What Makes Tezos a Top Pick For Crypto Investors

The Tezos Foundation

Tezos is a technology that powers a distributed, peer-to-peer, permissionless network, which is not owned, managed or controlled by any single entity. The Tezos Foundation is supervised by the Swiss Federal Supervisory Authority, and its goal is to promote and develop new technologies and applications in the field of decentralized and open software architectures, including the development of the Tezos protocol and technologies related to it.

The success of Tezos is a direct result of the efforts of a diverse and thriving community. The role of the Tezos Foundation is to organisationally and financially support the long-term development of the entire ecosystem. The main vehicles of capital deployment are grants, which are strategically used to support various community members, including but not limited to: developers; educational and research institutions; entities and individuals supporting the project development.

The Tezos Coin (XTZ)

Tezos is a blockchain network linked to a digital coin, XTZ, also known as “tez” or “tezzie”. The latter is not a product of mining; coin holders receive a reward for participating in the proof of stake (POS) consensus mechanism instead. The token made a promising start with its pretty successful Initial Coin Offering (ICO). However, it was later troubled by legal issues and a number of delays. However, the XTZ managed to survive the 2018-2019 bear market, mostly due to its unique POS mechanism. The digital token’s price not only recovered between October 2019 and February 2020, but it hit record highs.

The Past Six Mon\ths At a Glance

The Tezos Grants

In the past six months, the Tezos Foundation has provided grants for 78 new projects across 26 countries. The total amounts of funds distributed is $37.6 million. The organization is primarily focused on three categories of grants:

  • Education, Research & Development Grants – including a wide array of projects ranging from core protocol development to online training courses, these grants aim at promoting development, innovation and education about Tezos. The Foundation supports education and research on a broad range of computer science areas like: programming languages, cryptography, distributed systems and formal verification. Initiatives that contribute to the core protocol development are considered top priority, which justifies the significant amount of cash allocated to supporting scientists and engineers at top-tier institutions.
  • Ecosystem: Tools & Applications Grants – the stress here is placed upon lowering entry barriers, thus making Tezos easily accessible for both developers and end-users of subsequent applications. The Foundation supports a big number of teams creating tools that will help developers build new applications on Tezos. Grants within this category are provided in five main areas: programming language and libraries; block explorers and analytics; smart contract development; infrastructure; and applications.
  • Community Grants – resources used for supporting organizations and initiatives that grow the community and make it stronger. In order to encourage a global, open and synergetic community, the Tezos protocol was developed to provide members with censorship-resistant transactions, a proof-of-stake (POS) algorithm and on-chain governance. 

Financial Industry Adoption

Being one of the most strictly regulated industries, the financial services sector requires from its entities not only market-leading technology solutions, but also a firm focus on compliance. The Tezos Foundation takes this seriously and keeps its standards really high in this respect. Regular audits by PwC Switzerland, a Big4 accounting firm, and the substantial financial and organizational support for regulatory compliant projects make Tezos a perfect fit for the financial sector. 

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Digital Securities on Tezos

Digital securities, also known as “tokenized securities” and “security tokens”, are expected to be among the first widespread use-cases on Tezos. These smart contracts would manage all aspects of a security’s lifecycle, which could solve the present restraints associated with the conventional financial infrastructure. The benefits of security tokens include but are not limited to: immediate term efficiency gains; cost savings; certainty around ownership rights.

In a strive to develop and integrate Tezos as the novel underlying technology for the capital markets of tomorrow, the Foundation partners with businesses at every level of the digital securities system. Some of these partnerships are worth mentioning:

Collaborations With Issuance Platforms:

  • Fundament Group – regulated by BaFin, it will launch the first digital security in Germany. Fundament is developing an end-to-end tokenized securities platform with integrated distribution channels to end-users, and Tezos is the default blockchain offered for the company’s products.
  • Globacap – regulated by the FCA, Globacap is a primary issuance and administration platform for digital securities. The company is partnering with a number of digital securities exchanges to offer a secondary market for security tokens. The preferred underlying blockchain for all issuances is Tezos.
  • Taurus Group – a Swiss financial company offering a platform to trade, invest and store digital assets. Taurus is also a B2B service provider for cryptocurrency custody. The business will integrate the Tezos blockchain on its platform and will promote it as a key technology partner.

Selection of Use Cases:

  • Alliance Investments – a leading property developer in the UK, Alliance has recently announced the tokenizing of £500 million of real estate. Partnering with the Tezos Foundation, the company is expected to shortly launch its first digital security project, the River Plaza in Manchester, worth £43 million.
  • Andra Capital – the Silicon Valley Coin, representing an interest in Andra Capital’s Open-Ended Fund, is a tokenized security based on Tezos. The Fund operates with industry leading tech companies that are backed by top tier venture capital funds valued at more than $500 million.

Financials

The Tezos Foundation is the only large blockchain business to publish weekly updates and detailed Biannual Updates. The latter provides members of the community and outside observers with valuable insights into the company’s operations and financial health. The Foundation strictly follows the asset management strategy adopted and reviewed by the ruling council, constantly monitoring cryptocurrency prices. As a result, the Stability Fund has so far remained untouched.

The Tezos Foundation is also the only big blockchain business audited by a member of the Big4 group: namely, PwC Switzerland. Furthermore, it is among the few organizations with significant holding of crypto assets which received an independent audit report for the fiscal year 2018. The 2019 financial audit is currently underway, and the results will be available for investors shortly.

Below you can have a look at the assets held by the Tezos Foundation as of 31 January 2020.

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April 27, 2020