One of the hottest cryptocurrencies in the crypto sphere, Tezos (XTZ) has been enjoying a rally throughout 2020. In mid-February, XTZ jumped 183% YTD only to fall 65% during the March sell-off.
Since then, the 10th largest cryptocurrency has risen 113% and is now trading at $2.75. This growing interest in the cryptocurrency has been because of baking or staking. Already, the network-wide staking ratio reached a new all-time high of 80.11% in mid-May.
However, much of this staking is via exchanges, as such the custodial staking trend remains unbroken but slowed down “significantly” in Q2.
Top five cryptocurrency exchanges combined hold 18% of total Tezos supply in staking and more in non-staking wallets.
Coinbase particularly is controlling 11.2% of the Tezos network consensus, after gaining another 13% month-over-month, over 8.2 million XTZ.
The growing staked XTZ has the staking yield falling to its all-time low of 0.94% with the inflation rate at 5%. Alexander Eichhorn, Founder at Blockwatch Data noted,
“Absolute inflation in Tezos is almost constant, so inflation rate slowly decreases over time.”
“However, since the amount of coins generated per block is dynamic to discourage attacks the future inflation rate may fluctuate slightly.”
“Long-term holders who dominate Tezos are very loyal to their bakers,” wrote Eichhorn. He found 77.5% of active delegators never switch their bakers while 14% do so multiple times.
Adoption seeing an increase as well
When it comes to growth, 35.5k new funded accounts joined in April, while many small investors entered the ecosystem, whales were few. But still, the top 1k accounts hold 63% of total supply with 78% of supply not moved for over 3 months now.
The network meanwhile has been seeing less growth in developer activity in terms of deployed contracts and calls but “the rising gas usage suggests, the contracts that are developed are getting more sophisticated.”
Interestingly, the largest private bank in Brazil Banco BTF is set to launch its $5 million real estate tokens on Tezos.
In February, last year, $10 million were issued on Ethereum blockchain but they “don't want to be tied to just one blockchain,” and “want to have other options, other blockchains that might serve better the pieces of tokenization and issuing tokens that represent real assets.”
The Zug-based Tezos Foundation meanwhile is on a hiring spree to reduce its involvement in daily decision-making. David Fuchs, the former digitization manager at Swiss bank Vontobel is also being hired as a head of the enterprise adoption in Europe, the Middle East, and Africa.
In 2017 Tezos raised $232 million via initial token offering (ICO) and $25 million of the proceeds were paid to the Foundation to settle a US lawsuit over the ICO. As such, the Foundation runs independently of Tezos founders Arthur and Kathleen Breitman.