Tezos, a cryptocurrency platform, has been making progress in its roadmap development according to a recent report by crypto research firm Messari. The platform's core developers have announced a strategic shift to hybrid optimistic/zk rollups, which will enable the platform to process more transactions per second (TPS) and enhance scalability. As a result of a crackdown by the SEC, Tezos' (XTZ) market cap has dropped by 30%.
Tezos (XTZ) market cap drops 30% after SEC crackdown. Tezos DeFi Ecosystem Booms
Tezos, a blockchain platform, has recently launched its 14th network upgrade named Nairobi. This upgrade has brought several improvements to the platform, including new rollup functionality and enhanced attestations. Additionally, Tezos core developers have introduced the Data Availability Layer (DAL), which operates alongside Tezos Layer-1 and ensures data availability while scaling bandwidth and storage capacity.
Tezos has also been gaining traction in the Decentralized Finance (DeFi) space, with its Total Value Locked (TVL) almost doubling in the past year. The platform is witnessing the launch of several new DeFi protocols, including innovative DEXs, lending protocols, and perps protocols.
The XTZ Ecosystem DAO has been introduced to manage and distribute Tezos' native token, XTZ, in support of community initiatives, further promoting the growth of the Tezos ecosystem.
Despite a strong Q1 2023, where the market capitalization of Tezos surged from $0.66 billion to $1.03 billion (+55%), outperforming the broader market by 9%, the platform faced a 30% quarter-over-quarter (QoQ) drop in Q2, ending with a market capitalization of $0.72 billion. The decline was primarily due to the SEC's complaints against Binance and Coinbase.
During Q2, the total crypto market capitalization increased by 2%, driven by Bitcoin and Ethereum, which saw a 7% and 6% increase, respectively, due to the introduction of Bitcoin Spot Exchange-Traded Funds (ETFs).
However, Tezos' revenue, measured by total gas fees spent (excluding storage costs), experienced an 82% QoQ decrease in Q2, primarily influenced by a 79% decrease in the average transaction fee. The reduction in the average transaction fee was attributed to the decline of the XTZ price and a slowdown in NFT front-running bidding activities.
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Fixed Inflation Rate And Burn Mechanisms
Tezos' XTZ token serves multiple purposes within the network, including staking, governance, and payment for gas fees. The token has a fixed annual inflation rate of 4.4% and a total supply of 965 million XTZ. Tezos has implemented burn mechanisms by creating new accounts or smart contracts and imposing penalties on misbehaving validators.
During Q2, Tezos displayed consistent usage levels compared to previous quarters. The network recorded an average of 53,000 daily smart contract calls and 41,000 daily transactions, indicating a slight decrease in usage. However, NFTs continue to be the primary driver of activity on Tezos, while DeFi applications are seeing increased adoption.
Tezos' ecosystem experienced mixed activity, with NFTs and gaming remaining relatively stable, while DeFi continues to see increased activity. Regarding decentralization and staking, Tezos has a globally distributed validator set with a high staking rate relative to other base-layer protocols.
Moving forward, Tezos' strategic shift in its roll-up roadmap, continued developments in the Data Availability Layer, and the anticipated activation of the Hybrid Optimistic/ZK Rollup hold promise for further growth and innovation on the network.
Overall, Tezos is a promising player in the blockchain space, with a robust ecosystem and a growing community of developers and users.
Tezos (XTZ) is currently trading at $0.810801, which represents a 0.41% decline in the last 24 hours and a 2.06% decline in the past 7 days. The 24-hour trading volume for XTZ is $15,383,765.48, indicating a significant level of trading activity on the Tezos network.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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