Tezos Making Significant Upward Strides, So What’s Driving the XTZ Token Price Value?
The recent rally of prices in the trade market has seen the majority of the coins gaining some upward momentum, with Bitcoin Cash outperforming most of its peers including Bitcoin. However, there is another altcoin which has been quite hot with its climb in the price charts, the coin is Tezos and it climbed from 45 cents last week to 60 cents.
The upward graph hasn’t been in accordance with Bitcoin rise, which is a common trend in the crypto trade market.
So, what drove the prices of tezos upward at such a speed, let us analyze and find out. Many analysts believe that Tezos on-chain governance is overrated and the same voice was opinionated by Ethereum founder Vitalik Buterin.
He said on-chain governance is an overrated phenomenon and also mentioned that the kind of governance that Ethereum works on is underrated.
Tezos Founder Believes they have made on-chain governance a Trend
Tezos founder Arthur Breitman recently tweeted that he believes they are responsible for increased interest in blockchain governance protocol.
Here is what he tweeted regarding the increasing attention towards blockchain governance in recent times,
“n 2014, before the Tezos paper came out, almost no one was talking about governance of cryptocurrencies. Today, there isn’t a single project that doesn’t discuss its own plans for governance. I am proud that Tezos led the way here. But what is governance, and why do we need it?”
Much of the attention towards Tezos have come from its recent upgrade to the Athens protocol upgrade which makes Tezos the first and only network to produce an invoice on-chain.
Nomadic labs explained that the developers on the network were paid a small token fee of 100 tezos by the network. This could also become a common tred of community sponsored developer fee for any kind of software integration or upgrade.
The tezo token has seen a sudden spike in demand in recent weeks owing to the protocol upgrade.
Why On-Chain Governance is Garnering So Much Attention
With the on-chain governance applied on the Tezos network, the network initiates a multi-stage process where it maximizes the coin holder engagement to ensure the protocol moves in the direction where the stakeholders intend it to move.
However, the Athens protocol also has a drawback where it eliminates spendable contracts, which means the users cannot spend or burn their token while they are in custody.
This elimination of spendable contracts would mean that contract holders would no longer be allowed to cash out without checks and balances in place. However, the founder of Tezos Arthur Breitman has a justification for the elimination, he says,
“TL;DR the most pressing action item is to amend the protocol to prevent the creation of code carrying, spendable, KT1 addresses. The rest of the changes can follow.”
A KT1 address in Tezos is an address which can stake coins. Until now, KT1 addresses could only be used as a regular address. They are also used to create smart contracts in Tezos.
How the Elimination OF Spendable Contracts Would Change Operations on Tezos
Elimination of Spendable contracts would mean that users can no longer directly move funds around using their KT1 address, which earlier had some smart contracts code. Now the users would be required to move their funds to a regular address and then use it to spend the coins. The aim behind the change is being seen as making the baking process or coin creation process more efficient.
The move could prove to be a major driving force behind the sudden spike in prices and the move could also help the network in expanding its market reach and valuation once it actually gets listed on the exchange.
Tezos achieved its pinnacle price of $6 during the December market boom which also saw Bitcoin touch a price valuation of around $20k.
Since then Tezos has lost almost 50% of its market capitalization all thanks to one of the longest crypto winters in 2018. However, the loss is quite less when compared to other major altcoins which lost in excess of 80% including Bitcoin.