Tezos is creating big waves! 4 days back tech giant Google’s announced to become a validator on Tezos Network. All this means that Tezos has great fundamentals. But in the current bear market, XTZ is down 86%.
So is this your second chance at a great potential investment for the long-term growth of XTZ? So let’s look at 5 reasons that make Tezos an undervalued crypto with huge potential!
Brief Review of Tezos
In our last Tezos video, we outlined important features and events like:
- The recent Hangzhou upgrade.
- Its aggressive NFT growth policy.
- Its quality smart contracts.
- What bakers/validators do.
- And its amazing energy efficiency as one of the lowest energy use, greenest blockchains in the industry.
Welcome to #Lima – @Tezos' 12th protocol upgrade.
Designed to Evolve. Built to Empower.#Tezos #BlockchainEvolved pic.twitter.com/wcEjLlwtkQ
— Tezos (@tezos) December 19, 2022
So we will not rehash all those details here. But we wanted to remind you of some of the strong fundamentals we liked about Tezos in the first place. And none of these have changed. So what has changed? What’s new other than the bear market effect on prices? Let’s see Here are 5 things that can make Tezos one of the leading chains going forward.
Issuing Native USDT
Like it or not, decentralized stablecoins have not grown to a useful scale that we can use them across trading or DeFi. Meanwhile, USDC and USDT, both of which are centrally issued, keep growing and becoming more important.
When you can get native USDC or USDT on a blockchain this instantly makes that blockchain more useful. Ramps and off-ramps to fiat are easier and more options to buy, sell or trade immediately become available. So when Tether (USDT) decided that the 12th blockchain it would issue native USDT on would be Tezos, we knew this was an important update.
We expect the entire DeFi ecosystem on Tezos to grow considerably from here. It’s still small compared to many Layer 1s. By far, the Diversification of Validators and Exchange Access is in Binance and with the trading pair of XTZ-USDT. This pair will only get more liquid with less slippage for traders and better pricing for both buyers and sellers now that USDT will be native.
Tether USDt is live on the @tezos Network! pic.twitter.com/Lzj7Fd8yEB
— Tether (@Tether_to) July 21, 2022
When you don’t have to wrap your tokens or bridge them, everything in the ecosystem becomes easier to use. It’s bullish for Tezos.
Diversification of Validators and Exchange Access
With more than 400 validators, called bakers in the Tezos network, Tezos is more diversified than most PoS chains. And not only are they diverse in number, but they are also diverse in location too. The country that has validated the most blocks in the last 24 hours is the US. But they have only 22% of the total. That’s diversified.
It means no one country’s policies on staking specifically or crypto generally (like China’s thousand different bans on Bitcoin) can hurt Tezos. There are more than enough bakers in other jurisdictions to pick up the slack.
In a recent cycle, the biggest baker (Coinbase) has only validated 16% of transactions and no one else has done more than 6.2%. And while Binance dominates the trading activity at 55%, at least 3 others:
- Coinbase Pro
- Bithumb process 30% of total XTZ transactions or more.
Tezos Foundation 🤝 Google Cloud
Just announced: @TezosFoundation is working with Google Cloud to accelerate Web3 application development on the @tezos blockchain. Find out more about this collaboration ↓https://t.co/vQP2SFtcgq
— Google Cloud (@googlecloud) February 22, 2023
And with what we’ve seen from CeFi lenders and some exchanges recently, we know it’s best to not be dependent on just one exchange for everything.
Authentic Growing Community
Do you guys use our friend LunarCrush to look at social activity on the projects you like? If you don’t, you should. They aggregate more from CryptoTwitter than any app we’ve seen. They helped us find this update on the growth of the Tezos community.
StableTech, which builds stablecoins on Tezos, had their CEO Kevin Mehrabi tweet this gold nugget. It’s about the slow, steady, daily growth of social engagement on Twitter, as measured by LunarCrush. Total social engagement for XTZ is now almost 33 billion engagements on Twitter. And we can see that this is supported by authentic community growth. That means it’s real instead of say buying likes and followers.
Amazing data comparison noted by @hoogerwoord between:
1. Tezos social activity growth published by @LunarCrush
2. Tezos transaction data published by @thestackreport
This shows that Tezos social growth is legitimate and consolidated by actual charges and transactions. #Tezos pic.twitter.com/3Bq3jKJjtG
— Kevin Mehrabi (kevin.tez) (@KMehrabi) July 27, 2022
Not only that, but they believe in Tezos. One way you can tell is that 75% of all the circulating XTZ is staked right now. That’s a strong belief and wanting to help the network grow. Tezos HODLers have strong hands.
Growing Network Usage
One of our favorite information sources for research is Messari. If you aren’t using it, you should be. That’s not just an investing tip either. Messari is working towards becoming the Bloomberg Terminal for crypto. And they are well on their way.
But this isn’t a Messari promo. Yet they did post some great info about Tezos in their Quarterly Reports section. CEO Ryan Selkis, posted this about Tezos recently.
State of @Tezos Q4 Analyst Call is LIVE!
Join @ArthurB of Tezos as he sits down with Research Analyst @NickDGarcia to discuss Tezos' Q4 Metrics and roadmap.
Join below ⬇️https://t.co/1osayWa0Ro
— Messari (@MessariCrypto) February 23, 2023
Both contract calls and transactions are growing steadily year over year. There is only a slight dip in Q2 when everything has been down across the board. A contract call is when someone calls the smart contract function locally (like maybe with an API) but is not published or broadcast to the network.
It’s a read-only operation meaning you can only view but not alter it. A call is like proofreading that your contract will be valid when you broadcast it or reviewing what’s in your email before you send it. It’s a good gauge of interest in Tezos. Most contract calls end up becoming broadcast transactions of smart contracts. Both are growing year over year, which we can confirm on the Tezos block explorer.
When chains like this can grow during bad times, it means they are well positioned to grow even more during good times too.
While some actions result in burning coins, the XTZ token does not have a burn program in the same way that BNB or a few others do. Nor do they always burn a portion of the transaction fee like ETH does now with EIP 1559.
We mention this because there is a potentially unlimited supply of Tezos. This is rarely an issue but we saw with LUNA that it became a big problem when they tried to issue more LUNA to save UST. It’s also one of the only negatives of this network.
Tezos issued 763 million XTZ as a result of their ICO and new coins are issued at an inflation rate of 5.51% through block rewards for baking:
- Current Supply: 920 million.
- Price: $1.18.
- Market Value: 1.08 billion USD
- Market Rank: 51st largest project
Kraken, Coinbase and Binance are the 3 largest most liquid markets for trading Tezos. They all have a vested interest in its success since all 3 have bakers validating transactions on Tezos too.
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