What Is Tezos (XTZ) and How Does It Work?
Tezos (XTZ) is a decentralized, open-source blockchain designed to evolve over time through self-amending upgrades. It supports smart contracts and decentralized applications (
dApps), similar to
Ethereum, but stands out for its formal governance system and focus on security.
At its core, Tezos uses a Liquid Proof-of-Stake (LPoS) consensus mechanism. This allows XTZ token holders to participate in
block validation (known as "baking") either directly or by delegating their tokens to
validators, called bakers. In return, participants earn
staking rewards.
What makes Tezos unique is its on-chain governance model. Instead of relying on
hard forks to upgrade the network, Tezos lets token holders vote on proposed changes to the protocol. Once approved by the community, these updates are automatically implemented, making the blockchain adaptable and resilient to centralization or division.
XTZ is the native cryptocurrency of the Tezos blockchain. It’s used to pay for
transaction fees, participate in staking, and engage in governance voting. This design ensures that the protocol remains flexible, secure, and community-driven over time.
Who Founded Tezos Network and When Was It Launched?
Tezos was founded by Arthur Breitman and Kathleen Breitman in 2014. The project was developed under a Switzerland-based foundation called the Tezos Foundation, which was later established to manage fundraising and governance.
The Tezos white paper, authored by Arthur Breitman under the pseudonym “L.M. Goodman,” introduced a vision for a self-amending blockchain that could upgrade itself without hard forks, a major innovation at the time.
In July 2017, Tezos conducted one of the largest
ICOs (Initial Coin Offerings) in history, raising over $232 million in
Bitcoin and Ether. Despite this early success, the project faced delays due to internal disputes between the founders and the Tezos Foundation’s then-president. These issues were eventually resolved, clearing the way for the project to move forward.
Tezos officially launched its mainnet on September 17, 2018. Since then, the network has undergone several successful on-chain upgrades, such as Athens, Babylon, Carthage, Granada, and Nairobi, each improving various aspects of performance, governance, and scalability.
Tezos Roadmap Highlights
• 2018:
Mainnet launch with core governance and baking features.
• 2019–2021: Protocol upgrades introduced improved consensus, lower gas fees, and faster block times.
• 2022–2024: Focused on scalability (like Smart
Rollups),
smart contract enhancements, and reducing block latency.
• 2025 and beyond: Ongoing development includes improving developer tools, enhancing interoperability, and expanding Tezos’ role in
DeFi,
NFTs, and enterprise blockchain solutions.
What Are the Key Use Cases of XTZ Token?
The XTZ token is primarily used for staking (baking), which helps secure the Tezos network and rewards participants, and for governance, allowing holders to vote on protocol upgrades. It also serves as the native currency for paying transaction fees and interacting with smart contracts and dApps built on the Tezos blockchain.
You can easily trade XTZ tokens on the
BingX spot market by logging into your account, searching for the
XTZ/USDT pair, and placing a market or limit order to buy or sell Tezos instantly.
What Is Tezos Tokenomics?
Tezos (XTZ) has a dynamic inflation-based token model, with no fixed maximum supply. Instead, the circulating supply gradually increases through staking rewards, which incentivize network security and participation.
As of May 2025, the circulating supply of XTZ is approximately 1.04 billion tokens. Tezos does not cap its total supply, but annual inflation is carefully managed, generally around 5% per year, and most newly minted tokens go to bakers (validators) and their delegators.
Staking XTZ on the Tezos blockchain, also known as “baking," allows you to earn rewards while supporting network security. Here's how you can stake your XTZ tokens step by step:
Step 1: Choose a Tezos Wallet
Select a
crypto wallet that supports Tezos staking and delegation. Popular options include:
• Kukai Wallet
• Temple Wallet (browser extension)
• Atomic Wallet
Step 2: Buy or Transfer XTZ Tokens
Purchase XTZ tokens on a supported exchange like BingX, and transfer them to your staking wallet.
Step 3: Select a Baker (Validator)
In your wallet, go to the delegation or staking section. Choose a reputable Tezos baker (validator) based on:
• Commission rate (typically 5–15%)
• Reliability and performance
• Payout frequency
Step 4: Delegate Your Tokens
Enter the baker’s address and delegate your XTZ. This process does not lock or transfer your tokens. They remain in your wallet, and you can unstake or switch bakers anytime.
Step 5: Wait for Rewards
Staking rewards are distributed after a 23-day (7-cycle) waiting period, followed by regular payouts approximately every 3 days (1 cycle). Annual returns typically range between 4% and 6%, depending on the baker.
What Makes Tezos Unique Compared to Other Blockchains?
Tezos stands out from other blockchains due to its self-amending architecture and on-chain governance model. Unlike traditional blockchains that require hard forks to implement protocol upgrades, Tezos allows token holders to propose, vote on, and implement changes without splitting the network. This approach reduces fragmentation, fosters long-term stability, and ensures the blockchain can evolve in a decentralized yet efficient way. As a result, Tezos can adapt quickly to emerging technologies, community needs, and regulatory shifts, without sacrificing continuity.
Another defining feature of Tezos is its Liquid Proof-of-Stake (LPoS) consensus mechanism. LPoS allows all XTZ holders to participate in securing the network by either becoming a validator (baker) or delegating their tokens to one. This system promotes decentralization while maintaining energy efficiency, especially when compared to Proof-of-Work networks. In addition, Tezos emphasizes formal verification, a process that mathematically proves the correctness of smart contracts. This makes it particularly appealing for applications in high-stakes industries like finance, insurance, and real estate where security and reliability are paramount.
How to Store XTZ Tokens Securely
The simplest and most convenient way to store your XTZ tokens is directly on BingX, especially if you're actively trading. BingX offers built-in wallet security with two-factor authentication (
2FA), withdrawal whitelisting, and cold storage solutions to protect your assets. Storing XTZ on BingX also gives you instant access to spot trading pairs like XTZ/USDT, making it easy to buy, sell, or manage your portfolio without transferring tokens between wallets.
For long-term storage or if you prefer full control over your
private keys, consider using
non-custodial wallets. Popular options include Kukai Wallet and Temple Wallet for browser-based access, or Ledger hardware wallets for maximum offline security. These wallets support staking, governance participation, and full control of your XTZ. Always download wallets from official sources, back up your
recovery phrases securely, and avoid sharing private keys to ensure the highest level of protection.
What Makes Tezos (XTZ) a Good Investment?
Tezos (XTZ) is considered a strong investment by many due to its innovative self-amending protocol and on-chain governance, which allow the network to upgrade itself without forks or disruptions. This forward-thinking design makes Tezos highly adaptable in a rapidly evolving blockchain landscape. Investors are drawn to the platform’s ability to implement improvements and protocol changes through community consensus, ensuring long-term sustainability and reducing governance conflicts that plague other blockchains.
Additionally, Tezos offers passive income opportunities through staking (baking), where token holders can delegate their XTZ and earn regular rewards. Its Liquid Proof-of-Stake (LPoS) mechanism is energy-efficient and encourages wide participation in network validation, enhancing decentralization and security. The platform also supports secure smart contract development through formal verification, making it attractive to institutional-grade applications. With ongoing upgrades and growing use cases in DeFi, NFTs, and enterprise blockchain solutions, Tezos remains a promising asset for both short-term traders and long-term holders.