Founder of Tezos Andrew Paulicek worked to bring up his platform, which was only launched three short weeks ago. However, with this new “cycle” coming, he has said,
“To me, it kind of feels similar to the beginning of Ethereum.”
The company has been experiencing new cycles approximately every three days, which means it is quickly approaching its seventh cycle. However, tech enthusiasts are calling it “cycle six,” because they start the count at zero.
Whenever a new cycle starts, the Tezos Foundation gives up sole control of their blockchain, which means the first generation of startups and token holders will have to step up. Tezos hosts eight different “bakers,” who are validators that play a role that is much similar to miners. These bakers control the foundation during the cycle change. However, during this upcoming cycle, the rest of the community will have a chance to “bake,” giving the Foundation the chance to reach the goal that they had in mind since the start – decentralization.
How Does “Baking” Work On The Blockchain?
Much like the EOS platform, all decisions in the Tezos network have to be made with delegated proof-of-stake, which is unlike the proof-of-work system that Bitcoin and Ethereum maintain. Basically, instead of looking through the hashes for each block (which is what happens in mining), the process uses a voting system with random selection. This process is normally known as validating. However, validators do not go through an election process.
With the Tezos system, the nodes that have 10,000 XTZ tokens are able to perform the baking. However, the users that dong have enough funds to participate in the baking can contribute their tokens to other services to bake for them, giving them subsidies on the network, but will be deducted fees for the bakers’ services.
Who Is “Baking” This Cycle?
Some of the professionals have not had a chance in the first few cycles, but they will now be privy to the baking process in this cycle. CoinDesk was privy to a spreadsheet from Tezos, which showed that Tezos only plans to find approximately 80% of the available blocks, but that amount will slowly reduce as more bakers contribute to the process.
According to Jonas Lamis, who is a business lead at the delegation service for the Tezos community,
“That’s just going to continue to ramp up every cycle.”
The excitement is growing for bakers at the Foundation, who are looking forward to earning fees from their validations. Bo Byrd, who founded the delegation service called Tezzigator on the platform, said that everyone has been waiting for this time to shine.
According to co-founder Josh Brown,
“We’re definitely going to be watching when the ball drops.”
Delegation Services And Token Holders
Luckily, the token holders are maintaining the same excitement. One of the representative of the Tezos Foundation said,
“We’re thrilled to see the level of participation in baking. Over 96 percent of the tokens activated are taking part in baking or delegation.”
Holders do not have to maintain their tokens for any specific amount of time, which means that there is little to no risk to delegate tex. However, these decisions need to be taken seriously, because there is no smart contract protecting either the token holder or the baker. Everything happens off-chain.
Whatever delegation service is selected will need to be trustworthy, ensuring that the holders will receive the payment they deserve and will not be subjected to fee increases without notice.
In reference to playing the role as a Tezos baker, Lamis said,
“You have to be a politician and a customer support person and a technologist to be able to pull it off.”
Upcoming Challenges And What’s To Come
The biggest challenge to this new market will be to maintain transparency, while protecting personal information. Lamis has even said that his source has largely been “tribal knowledge” from his conversations in forums and directly with developers from Tezos. He notes that the community will need to make all of this information easier to comprehend.
As Lamis puts it, this task will be,
“a whole new level of geekiness.”