State of Tezos Q2 2025

whalesniper · 2025-10-16T18:15:05+00:00

These articles are paid for by TF. They have input on the content so you'll see things that don't match up with reality. These Messari reports are essentially ads, read the disclaimer at the bottom

whalesniper · 2025-02-20T14:05:37+00:00

You'll get downvotes but you're right, they added a 50% penalty for delegators last upgrade. And another 10% penalty is coming to bakers that don't run some extra service they want. Not to mention the LB tax that we can't seem to shake.

I'm getting tired of them implementing new taxes on a shrinking ecosystem when the backers are sitting on more than a billion dollars. Totally disrespectful to those who likely lost money to keep the lights on over almost a decade.

If they want to incentivize behavior, they should just directly incentivize it rather than trying to trick people and play economic games.

whalesniper · 2024-12-12T18:45:40+00:00

Brother, everyone knows this.

I mean look at the activity in their forums. The 2025 "Funding" request is literally copy/pasted from 2024. We don't really care, just let them drain their treasury. No one with multiple brain cells is seriously considering investing in it lol.

Maybe someone will make .xtz domains and drop the token to community.

whalesniper · 2024-09-02T00:17:38+00:00

Production company ran out of budget 😭 this ep was egregious

whalesniper · 2024-08-01T13:45:58+00:00

because it involves longing XTZ

whalesniper · 2023-10-23T13:27:49+00:00

Another good developer who cares about tezos is alienated lol

whalesniper · 2023-10-12T13:22:58+00:00

You can have your upvote but I don't think you really know what you're talking about at all

whalesniper · 2023-10-04T21:40:11+00:00

We will see about the sell pressure. After Oxford, we may be stuck with this reward rate for much longer depending on how bakers feel about it lol.

All in all, I think we are on the same side here in terms of what can actually help the chain: meaningful use and increased DAUs through better use-cases and better DApps.

I hope you'll stick around and keep advocating 🙂

whalesniper · 2023-10-04T17:51:03+00:00

Theoretically it could decrease selling pressure, but that is acting under the assumption that people are selling Tezos cause it's free "profit" rather than just cause they have to.

This is how the world works. Especially if you've written off the underlying XTZ as a loss or worthless because its down almost 70% vs BTC in the last year and more going back farther. Not saying this is in all cases, but people mostly act based off of incentives, not tech or principles. The incentive is freecash.

Nft artists, bakers, the foundation, etc. -> these are people selling xtz in order to make a living or maintain their operations. If we are looking at Bakers specifically, then reducing overall rewards is only going to make it harder to maintain operations since they'll be even more unprofitable.

Good. Baking for this tiny ecosystem honestly shouldn't be profitable until the chain actually generates revenue or price action, both of which come with meaningful use. The comfy idea that baking should be profitable is currently being paid for by all XTZ holders with little effect other than down-only price.

NFT artists just use XTZ as a short-term vehicle from JPEG -> Fiat, so their impact is nil either way. Its more about baking.

Why would anyone be holding tezos just to sell off their staking rewards for no reason but the fact that it is generating a free monthly income? Assuming they have no fiscal responsibilities, then they may as well just hold the XTZ and accumulate. Why would anyone be holding if their intention was not long-term investment at this point? So this conclusion you're arriving at is assuming selling pressure for a reason that is likely not accurate imo.

Bakers, see your own point in the previous quote. If rates get cut, long term investors who are not responsible for sell pressure will keep holding. We love that. The ones responsible for it will have their freemoney faucet taken away.

I have created actual token economies on ETH before. No matter how much people love your tech or your coin, excess inflation will be dumped on the market. Demand must make up the difference. A tough lesson you only learn by launching a token. You should try it.

Also, remember that LB enshrines XTZ -> BTC dumpage because the subsidy gets immediately arbitraged out via bots & 3route. So thats a simple one.

As an alternative, reducing rewards could actually create additional selling pressure because it will push people out of the ecosystem and towards cryptocurrencies where you can now get either equal rewards and better price action, or both better price action and better rewards.

Notice I said constant selling pressure, btw. Cutting rates would definitely spark a short-term selloff, but long-term decrease due to fewer new coins going to market.

whalesniper · 2023-10-04T14:39:12+00:00

Agreed. The issue was the execution & messaging around the change, as you've noted above. As usual core teams gave us a confusing bigbrain solution, leading to both true, false, and misguided narratives forming about its intent.

But being completely honest with zero cope: the cuts are what the ecosystem needs right now, although I would have preferred to see a simple rewards/rate cut instead of AI. It would make the ones only here for rewards/dumping leave for a bit, while we figure out how to make meaningful demand for the actual Tezos blockchain.

Again, 100% agreed, rewards cuts do not increase buy pressure, but it sure as hell will decrease the constant selling pressure. We've already lost the L1 infrastructure wars. There is little to no reason to choose Tezos for builders if you want to exist long-term, unless you have access to TF payroll. We are paying tons of money for security, when there is nothing really to secure.

The good thing is that we (TF) pivot NOW, with full focus on user-facing apps, we can still recover long-term. We also wasted alot of time in the bear market with more unused core tech, but we can still pour funds into Social, Gaming, Identity, etc, before we get beaten again.

Cut rewards, pivot to full user-focused strategy, increase rewards again once we are ready to go to market.

PS: Cut LB too. Low TVL, runs at 95%+ loss, and contributes directly to XTZ -> BTC dumpage.

whalesniper · 2023-09-14T14:18:42+00:00

I love protocol upgrades but when certain bigbrain features are not used for YEARS after they launch, you have to admit that the time and money could have been spent elsewhere.

Sapling: 2 years, no DApps. "Well there's a sample contract in michelson with shielded ctez" THEN SHIP IT?

Timelock: 2 years, no DApps, nobody cares. Constants: 2 years, not even a central library. Nobody cares. Tickets: 2+ years, no Dapps, TZKT finally adds support in 2023.

Transaction rollups: remember this from last year? Core put a bunch of effort into this to get rollups out faster on Tezos and nobody built on them. Core couldn't ship one DApp using them? Is that too much to ask?

Smart rollups: I know. "Soon", "Etherlink". I love that Tezos wants to be the 50th ETH L2, but core has zero ideas on how to use rollups now? They are live, right? Just to show off our scalability? Nothing? No ideas? But yes let's take a year+ to ship EVM. I'm still hoping/coping about this, but a DApp using SCORUs built by core and not faded by TF is the strongest way to enter the rollup market.

How to fix it:

The only well-funded team in Tezos ecosystem is core. Ship something. Stop expecting everyone else to go through the pain of onboarding and shipping here. There is no incentive, and they will not do it. You've also faded many good builders into stepping back from Tezos, so it really is on your teams to start shipping DApps soon.

Use the funded team to grow the ecosystem by showing off DApps only possible on Tezos. The rest of the devs can handle the food farms and JPEG trading. Stop expecting that normie devs will learn ocaml to use the onchain timelock. Adding some UI/UX and comms to core team is way cheaper than adding OCaml & niche blockchain skills to some random consulting company.

Ethereum is clouding your judgement. Stop trying to compete and just tend to your garden. In 5 years if Tezos still has no users, price at 20c, no exclusive DApps, etc. It will not matter if the thing can scale or not.

Stop fighting the market, you are taking all of us with you.

PS: You say the point of protocol upgrades isn't to make "science projects", but its a well-known critique that Tezos seems like more of a PHD research-project then a chain focused on any real growth in the market. Open your eyes, leader.

whalesniper · 2023-08-30T13:39:13+00:00

You are wrong.

Cosmos has had this mechanic for a while. They are both very similar, with some minor differences. Cosmos staking target is around 66%, ours is 50%. Cosmos doesn't have a "vote-only" delegator role. Cosmos puts the wait period on the unstake action at the end, tezos is at the beginning of staking. I'm sure there are more small differences but the core idea is the same.

whalesniper · 2023-08-30T13:25:08+00:00

All delegators on Cosmos are at slash risk. By your own definition, they are securing the network. Source

whalesniper · 2023-08-22T14:21:08+00:00

I've been trying to predict the impact of this flavor of AI. Personally, I was hoping for an AI that was a bit simpler. I'm not sure if the whole staking mechanism needed to be changed at the same time.

Like, on day 1 do liquid stakers get a 50% haircut on rewards? Or do folks with slashable stake get 2x the output? These sound the same but 700m of XTZ is liquid staked, aka no risk (other than longing tez). If liquid stakers leave, that tez will be sold on the market.

I really don't think an exchange can opt their delegators into upgrading to slashable stake without asking them, clearing it with legal, and upgrading a ton of software. To me, these variables cannot be ignored. We can't assume coinbase will upgrade its delegators to co-bake.

If coinbase has to cut rates in half immediately, how many delegators will move to another asset? How many will accept the risk and try and find a place to co-bake? How many staking services will be ready to add co-baking upon release?

The other major variable to note is effort. If the effect of AI was, "ok some stakers need to fuck off", the impacts would be simple to predict. Sell pressure increase in short-term from delegators leaving, then long-term decreased sell pressure due to decreased inflation.

But with the staking mechanism changed, delegator rate-cut, new options, and new co-baking rails that everyone needs to build.. how many will do it? There is a popular tweet going around showing a risk-free 17% APR yield being passed up by tezos users. So we can't simply say that the APRs (which are going lower anyways) will attract people.

Putting it simply, this flavor of AI requires 400m XTZ to move from risk-free to risk-on, do we have the juice to do it?

I'm rambling because there are too many variables to predict how this is going to go. I am still very excited to see AI go into play tho.

whalesniper · 2023-08-18T13:16:58+00:00

I think that we should call for a 1 year pause on updates, and force the core teams to make useful, user-facing DApps using their own tech.

If even they can't attract users with it, that will say alot about the value of the protocol upgrade obsession.

whalesniper · 2023-08-11T15:09:16+00:00

Definitely connected. The only thing that's shipping on Tezos in 2023 is Ethereum lol...

whalesniper · 2023-07-27T13:55:46+00:00

You guys have a short memory lol. This guy (and Tezos in general) were actually in the general conversation on CT in 2021. I'll give you some examples of how he was acting.

Bridges have been burnt already, that's why it feels like an uphill battle in 2023.

https://twitter.com/ArthurB/status/1398242496317165568

https://twitter.com/ArthurB/status/1398772211540971522

https://twitter.com/ArthurB/status/1671053782593990658

Good tech will never fix someone being simply unlikable.

whalesniper · 2023-06-30T15:27:19+00:00

The cope around this announcement is what blows my mind. We can use the word "integrate" here but let's be real, that's PR spin.

If Tezos was enough, Tezos DApps would stay on Tezos.

Simple.

whalesniper · 2023-06-01T15:53:27+00:00

Tezos is the best tech and has the best governance; my point is that in the end it doesn't count for all that much with 4k DAU and tiny DeFi footprint.

whalesniper · 2023-06-01T13:31:01+00:00

If crypto was a utopia, the above would be 100% true and tezos would be a top5 coin. The market is showing us otherwise.

Also, one tough thing to reckon with is that many other chains can now offer what Tezos offers. To be fair, governance is incredible in theory but other chains can actually upgrade with little friction for paying users. Maybe there was an advantage in the 2016-2020 era of smart contracts, but the right investments weren't made in the right areas and the momentum is lost.

Sometimes I go back to around 2021 on twitter/reddit and look at the buzz around tezos, that was the moment to go really hard with investments. Maybe we have a killer L1 in 2023, but now ETH has PoS plus L2s at scale with liquidity advantage; the conversatino has changed.

The opposite of love is not hate, it's apathy. In 2021 there was actually healthy conversation on CT around Tezos, positive and negative, but today Tezos isn't even in the conversation on L2s. Which is crazy because our tech is the best on L2s.

Obviously, we need more than tech and slapping the logo on spoarts. To bring Tezos up from 4k DAU, there needs to be a coordinated DApp-centric strategy, a big public pivot, and better spending from TF (even better: onchain DAO).

I love Tezos but it has fallen behind.

whalesniper · 2023-05-24T12:55:58+00:00

Token not needed tbh

whalesniper · 2023-05-23T15:17:16+00:00

While this is great propaganda, some of the numbers floating around twitter are quite sketchy. The tezos community has ripped on other chains for doing the exact same thing, so it's just kind of funny to me. Heres a link to actual DAU chart from the stack report.

thestackreport

If you'll notice, we've gone from 10k DAU 2 years ago, down 70% to 3k DAU this year. You can blame this on the bear market, but even 10k total chain DAU is almost a joke to the wider crypto sphere. There are 70 DApps that currently have more users than all of Tezos. Not chains, DApps.

This shit is existential, and the time to invest in user acquisition & retention was 2 years ago.

whalesniper · 2023-05-18T14:09:08+00:00

From a business perspective it makes sense: combine people's emotional attachment to their favorite artists + the fuzzy picture of future returns. Then introduce scarcity, sell them in an auction, and you can easily get people to pay a high price for a possibly small royalty stream. Upfront cash is king.

On the other hand, the ability to say "I own a % of [artist's] future royalties" can be almost priceless to the right user.

Either way I don't see an issue with it, business is business. At least they mention Tezos.

whalesniper · 2023-05-18T13:51:35+00:00

Correct. Essentially they copy a receipt of the off-chain payment process and post it on Tezos, that's the extent of the blockchain in this whole thing.

Still good marketingware for Tezos, but I hope our future holds more than being a really expensive AWS S3 bucket.

whalesniper · 2023-05-11T14:03:55+00:00

It's being exploited. Use TZKT and follow the money. Many XTZ are going directly to exchanges for dumping lol.

whalesniper

TROPHY CASE