Tezos (XTZ) Review

An independent analysis on Tezos (XTZ)

The market is expecting this smart contract to be the next Ethereum

Tezos is a US based company which is releasing a new smart contract, aspiring to set the standard of future integrations of blockchain. It markets itself as a ‘self-amending crypto ledger’ with increased security.

Whilst Tezos is frequently compared to Ethereum, it claims to have a number of advantages:

1)  Tezos  has  combined  different  technologies  from  different cryptocurrencies to generate a more flexible process.

2) Tezos  has  built  a  self  amending  protocol  based  on thoughtfully set out voting rules. This means that changes to the protocol are addressed internally within the blockchain as opposed to externally (termed a ‘hard fork’).

Tokens

Under the token XTZ, Tezos is raising funding with no maximum cap over a period of less than two weeks. These tokens are used to power the smart contracts and participate in the voting for the purpose of governance. Up to 20% bonus applies for early backers.

Tokens for Investors

The  tokens  received  by  investors  following  the  fundraising period (XTZ) are predominantly used for the operation of the smart contract eco-system. Investors who are seeking capital gain will be able to sell these tokens on the exchange when officially launched.

Commercial Strategy

Tezos plans to initiate a complete launch within four months of the  closure  of  the  Initial  Coin  Offering.  During  this  time, investors and holders of the token will not be able to trade them on any active exchange.

The  allocation  of  funding  towards  development  resources, marketing  and  business  development  suggest  that  there  is going to be a substantial push for the adoption of Tezos once available.  Our  expectation  is  that  the  team  will  expand significantly post ICO.

Other Market Factors

Billionaire  venture  capitalist  Tim  Draper  is  supposedly participating in the ICO, although it is unclear as to which terms of investment he has been offered. Tim Draper was involved with the recent success of Bancor, a company which raised

$144m to be the largest ICO in history.

Management

The current team consists of 11 people with the vast majority being developers. The founders background is heavily banking, financial  markets  and  management  consulting. To date, they have achieved a considerable amount of attention already prior to the launch of the ICO.

Conclusion

Tezos could potentially be one of the largest ICOs of 2017.

Frequent comparisons to the likes of Ethereum and Dash have already  fuelled  substantial  demand  for  the  token  as  many speculative investors are unwilling to miss out on what could be a very successful project by as early as December this year.

We are attracted to the following:

•The  project  dates  back  to  2014  (meaning  this  is  not  a concept cash grab)

•Management  have  a  significant  history  in  banking  and financial markets

•The technology has a unique value proposition associated with governance and security

It has outspoken and sizeable backing from real investors

Given management’s history, their chance of commercializing Tezos to a point where it has market penetration appears to be sufficient.

We  do  draw  some  concern  from  the  choice  to  uncap  the raising amount as this can ‘muddy the waters’ when it comes to specific capital allocation post-ICO.

We  also  believe  that  the  20%  allocation  of  tokens  to  the Foundation and DLS may possibly be a liquidity event for the founders, although a vesting period is specified (monthly over four years).

There’s more…