Last updated: October 2026
Tezos (XTZ) is a proof-of-stake blockchain that upgrades itself through on-chain votes instead of contentious hard forks. Holders’ representatives, called “bakers,” propose, test and approve protocol changes, and approved upgrades switch on automatically. Since its 2018 launch Tezos has activated 21 such upgrades without a chain split. The two most recent were Tallinn (January 24, 2026), which cut block times to 6 seconds, and Ushuaia (June 30, 2026), which raised data-availability bandwidth about 15-fold. XTZ holders can earn rewards by delegating, which is liquid with no lock-up, or by staking, which earns more but is frozen and slashable.
- Self-amendment: 21 protocol upgrades through on-chain governance, with no hard-fork splits.
- Speed: 6-second blocks and roughly 12-second finality since Tallinn.
- Earning: delegate for liquidity or stake for higher rewards. Bakers need at least 6,000 tez of baking power.
- Ecosystem: generative-art NFTs, tokenized securities pilots, and the Etherlink EVM Layer 2.
History
The idea and the record ICO
Arthur and Kathleen Breitman, a married couple with backgrounds in quantitative finance and consulting, published the Tezos whitepaper in 2014 under a pseudonym. Their central insight was that blockchains don’t fail on technology alone. They fail on governance, when communities can’t agree on upgrades. In July 2017 the Tezos Foundation in Switzerland ran a fundraiser that collected about $232 million in bitcoin and ether, one of the largest ICOs of that year.
Lawsuits and a delayed launch
Within months the Breitmans and the Foundation’s then-president, Johann Gevers, were locked in a public dispute over control of the funds, which ended with Gevers’ departure. Several US class-action lawsuits followed, alleging that the ICO was an unregistered securities offering. They were settled in 2020 for $25 million. The network finally launched as a “betanet” on June 30, 2018 and was declared full mainnet in September 2018.
Upgrades named after cities
Each self-amendment is named after a city, in alphabetical order: Athens (2019, the first) through Babylon, Carthage, Delphi, Edo, Florence, Granada, Hangzhou, Ithaca, Jakarta, Kathmandu, Lima, Mumbai, Nairobi, Oxford, Paris, Quebec, Rio and Seoul, to Tallinn (20th) and Ushuaia (21st). Highlights include:
- Ithaca (2022): Tenderbake consensus, bringing deterministic finality.
- Oxford and Paris (2024): a new “staker” role with frozen, slashable stake and adaptive issuance that adjusts rewards based on how much XTZ is staked. Paris also activated the Data Availability Layer.
- Quebec, Rio and Seoul (2025): faster blocks, and cycles shortened to roughly one day.
- Tallinn (January 24, 2026): 6-second blocks, about 12-second finality, and an address-indexing registry that Tezos says improves storage efficiency for Michelson apps by up to 100x.
- Ushuaia (June 30, 2026): raised Data Availability Layer bandwidth to about 10 MB/s, made confirmations dynamic, and laid groundwork for an enshrined liquid-staking token (sTEZ), which was not yet live on mainnet at the time of writing.
How Tezos Works
- Liquid proof of stake: bakers produce and attest blocks. Holders back them either by delegating (tez stay liquid and count one-third as much toward baking power) or by staking (tez are frozen, count fully, and can be slashed if the baker double-signs).
- On-chain governance: a five-period cycle of proposal, exploration vote, cooldown, promotion vote and adoption. Bakers vote with their stake. If an amendment passes, every node switches over automatically at the set block.
- Formal verification: Tezos’ smart-contract language, Michelson, is designed so contracts can be mathematically checked. That appeals to issuers of regulated assets.
- Etherlink: an EVM-compatible Layer 2, launched on mainnet in 2024, where Solidity apps run with gas paid in XTZ and settlement on Tezos.
- Data Availability Layer: a separate data network for rollups, which Ushuaia scaled sharply.
Tezos is one of the clearest examples of the trade-offs covered in our proof-of-stake guide.
How an upgrade actually passes
Each amendment moves through five periods, every one of fixed length:
- Proposal: bakers submit or upvote candidate protocols, each identified by a hash of its code. The most-upvoted proposal advances if it clears a minimum threshold.
- Exploration vote: bakers vote yay, nay or pass. The proposal needs a quorum and a supermajority of about 80% of yay-plus-nay votes.
- Cooldown: a waiting period where developers, bakers and services test the candidate on test networks and review it for bugs.
- Promotion vote: a second quorum-and-supermajority vote, now informed by testing.
- Adoption: a final buffer before the new protocol activates automatically at a fixed block.
Because the new code hash is what gets voted on, nobody can slip in different code at the last minute. Every node either runs the approved protocol or falls off the network. Competing teams such as Nomadic Labs, TriliTech and Functori usually co-author upgrades, which spreads development beyond a single company.
Tokenomics
XTZ has no hard cap. New tez are issued as baking rewards. Under adaptive issuance, introduced in the 2024 upgrades, the issuance rate moves with the share of supply that is staked: it rises when too little is staked and falls when staking is high. The design targets roughly half of supply staked. Older figures like a flat “4.5% a year” no longer describe the system. XTZ is used for:
- Baking, staking and delegation rewards: variable, and higher for staked than for delegated tez.
- Fees: gas on Tezos layer 1 and on Etherlink.
- Governance: bakers’ votes on amendments are weighted by stake. Staked and delegated tez count equally for voting.
How to Stake Tezos Easily
There are two native options, and they work very differently:
If you do not own XTZ yet, our step-by-step guide on how to buy Tezos (XTZ) covers exchanges, wallets and getting ready to stake.
| Delegating | Staking | |
|---|---|---|
| Liquidity | Tez stay spendable | Tez frozen; about 2 cycles (~2 days) to unlock |
| Slashing risk | None | Yes, if your baker misbehaves |
| Weight toward baking power | One-third | Full |
| Reward payment | Baker pays you, on its own schedule | Paid directly by the protocol |
- Move XTZ to a Tezos wallet such as Temple, Kukai or Umami, or a Ledger connected to one of them.
- Pick a baker. Check its fee, reliability, whether it accepts stakers (bakers set a limit) and how it pays delegators.
- Choose “delegate” for flexibility, or “stake” for higher rewards, and confirm. You can do both with different amounts.
Running your own baker requires at least 6,000 tez of baking power and an always-on node. Exchange staking is easier but custodial. Rewards change with adaptive issuance and participation, so check a live dashboard before choosing. For wallet-by-wallet instructions and troubleshooting, follow our step-by-step Tezos staking guide.
Use Cases
- Generative art and NFTs: marketplaces like objkt and fxhash made Tezos a center of on-chain art thanks to low fees. New to the asset class? Start with what NFTs are.
- Tokenized securities and banking pilots: Société Générale’s digital-asset unit took part in Banque de France’s central-bank digital currency experiments using Tezos in 2020–2021, and other regulated issuers have chosen it for formal verification.
- Gaming: Ubisoft’s Quartz NFT experiment (2021) ran on Tezos but saw limited drops. Gaming activity now centers more on Etherlink.
- DeFi on Etherlink: EVM apps that want low fees and fast confirmation.
Pros and Cons
- Pro: a proven governance model, with 21 upgrades and no contentious split.
- Pro: flexible earning. Liquid delegation or higher-reward staking.
- Pro: steady technical progress, with faster blocks and a much bigger DA layer in 2026.
- Pro: formal verification and an institutional track record.
- Con: a smaller developer and DeFi ecosystem than Ethereum, Solana or Cosmos chains.
- Con: no supply cap, with issuance that varies with staking participation.
- Con: mindshare has faded since the 2021 NFT cycle.
- Con: on-chain governance can be slow, and voting power concentrates among large bakers.
Compare Tezos with other proof-of-stake chains in our crypto coin directory.
For another proof-of-stake chain’s token scenarios, see our Algorand ALGO price prediction; treat its targets as estimates rather than forecasts to rely on.
FAQ
What makes Tezos different from other Layer 1 blockchains?
Self-amendment. Most chains upgrade through off-chain coordination and hard forks, which can split communities, as with Bitcoin Cash or Ethereum Classic. Tezos holders’ bakers vote on-chain, and approved upgrades activate automatically. That has produced 21 upgrades, through Ushuaia in June 2026, without a split. The trade-off is a slower, more procedural path to change.
How do I stake Tezos?
The easiest path is delegation. Hold XTZ in a wallet like Temple, Kukai or Umami, choose a baker and delegate. Your tez stay liquid and there is no slashing. For higher rewards, “stake” instead: tez are frozen, can be slashed and take about two cycles to unlock. Our Tezos staking guide, linked above, walks through each wallet.
What did the Tallinn and Ushuaia upgrades change?
Tallinn (January 24, 2026) cut block time from 8 to 6 seconds, giving about 12-second finality, and improved storage efficiency. Ushuaia (June 30, 2026) raised Data Availability Layer bandwidth to roughly 10 MB/s, about 15x, introduced dynamic confirmations, and prepared groundwork for a native liquid-staking token.
Is XTZ a good investment?
XTZ is a bet that sound governance, formal verification and steady upgrades win long-term trust, especially for regulated assets. It has lagged faster-moving chains in retail attention and ecosystem size. Rewards from staking don’t offset price risk, so treat it as a speculative holding.
Crypto is volatile and risky; this is education, not financial advice. Do your own research.
