Tezos Developers' Handbook

Tezos is an open-source energy-efficient blockchain network with thriving smart contracts, negligible gas fees, a booming DeFi ecosystem, and the fastest-growing NFT community in the space. It is optimized and upgraded every 3 months with new features.

The consensus mechanism used by Tezos is called Liquid Proof of Stake. The native cryptocurrency for the Tezos blockchain is called tez which has the symbol XTZ.

Features of Tezos


Tezos can upgrade itself without having to split (hard fork) ****the network into two different chains. This is important as this allows Tezos to stay up to date with the latest advancements in blockchain technology. The execution costs for protocol upgrades are reduced and future innovations can be seamlessly implemented. More importantly, this prevents hard forks that can divide the community, and disrupt the network effects that are formed over a long time.

On-Chain Governance

In Tezos, all stakeholders can participate in governing the protocol. The election cycle provides a systematic procedure for stakeholders to reach an agreement on proposed protocol amendments. By combining this on-chain mechanism with self-amendment, Tezos can change this initial election process to adopt better governance mechanisms when they are discovered.

<aside> 💡 Learn more about on-chain governance on Tezos here.


Smart Contracts & Formal Verification

Tezos offers a platform to create smart contracts and build decentralized applications. Furthermore, Tezos facilitates formal verification, a technique used to determine the result of an operation in advance. This technique can help avoid costly bugs in the code of smart contracts.

Proof-of-Stake (PoS)

Proof-of-Stake (PoS) is the mechanism by which the various participants (nodes) in Tezos reach a consensus on the state of the blockchain. Unlike other PoS protocols, any stakeholder can participate in the consensus process in Tezos and be rewarded by the protocol itself for contributing to the security and stability of the network. Hence, it lowers the barriers to entry for involvement.

<aside> 💡 Proof-of-Stake is better than Proof-of-Work in terms of energy consumption, which requires very high computational power to solve the mathematical puzzle. Hence, PoS is less costly and much more eco-friendly.



In PoS, a security deposit is required to participate in the consensus process. The consensus protocol relies on an honest majority for its security which is incentivized directly by the Tezos protocol by penalizing dishonest behavior and rewarding honest behavior. If a participant behaves dishonestly, they can lose their deposit. Users who do not wish to participate directly in the consensus protocol have the option to delegate their rights to other users to participate on their behalf.

In Tezos token holders can delegate validation rights to other token holders without transferring ownership. It is termed as Liquid proof of stake (LPoS). It is a dynamic consensus mechanism that maintains coordination between token holders and accountable governance.