In First, Tezos Blockchain Activates Upgrade By Token Holder Voting

The Tezos blockchain has officially been upgraded.

In a first for Tezos, two separate backwards-incompatible changes have been activated on the network after three months of on-chain voting by stakeholders. The Tezos self-amendment process which began for this first time back in February came to a close late Wednesday with the successful activation of an upgrade proposal, dubbed Athens A, just after 9 p.m. Eastern Standard Time.

Proposed by a Tezos developer group called Nomadic Labs, Athens A reduces the minimum amount of tokens called rolls required for a user to become a baker on the network from 10,000 XTZ to 8,000 XTZ. Bakers are the equivalent to miners on a proof-of-work blockchain and are tasked with responsibilities such as verifying transactions and creating new blocks.

"The reduction will result in a bigger amount of XTZ staked," emphasized CMO of Everstake – a staking-as-a-service provider on Tezos – Alexandr Kerya to CoinDesk. "Now if a baker has 16k, only 10k is staking while after the upgrade the baker will have 2 rolls engaged in staking. There will be fewer 'leftovers' so to speak which is particularly important for small bakers."

Athens A additionally increases computation limits on Tezos blocks to allow for larger transaction throughput.

Speaking to the full process of on-chain governance that led up to today's successful upgrade activation, Arthur Breitman, the creator of Tezos, told CoinDesk:

"The Athens activation demonstrates that cryptocurrencies do not have to choose between being stuck with early technological choices or protecting themselves against interference. Upgrades can be automated, decentralized, and self-funding."

Breitman added that "participation was a huge success with over 80 percent of the votes cast, twice, in a period of a few months."

Agreeing with this sentiment, Awa Sun Yin, founder of the second most popular public baking service on Tezos Cryptium Labs, noted that Tezos' on-chain governance process is "conservative," requiring high levels of participation and lengthy periods of repetitive voting rounds.

"Thus, we were concerned about voter apathy and voter fatigue," said Sun Yin. "Yet, we managed to surpass quorum requirements in every phase and I am impressed by how closely the community has been relentlessly following through the entire process, actively reminding all bakers to participate."

Automatized upgrades

Tezos' on-chain governance process, while mainly for the purposes of gathering community sentiment, also automatizes the process of testing and ultimately rolling out software upgrades on the blockchain.

Rather than requiring users to manually upgrade computer servers – called nodes – in the Tezos network, the upgrade is pushed to all bakers at a specified block number.

"It's similar to how Constantinople happened at a given time," explained Jacob Arluck from the Tocqueville Group – a for-profit business development entity funded by the Tezos Foundation – to CoinDesk. "But instead of everyone updating their software, [the upgrade] gets pushed to everyone's computers."

Speaking to what could be improved in future for Tezos' self-amendment process, Breitman added that more could be done to strengthen communication about vote proposals "off-chain."

"Some confusion about the proposals highlighted the need for better off-chain governance rules prior to ratification of an amendment," Breitman told CoinDesk. "One thing I've learned in the process is that it's more enlightening to look at the ratification of an amendment as a decentralized oracle for existing consensus than as a voting mechanism per se."

Additionally, in future, the robustness of this governance process will likely be tested as more polarizing proposals are input into the system.

As Andrew Paulicek, founder of HappyTezos – another public Tezos baking service – told CoinDesk:

"I think people will be more inclined to change bakers in case there will be two very different proposals."

Athens image via Shutterstock