What has happened with Tezos (XTZ) since the beginning of 2023?

Since January 2023, the hooves of our virtual racehorses have been echoing in the Equiverse, bringing life to the Tezos (XTZ) blockchain. Beyond Stables, many other innovations have marked the Tezos ecosystem over the last 6 months. That's what we'll explore in this new article!

Tezos: Evolutions Chosen by the Community

Before we delve further, it's important to remember that Tezos is considered a "forkless" blockchain. Indeed, the protocol includes a governance mechanism that allows the community to vote to continuously improve the protocol without the need for a blockchain hard fork.

Thus, every innovation mentioned in the rest of this article will have followed the usual governance process: proposed by a baker, explored by other bakers, discovered by the entire community, a final vote among bakers, and then adoption. Besides being more efficient for the protocol and the community, this aspect of Tezos enables it to adapt continuously to technological advancements and enhance the infrastructure as advancements occur.

🔗 Want to learn more about Tezos? Dive into our comprehensive guide on Tezos and XTZ!

Google Cloud Becomes a Validator on Tezos

The first significant announcement dating back to February 2023: The Tezos Foundation and Google Cloud partnered with the ambition to improve the development of Web3 applications on the Tezos blockchain and the services offered to Google Cloud customers.

On one hand, developers and companies using Google Cloud can easily host nodes for applications developed on Tezos. On the other hand, startups building on the French blockchain can benefit from credits usable within the Google for Startups Cloud Program.

🔗 Discover how to become a Tezos validator and stake your XTZ (include the link to the staking guide).

The Mumbai Update: Smart Rollups

It's in this context that March 29, 2023, was marked by the long-awaited Mumbai update. Here's what it includes:

Smart Rollups have been deployed on the main network! In short, these are second-layer solutions (layer 2) that intelligently redirect a portion of activity, thereby relieving the main blockchain while benefiting from its security. In practice, any decentralized application can choose to deploy its own Smart Rollup tailored to its needs.It's worth noting that Smart Rollups are no longer limited to Tezos' Michelson programming language but allow developers to use more general languages like Rust, C, or C++.

Improvement in Tezos' execution speed. Initially set at 60 seconds, the block validation time was first reduced to 30 seconds and is now down to 15 seconds. This significantly accelerates the network's operation, with the goal of reaching a million transactions per second.🔗 For more in-depth information, find the full report by Nomadic Labs on the Mumbai update.

The Nairobi Update: Tezos 8 Times Faster

While Mumbai already signaled Tezos' desire to significantly improve its infrastructure and adapt to constantly emerging technological advancements in the ecosystem, the Nairobi update confirmed this commitment. Dated June 23, 2023, it includes many interesting innovations:

- Smart Rollups compatible with Ethereum. As you understood from Mumbai, Rollups are a priority for the Tezos Foundation. But it doesn't stop there, as Nairobi is the first step towards an EVM-compatible Smart Rollup. In essence, this means that these layer 2 solutions will be compatible with Ethereum's smart contracts. The update has been deployed on the testnet and should be implemented on the mainnet in the coming months.

-An increase of up to 8 times in the number of transactions per second, thanks to an improved and revolutionary gas model. Instead of being static like on most blockchains, Tezos' new fee system adjusts based on network usage.

Tezos' XTZ Coin

The first quarter of 2023 was particularly good for Tezos' XTZ. The coin's market capitalization rose from $0.66 billion to over $1.03 billion, representing a 55% increase. This also means a 9% outperformance compared to the overall cryptocurrency market.

However, industry-specific factors quickly weighed on Tezos. In early May, the U.S. Securities and Exchange Commission (SEC) took action against Binance and Coinbase, accusing them of offering assets it considers securities and thus should be prohibited. Among this list was XTZ. In the second quarter, XTZ's market capitalization declined by 30% and closed at $0.72 billion.

It's worth noting that the Mumbai update did not impact XTZ's inflation. Although the block validation time was halved, the inflation rate remained unchanged. Currently, validators are rewarded at a rate of 6.4% for their staking activity, resulting in an actual yield of 1.7% when accounting for XTZ's price inflation.

🔗 Is it the right time to invest in Tezos? Follow our tutorial on how to buy XTZ.

Overview of the Tezos Ecosystem

Total Value Locked (TVL), also known as the total value locked, is the primary indicator to monitor the usage of a smart contract blockchain. Since the beginning of 2023, we've gone from $52 million to $92 million in the first quarter, with a slight decline to $88 million at the end of the second quarter.

However, it's important to note that this is within the context of a decline in the price of XTZ. Indeed, the amount of XTZ locked on the Tezos blockchain has continued to increase, going from $67 million at the end of the first quarter to $84 million, and then to $110 million by the end of the second quarter.

TVL Evolution on Tezos - Source: Messari ReportIt's worth mentioning that NFTs are leading the way. In terms of active addresses, the main protocols on Tezos are NFT marketplaces. First is Objkt, with an average of 9,000 active users per week, followed by Hic et Nunc and Fxhash, both with nearly 3,000 users per week.

Furthermore, Stables is the 8th collection generating the most volume on Tezos, behind Mac Laren and Manchester United. Note that Stables is also the top-ranking game in this list, leading the gaming trend on Tezos, as Ubisoft and Unity's potential arrival looms.

🔗 To dig deeper: What are the best NFT marketplaces on Tezos?

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