Research Summary
The report provides a comprehensive analysis of the Tezos blockchain network’s performance in Q1 2024. It highlights the network’s growth in the gaming sector, developer ecosystem, protocol upgrades, and governance model. The report also discusses the network’s market cap, revenue, and the role of its native token, XTZ.
Key Takeaways
Tezos’ Growth in Gaming Sector
- Surge in Active Gaming Addresses: Tezos saw a 558% quarter-over-quarter increase in active gaming addresses, reaching 97,000 in Q1 2024. This growth is indicative of the network’s rising engagement in the blockchain gaming sector.
- Popular Gaming Applications: Coin Blast, a gaming application on Tezos, peaked at 36,000 active users in January 2024. Additionally, the strategy sports game Cricket Stars reached 8,000 peak active users in March 2024, demonstrating the potential of blockchain-based games.
Tezos’ Developer Ecosystem
- Developer Count: As of December 2023, Tezos ranked 30th with a developer count of 250, according to Electric Capital. This indicates a solid and growing developer ecosystem.
- Protocol Upgrades: The Oxford 2 protocol upgrade on Tezos introduced private rollups and modifications to slashing and automated staking protocols, enhancing privacy and security features. The upcoming Paris protocol upgrade promises significant improvements in network performance and scalability.
Tezos’ Governance Model
- Onchain Governance: Tezos’ onchain governance and self-amending functionality allow stakeholders to vote on protocol upgrades without the need for a network hard fork, exemplifying its innovative governance model.
- Liquid Proof-of-Stake Mechanism: Tezos is recognized for its Liquid Proof-of-Stake (LPoS) mechanism, which integrates network security with a self-amending blockchain, reducing hard forks and enabling stake-weighted onchain governance.
Tezos’ Market Performance
- Market Cap: Tezos ended Q1 2024 with a market cap of $1.4 billion, a 50% increase from the previous quarter. This growth was buoyed by the broader crypto market’s growth following the launch of the Bitcoin ETF and renewed retail investor interest.
- Revenue: Revenue for Tezos is derived from mainnet transaction fees paid to validators in XTZ. Total fees collected in Q1 2024 amounted to 19,000 XTZ, a decrease of 16% from the previous quarter, reflecting the network’s economic activity and validator compensation.
Role of XTZ in Tezos Ecosystem
- Multiple Purposes: XTZ serves multiple purposes within the Tezos ecosystem, including as a medium of exchange, for staking, delegating, and governance. The token has an annual inflation rate fixed at 42 million tokens, or 4.3% of the circulating supply.
- Price Increase: The Tezos (XTZ) network experienced a 37% quarter-over-quarter (QoQ) increase in the price of XTZ, leading to a 16% rise in the USD value of fees paid by validators, totaling $22,500 for Q1 2024.
Actionable Insights
- Monitor Tezos’ Gaming Sector: Given the significant growth in active gaming addresses on Tezos, stakeholders should keep a close eye on the network’s gaming sector for potential opportunities.
- Assess Impact of Protocol Upgrades: The Oxford 2 and upcoming Paris protocol upgrades on Tezos could significantly enhance the network’s performance and scalability. Stakeholders should assess the impact of these upgrades on the network’s overall performance.
- Understand Tezos’ Governance Model: Tezos’ innovative onchain governance and self-amending functionality could influence future blockchain governance models. Stakeholders should understand the implications of this model for network stability and growth.
- Track XTZ’s Market Performance: The price of XTZ and its role in the Tezos ecosystem could impact the network’s market performance. Stakeholders should track XTZ’s market performance for insights into the network’s economic activity.
