Other Tezos Highlights

Other Tezos Highlights

  • Basic philosophy
  • Liquid PoS
  • On chain governance
  • Formal verification

Philosophy of Tezos

  • Blockchain protocol for stakeholders
  • Safety is the first priority

(Virtual) Pure PoS

All the stakeholders can propose blocks.

Direct democracy.

Problem: it does not scale:

  • Not all stakeholders can run mining facilities 27h/7d
  • Slowed down for waiting stakeholders without mining facilities

Delegated PoS

Blocks are proposed only by small num of delegates.
Stakeholders can vote to select delegates.

Indirect democracy.

Pros:

  • Highly efficient thanks to the small number of miners.
    ex. EOS: 21 super nodes.
  • Stakeholders can receive rewards via voting.
  • Easier to implement consensus algorithm like PBFT.

Cons: Network get centralized: less secure.

Liquid PoS (Tezos)

All the stakeholders can propose blocks,
or they may delegate their rights to other miners.

“Protocol is owned not only by selected validators,
  but by all the stakeholders.”

  • Unlimited number of validators: ex. Tezos: 500 bakers
  • Slower than DPoS but more decentralized i.e. securer.
  • Stakeholders can receive rewards through delegation.

Liquid Democracy

Tezos and On Chain Governance

What is Governance in Blockchain

“How to fork (upgrade) protocols?”

Soft/Hard fork

Soft fork
Backward compatible
Hard fork
Backward incompatible:
Past valid blocks may become invalid under the new protocol.

Risk of Hard Fork

A hard fork of a protocol may cause
a hard fork of the community.

  • Ethereum and Ethereum Classic hard fork after DAO incident
  • Hard fork of Bitcoin Cash and “hash war”

Goal of the Governance

Smooth evolution of blockchain protocol
without community hard fork.

On Chain Governance

Protocol upgrade is implemented in protocol itself,
and all the processes are recorded on chain:

  • Protocol upgrade proposal
  • Test of proposal
  • Vote to upgrade
  • Automatic upgrade of nodes

Protocol defines how itself is to be upgraded.

“Protocol is owned not by developers but by stakeholders.”

Tezos: Protocol Separation

Define the target of on chain governance:

Shell
Network, storage, etc. Not the target, since their change only cause soft forks.
Protocol
Semantics of transactions and how to reach consensus.
The target of on chain governance, since their change triggers hard fork.

Tezos: On Chain Governance

90 day cycle of governance:

  • Code of proposals uploaded
  • First vote: select one of them
  • Second vote: test it or not
  • Test phase
  • Final vote: upgrade or not
  • Automatic node upgrade
Liquid democracy
voting right is weighted by stakes, and delegatable just like LPoS.

Tezos: Governance History

“Athens”: Tezos’s first protocol upgrade.
Just changes of few constant parameters.

  • 2019-05-21: Passed the final vote
  • 2019-05-30: Activated

“Babylon”: Improved consensus algorithm and others.

  • 2019-08-29: Passed the first 2 votes. Now in the test phase

Other Tezos Highlights

  • Basic philosophy
  • Liquid PoS
  • On chain governance
  • Formal verification ← Coming soon