. We need a website that has every random Tezos project on it (or perhaps with a way to vet the projects via a community nomination process) and we need that website to be spread around to every community member so that people don’t have to manually point out the various NFT, DeFi, etc. applications on Tezos.
Shout out to this post that ended up bringing attention to the idea shortly before this article was published.
Right now we have websites like the Tezos Agora Wiki, and Tezos Projects, but I don’t know if people are even aware they exist — I rarely see them mentioned by people spreading the word of Tezos on online forums like Reddit. Now, look at a project like Solana. You go on the website and right there is a page listing out the whole ecosystem.
If we want to draw people to Tezos then they need to know how they can actually use Tezos. It needs to be obvious.
Let’s talk about Granada.
Granada’s pretty great. Gas consumption is down significantly. Finality has been improved significantly. Tezos took a shot at using the protocol for the public good by addressing a collective action problem via governance. You can read more about Granada here.
So what’s with the lack of hype around it?
Well, if Tezos was a human, Granada temporarily chopped off one of its legs for a few days.
Was the network down? No, technically it wasn’t. Block times were just really screwed up for a few days. Why did this happen? Apparently numerous different things — lack of testing, lack of people properly updating nodes, lack of proper communication, etc.
Sure, technical issues occasionally arise— like with Bitcoin in 2013; however, we still can’t afford to let this happen again. The larger the Tezos ecosystem grows, the more teams and users will be affected by these types of issues. Presumably, the development teams have learned from their technical mistakes now. However, I am fairly certain that certain other mistakes will go unfixed.
That brings us to the topic of communication, transparency, and decentralization. We need better communication between the Tezos community and the more influential Tezos entities. Even amongst people more “in the know” there seems to be confusion.
If someone like Luke Youngblood, who apparently “has worked closely with TF” doesn’t understand the process correctly — how are community members supposed to understand the process?
Why isn’t there a greater focus on communication in the Tezos ecosystem? Whether or not bakers are adequately supported — there is at least some social trace of the idea that they are not. Such ideas must be addressed; they must be dispelled if they are untrue and fixed if they are legitimate. It’s so saddening to see threads like this that go on without any response from the entities with the power to make a difference here.
Yes, Tezos is a decentralized ecosystem. However, certain entities are in greater positions of influence.
For example, a team like Nomadic Labs — while they are highly qualified, it’s not healthy to let them go practically unchallenged when it comes to implementing protocol upgrades. Yeah, Arthur says things like, “there are multiple different teams that work on protocol upgrades” but that’s really just an excuse for the fact that it’s, realistically, all centered around Nomadic Labs. Marigold, one of those “teams,” was founded by someone that worked at Nomadic Labs. All the other teams — Oxhead Alpha, Tarides and DaiLambda — don’t make the official announcements and they barely have any social media presence. So, if none of these other teams are engaging with the Tezos community, and none of them seem to have individual personalities online, then is it really any wonder that everyone thinks it’s all centered around Nomadic Labs? Also, if this collective of development teams isn’t properly communicating with the community, then how is that true decentralization? Is Tezos a community project or the personal project of developers?
Bakers — those who secure the Tezos blockchain. The amount of bakers is decreasing. Something needs to change and we can’t just wait around for things to magically get better.
Generally, as part of the “blockchain trilemma,” projects must prioritize two of three values, scalability, security, and decentralization, while sacrificing on the third. Tezos’ current priorities are security and decentralization — even though it remains relatively competitive in terms of scalability.
Based on hardware requirements alone, practically anyone can run a node on Tezos. For instance, one can run a node on a raspberry pi or with older hardware. The tradeoff for this is that the network’s power is more limited. For example, Solana and Algorand have higher node requirements and are therefore more “powerful,” thus allowing for things like higher max TPS (thousands relative to Tezos’ 200 max TPS — Source), etc.
While prioritizing decentralization is good, especially for long term network stability, Tezos happens to undermine itself by not utilizing free, additional capacity for further decentralization; this is due to the XTZ requirement for becoming a baker.
In order to become a baker on the Tezos network, you need 8,000 XTZ (1 roll). Assuming the price of XTZ remains above $3.00, the capital requirement to become a baker is over $24,000.
Yes, technically users can run a node with a smaller fraction of the 8,000 XTZ requirement if they are able to get other people to delegate to them — but I don’t think people realize how difficult that is and how much more difficult it will become. Even if decreasing XTZ requirements requires node runners to buy more expensive hardware — it would be worth it if that would add more opportunity and decentralization to the network. Someone can go out and buy a more expensive machine for a project they love; it’s easier than making them have to rely on strangers to delegate to them and then have to micromanage the block reward process.
In the end, while low hardware requirements, in theory, should facilitate decentralization, the reality is that the extremely high capital requirement (upwards of $24,000) partially negates these benefits and reduces Tezos’ overall potential for decentralization.
While there is still a need for a reasonable XTZ requirement in order to avoid sacrificing network security, we have reached a point where the minimum XTZ requirement to become a baker can and should be reduced. Increased network activity, increased network development, ecosystem expansion, along with XTZ’s price stabilizing above $2.00 minimum (over two to three times previous lows) means that the risk of compromising the network will be even less than it was even when the 8,000 XTZ requirement was deemed “sufficient” for high network security.
Therefore, I propose that we seriously consider reducing the requirements to become a baker (the requirements to reach 1 roll) from 8,000 XTZ to 4,000 XTZ.
Decentralize the network while we still can.
There is an argument to be made about decentralizing the network as much as possible during its early stages. As cryptocurrency gains in popularity, the elite members of society will begin buying up control over the network. Establishing a diverse network of nodes in the early days of a network will help balance out future centralizing forces. Look at the race to buying 32 ETH when each ETH was only $200 in comparison to now when each one is $2000 — such a capital requirement means only the extremely wealthy (or early adopters) are able to participate in validating the network.
There should also be concerns around future reluctance from bakers/validators to relinquish power in order to facilitate further decentralization. We’ve already observed this happen in multiple networks:
- Despite Proof of Stake being objectively better than Proof of Work, there was still large opposition from Ethereum miners when it came to making the necessary protocol changes. With a network like Tezos, where on-chain governance is utilized and voter participation as well as agreement surrounding proposals is held to a high standard to reach, it will be harder for a smaller group of people to push forward a proposal for the benefit of the network if such a proposal is perceived as reducing the influence of entrenched bakers.
- On the Polkadot blockchain, there have been major concerns about centralization; the Polkadot trap is something Tezos can avoid by taking action now. Polkadot actually passed a proposal to increase the minimum DOT required to stake. There’s another proposal in the works to increase it further. There are a plethora of posts about validators refusing to further open the network to others, validators colluding, etc. While it’s totally possible for Polkadot to resolve these issues, there is no reason that Tezos needs to even deal with these issues when we can address them before they ever become a problem.
There are benefits of increased competition between bakers.
Decreasing the minimum XTZ amount to bake will increase competition between bakers. Delegators will have more options to choose from and therefore the “better” bakers will win over a larger percentage of total XTZ. This should improve the overall health of the network.
There is also a reasonable chance that voting participation will actually increase. Thanks to a more diverse pool of bakers to choose from, delegators can be more selective. A smaller baker may be able to differentiate themselves from the competition by consistently voting on proposals while also offering competitive fees. In addition, these new bakers will most likely be made up of the most passionate and involved members of the Tezos community, so they may be more inclined to participate in governance.
It is inevitable that competition for baking will increase over time as interest in the Tezos network grows. The only difference is that, in the future, assuming nothing changes, the people baking will be those that can meet the $24,000 minimum capital requirement — who are more likely to be wealthy elite. While having a large amount of capital invested incentivizes individuals to make decisions based on the what is beneficial to the network (in order to protect the value of their investment), reducing capital requirements still allows for greater decentralization and diversification (something particularly helpful for delegators having to choose between different bakers) and will further benefit network health overall.
Opening up the network to more bakers will also enable more flexibility on behalf of individuals and their interactions with the Tezos ecosystem while increasing the flow of XTZ throughout the network. Assuming the 8,000 XTZ requirement was reduced to 4,000 XTZ, individuals who are interested in baking yet not necessarily interested in DeFi, and who also couldn’t necessarily meet the 8,000 XTZ capital requirement, could participate in validating the network; meanwhile, already established bakers that are interested in DeFi have more flexibility with their XTZ.
Decreasing the minimum requirement to bake on Tezos, from 8,000 to 4,000, will help to further decentralize the network and improve long term network stability without sacrificing security.
Tech and hubris.
The Tezos ecosystem needs to understand its position in relation to the rest of the cryptocurrency ecosystem. We no longer live in an age where we are vastly superior to other blockchains at a technical level.
Yes, we have on-chain governance, but other cryptocurrencies are catching up. Algorand will soon be implementing its own system of governance — and it’ll also be capable of thousands of transactions more than Tezos.
Yes, we have a vibrant ecosystem of decentralized applications, but other cryptocurrencies are catching up. Solana’s DeFi ecosystem is far bigger than our own — and it’s also capable of 56,000 max TPS with a finality time of less than a second. Where will Tenderbake bring us in the end? Thirty seconds? Less than thirty seconds? Technically, Tenderbake only guarantees finality in less than a minute. As for maximum TPS — Nomadic Labs devs have only spoken about aims of 1,000 max TPS by the end of the year. These technical achievements do not make Tezos competitive enough.
We are going to be screwed when all other platforms have our features (plus more) and what we are left with is, “Oh, well Tezos is time-tested!” That’s the most un-hypable nonsense I’ve ever heard. Can we break away from our current inflexible and egotistical Tezos ethos, that believes we know better than other blockchains, and transition into a highly adaptable, open, and innovative mentality? Considering the level of innovation at the application layer and at the protocol layer, I know the Tezos community is capable of a adopting an even more humble and innovative mindset to more closely match the founding spirit of Tezos.
And our random, negative comments towards others, that are so clearly full of arrogance, need to stop. When we lead with arrogance and dismiss others for their ideas, we only push them away from Tezos.
Even for this article, it’s easy to imagine someone with more technical knowledge reading this post and dismissing it because I don’t have a 100% perfect grasp of the intricacies of the Tezos protocol — sure, I may be more knowledgeable than the average community member, but it feels as though anything below complete perfection will be dismissed by someone of greater technical knowledge; that’s partially why we’re in this position where Tezos is falling behind. No one benefits from dismissing ideas, that may very well have merit, simply because the one that wrote out the idea is not a technical wizard.
Developers should not be dominating the network. Developers should be working with community members on how to bring about a shared vision. Developers are not gods — while they may be great on the technical side, they may not have a perfect grasp of the wider cryptocurrency/blockchain industry. The goal should be for all of us to combine our talents and work jointly.
Gone are the days where the cryptocurrency space was dominated by those who valued the most intricate technical details; now are the days of hype, marketing, and consolidating around a shared “faith” in a project open to all. Any developer that rejects the modern cryptocurrency mentality in its entirety in favor of old-school values will be pushing the network to irrelevancy. Like all things, there must be a sense of balance. Find the merit in different ideas.
Adapt to what the times demand.
Either we begin to address the various problems in the Tezos ecosystem or we all go down together. No one wins while areas of the ecosystem remain disjointed. Clearly, the system as it currently stands is not working. Perhaps it’s time to join together and rise together to new heights and a new system. Perhaps it is time that we value empathy and productive cooperation.
Tezos is a decentralized global community. Every community member must do their part and help bring about a glorious technological vision — and if we’re unwilling to do that, then there is no hope for the future of Tezos.
Please share this medium post if you believe it contains points that should be discussed — even if you do not agree completely.