Is Tezos Really a Good Investment?

Tezos is an open-source platform whose native utility token and cryptocurrency, XTZ, exploded into the crypto scene in July 2017 with a massively successful initial coin offering (ICO). Tezos was able to raise $232 million in this way. However, arguments amongst the founders ensued, causing the token’s distribution to be delayed. 

Tezos is a peer-to-peer transaction platform that hosts smart contracts and decentralized applications (DApps). XTZ, the native utility coin, is also known as Tez or Tezzie. When XTZ holders participate in the Proof-of-Stake (PoS) consensus method, they are rewarded with tokens.

Good Investment or Not?

Many cryptocurrency analysts are optimistic about Tezos’ long-term prospects. Let’s take a look at why Tezos is such a good long-term investment

Tezos does not have a maximum supply, which may come as a surprise. The supply of most cryptocurrencies is limited. Bitcoin, for example, has a limit of 21 million coins. In addition, there is a 5.5 percent yearly inflation rate, which means that the quantity of tokens increases by 5.5 percent each year. You might believe that these circumstances indicate a bleak outlook. However, because to convenience yield, this is not the case. This suggests that most individuals hold Tezos as an asset because of the advantages it provides.

As a result, if Tezos has a useful application, its limited supply may become unimportant. Furthermore, rising inflation may motivate users to stake their XTZ, making the Tezos network more secure. 

Investors and traders must also think about supply and demand. Around 80% of all XTZ in circulation is locked up in staking, implying that there is less XTZ circulating on exchange order books. The demand for XTZ, on the other hand, is increasing. XTZ had more trading volume than the market cap in May 2020.

In addition, developer interest in the Tezos blockchain is increasing. Michelson, the company’s native smart contract language, enables formal verification, which adds another degree of security to smart contracts by allowing high-value transactions to be evaluated before being broadcast on the blockchain. As a result, the marketplace has seen an inflow of security token offers (STOs). Tezos has hosted over $2.5 billion in STOs, making it the most popular platform for such tokens. 

The Tezos Foundation is another reason to be optimistic. It was founded in 2017 with the goal of attracting developers to XTZ and facilitating the Tezos blockchain’s whole ecosystem.

It’s also formed some high-profile collaborations for various projects. The Korea University Blockchain Research Institute, for smart contact research, is one of them (with BTG Pactual, the largest investment bank in Latin America). These are all positive indicators for potential developers interested in participating in an XTZ project.

Tezos is one of the most decentralised blockchain platforms available. This indicates that changes are implemented based on the votes of the participants. Carthage and Babylon are two blockchain upgrades that have gotten a lot of support from the community. This level of involvement and improvement is what gives a network stability.