The Ethereum (ETH) network is currently the dominant layer-one protocol for deploying smart contracts and active users, but the race for the “computer of the world” is far from over as competing protocols gain in importance by offering solutions to high transaction costs and slow confirmation times, the network’s biggest problems.
One project that has been on the rise over the last month is Tezos, a proof-of-stake blockchain network that is designed to evolve over time without the need for a hard fork.
Data from Cointelegraph Markets Pro and TradingView show that the price of XTZ has risen 165% from its low of $ 2.09 on July 20 to a high of $ 5.53 on August 27, during its 24-hour Trading volume rose to over USD 1 billion.
Three reasons for the strong growth of XTZ in the last month are the improvements of the network through the recent upgrade of “Granada”, the takeover of the Tezos network by several large banking institutions and attractive staking rewards that entice token holders to keep their coins to put on the network.
Protocol upgrade reduces transaction costs
As mentioned earlier, the Tezos network is a self-changing blockchain that can be updated over time without the need for a hard fork.
In total, the Tezos network has gone through seven successful upgrades since launch, and three of them in 2021. The last upgrade to “Granada” was implemented on August 6th.
Tezos 7th upgrade ‘Granada’ is now live!
Emmy * consensus, cut block times by 50%
Gas improvements, massively reduce gas consumption in smart contracts
✅Baking liquidity, using governance mechanisms and incentives to deliver public goods # Tezos #Granada pic.twitter.com/IL4zJBe9oU
– Tezos (@tezos) August 6, 2021
According to the team at Tezos, some of the improvements from this latest upgrade include reducing block time from 60 seconds to 30 seconds and reducing gas consumption through smart contracts by an average of 3 to 6 times.
The new upgrade also introduced liquidity baking, which “creates incentives for large amounts of decentralized liquidity provision between XTZ and tzBTC by minting a small amount of XTZ in each block and paying it into a constant product market making smart contract”.
Acceptance in practice driven by large banks
A second development that helped increase its price and awareness was the acquisition of Tezos by the digital asset company Crypto Finance AG and the Swiss business-to-business transaction bank InCore. Both plan to introduce a new tokenization tool in the network.
Thank you #InCoreBank and @inacta for another successful cooperation project! The innovative and compliant standard for the # tokenization of financial products (FA2), which we made possible together on @tezos, definitely shapes the # blockchain industry.https: //t.co/vEENshU4Kh
– Crypto Finance (@CryptoFinanceAG) August 24, 2021
The two companies have also developed a new Tezos token standard for the tokenization of assets, known as the DAR-1 token standard, which enables the unlocking of new functions with activated smart contracts that support the financial markets, including the functions for Combating Money Laundering (AML) and Asset Management.
InCore also announced that it will introduce institutional storage, staking and trading services for XTZ, which will enable financial institutions to offer staking services for their clients’ wealth.
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Attractive staking rewards reduce the circulating supply
XTZ also appears to be benefiting from attractive staking opportunities that have resulted in the majority of tokens being withdrawn from circulation in exchange for staking rewards.
According to data from StakingRewards, the current annualized rate for token holders who delegate their XTZ is 7.85%, while those more tech-savvy can start their own Tezos bakery and earn 8.73%.
Delegating XTZ is easy for the average user and can be done from any of the wallet interfaces suggested by the project, and several exchanges also offer staking services for a small fee, including Coinbase, Kraken, and Binance.
At the time of writing, data from TZStats shows that 77.65% of the total supply from XTZ is actively used on the network, which severely limits the number of tokens available in the market and is a potential source of positive price pressure.
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