What Is Tezos (XTZ)? The Self-Amending Blockchain Explained

Tezos is a Layer 1 blockchain designed to upgrade itself without disruptive hard forks. Its on‑chain governance and modular architecture allow the protocol to evolve quickly while maintaining stability and security—an approach the project calls “self‑amendment.” For users, builders, and institutions, this means predictable upgrades, energy‑efficient consensus, and a path to scale with rollups and data availability solutions. If you are exploring Tezos in 2025—whether to build, stake, or securely hold XTZ—understanding how this self‑amending model works is key.

In this guide, we break down what Tezos is, how its governance works, the role of Liquid Proof‑of‑Stake, why formal verification matters, what the scalability roadmap looks like today, and how to hold and delegate XTZ safely.

Tezos in a nutshell

Tezos is a general‑purpose blockchain with native smart contracts and a focus on secure upgradeability. The protocol launched with on‑chain governance so that stakeholders can propose, test, and adopt changes without coordination through off‑chain hard forks. This mechanism has allowed Tezos to introduce features such as a modern BFT consensus, rollups, and improved scripting without splitting the network. Learn more at the official site’s overview of the technology and vision on the Tezos website.

• Project overview: see Tezos’ official Learn pages for what Tezos is and how it works at Tezos Learn.
• Asset profile: a high‑level fundamentals page is also available at Messari’s Tezos asset profile.

The self‑amending model and governance

Tezos’ defining feature is its on‑chain governance process. Stakeholders (XTZ holders) participate in an upgrade cycle that typically includes proposal, exploration vote, testing, promotion vote, and adoption with a time‑boxed activation and testnet (sometimes called a “test chain”) to verify changes before they go live. This ensures upgrades are transparent, intentional, and reversible if issues are discovered during testing.

• Governance forum and proposals: the community coordinates and discusses protocol proposals on Tezos Agora.
• Developer‑facing details: the upgrade pipeline and protocol governance are documented in Tezos’ technical docs.

Because upgrades are embedded in the chain’s logic, the network can evolve without contentious hard forks. Historically, Tezos has adopted more than a dozen protocol upgrades, introducing improvements to performance, fees, developer tooling, and scaling features. The cadence is steady: proposals are drafted by core protocol engineering teams and independent contributors, tested publicly, voted on by stakers, and then automatically activated if approved.

Consensus and staking: Liquid Proof‑of‑Stake

Tezos uses an energy‑efficient Proof‑of‑Stake variant known as Liquid Proof‑of‑Stake. Instead of locking coins to a validator for fixed periods, XTZ holders can delegate their stake to validators (often called “bakers”) without transferring custody. Rewards are distributed according to stake, and misbehavior (such as double signing) can be penalized to protect network safety.

• Staking and delegation basics are explained in Tezos’ Learn resources on staking and delegation.
• Tezos’ BFT consensus (“Tenderbake”) provides fast, deterministic finality with predictable blocks; see the introduction to consensus in Tezos’ documentation.

For users, the practical takeaways are:

• You can help secure the network by delegating XTZ to a validator without sending your funds to them.
• You retain control at all times and can switch validators.
• Validators face penalties for Byzantine behavior, aligning incentives with network health.

Smart contracts, security, and formal verification

Tezos smart contracts are expressed at the low level in Michelson, a purpose‑built, strongly typed language designed to be amenable to formal verification. Developer‑friendly languages like LIGO and SmartPy compile to Michelson, giving teams familiar syntax and testing frameworks with the assurance of a verifiable, strict runtime.

• Contract language and tooling: see the Michelson reference and developer languages such as LIGO and SmartPy.
• Security focus: Tezos’ typed execution model and formal verification support are documented in the Tezos docs.

This design emphasizes correctness for applications involving digital assets, tokenization, and institutions that require strong guarantees.

Scaling Tezos: rollups and data availability

Tezos’ scaling roadmap has shifted decisively to a rollup‑centric approach. Recent protocol upgrades introduced Smart Rollups—general‑purpose rollups that execute off‑chain and settle on Tezos with validity proofs—and the Data Availability Layer (DAL), which increases throughput by separating data availability from execution.

• Smart Rollups: architecture, capabilities, and developer docs are available in the Tezos Smart Rollups documentation.
• Data Availability Layer: background and design goals are explained in Nomadic Labs’ overview of the DAL.

In parallel, the ecosystem is delivering EVM‑compatible environments so developers can deploy Solidity‑based applications with familiar tooling while inheriting Tezos’ finality and governance guarantees.

• Etherlink: an EVM‑compatible rollup built on Tezos’ rollup stack, designed for low fees and fast confirmations; see the Etherlink homepage and blog for updates.

These components together aim to provide horizontal scalability, compatibility with popular dev stacks, and strong security via L1 settlement.

2024–2025: what’s new and why it matters

Tezos has continued to iterate with protocol proposals focused on:

• Lower‑latency confirmations and improved throughput via consensus refinements.
• Maturing Smart Rollups, improving developer ergonomics and operational tooling.
• Expanding the DAL to support higher data throughput for rollups and data‑heavy applications.
• EVM compatibility through Etherlink to attract broader developer communities and liquidity.

For ongoing, up‑to‑date details, check:

• Nomadic Labs’ engineering blog, which publishes upgrade proposals, performance benchmarks, and post‑mortems.
• Tezos Agora for proposal discussions, on‑chain vote schedules, and community sentiment.

Use cases and ecosystem

Tezos is used for:

• DeFi and on‑chain markets that benefit from low, predictable fees and finality.
• Digital collectibles and brand activations; for example, Ubisoft introduced an NFT platform on Tezos, citing energy efficiency and cost considerations (see coverage at CoinDesk).
• Tokenization and regulated financial instruments, where auditable smart contracts and formal methods are valued.

EVM‑compatible rollups like Etherlink aim to complement the native ecosystem by welcoming Solidity developers and tooling while settling to Tezos for security.

Holding and staking XTZ securely

If you plan to hold or delegate XTZ, a non‑custodial setup is recommended. Keys that sign transactions and delegation operations should be protected offline to mitigate phishing, malware, and exchange counterparty risk.

• Choose a secure wallet: a hardware wallet keeps your private keys offline and signs Tezos operations in a secure element.
• Delegate from your wallet: Tezos’ Liquid Proof‑of‑Stake lets you delegate without transferring your coins; you keep full control.
• Verify validator details: check fees, performance, and community reputation before delegating via Tezos Agora or ecosystem dashboards.

OneKey hardware wallets support XTZ accounts and delegation. You can generate and store your seed phrase offline, review Tezos transactions on the device screen before signing, and delegate to a validator directly from the OneKey app. This aligns well with Tezos’ security model: users maintain custody while participating in governance and staking.

Risks and considerations

• Smart contract risk: even with formal verification tools, bugs can exist at the application layer. Review audits and contract maturity.
• Validator risk: delegating to a poorly operated validator can impact rewards, and malicious behavior may lead to penalties at the validator level.
• Upgrade cadence: while self‑amendment reduces hard‑fork risk, frequent upgrades require staying informed, especially if you run infrastructure.

How to get started

• Learn: start with Tezos’ official Learn pages and developer documentation at the Tezos site.
• Build: explore Smart Rollups, the DAL, and EVM compatibility via Etherlink’s documentation and the Tezos Smart Rollups docs.
• Secure: set up a hardware wallet, create a Tezos account, and delegate to a validator you trust through your wallet interface.

The bottom line

Tezos’ self‑amending design turns protocol upgrades into a feature—not a risk. With on‑chain governance, energy‑efficient staking, a typed and verifiable smart contract stack, and a rollup‑centric scaling roadmap, Tezos is positioned to serve both native builders and teams migrating from EVM environments via Etherlink. If you are holding or staking XTZ, consider a hardware wallet like OneKey to keep keys offline and participate in Tezos’ governance and delegation securely, end‑to‑end.

References and further reading:

• Tezos technology and Learn pages on the Tezos website
• Tezos Agora for governance proposals and discussions
• Tezos Smart Rollups documentation
• Nomadic Labs engineering blog
• Etherlink: EVM‑compatible rollup on Tezos
• Ubisoft’s adoption coverage at CoinDesk