The Baking Sheet - Issue #198

Adaptive Issuance: Transforming Tezos Staking

Adaptive Issuance: Transforming Tezos Staking

Tezos Community Embraces Change: Paris B Wins and Enters Exploration Phase

In a resounding show of preference, the Tezos community has chosen Paris B as the victor in the race for the blockchain's 16th protocol upgrade. This decision ushers in the next crucial phase of Tezos' governance process, the Exploration Phase, where the future of Paris B hangs in the balance, dependent on the collective will of the Tezos Baking community.

A Victory for Paris B

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After a highly anticipated voting period, Paris B emerged as the clear favorite, securing its position as the next potential milestone in Tezos' continuous evolution. Garnering a substantial 74.2% of the votes, the community's choice underscores a strong desire for the immediate enhancements and innovations that Paris B promises. This outcome not only marks a pivotal moment in Tezos' history but also reaffirms the community's readiness to embrace change.

The Exploration Phase: A Call to Action

With Paris B's victory, the focus now shifts to the Exploration Phase, a critical juncture where the Tezos Baking community's involvement becomes paramount. During this phase, bakers are called upon to cast their votes in a decisive round that will determine whether Paris B will be implemented on the Tezos blockchain.

To move forward, two key thresholds must be met:

  • Quorum Requirement: At least 51.37% of the baking community must participate in the vote, ensuring that the decision is representative of the wider community.

  • Supermajority Approval: A compelling 80% supermajority is required for Paris B's implementation, a testament to the level of consensus needed for such a significant upgrade.

The Significance of Paris B

Paris B stands as a beacon of innovation, offering a suite of enhancements that promise to elevate the Tezos ecosystem. Key features include:

  • Reduced Block Times: Accelerating transactions and improving overall network efficiency without compromising security.

  • Data Availability Layer (DAL): Boosting throughput and scalability, particularly for Smart Rollups, by facilitating data attestation outside Layer 1 blocks.

  • Adaptive Issuance and Staking: Refining Tezos' economic model for greater security and sustainability.

  • Adaptive Slashing: Introducing nuanced penalties for protocol violations, bolstering network security.

What You Need to Know: Tezos Paris Upgrade

Two Proposals, One Goal: The Paris upgrade presents two proposals, Paris A and Paris B, both aimed at enhancing the Tezos protocol but offering different paths regarding Adaptive Issuance, Staking, and Adaptive Slashing.

Speed and Efficiency: Block times are reduced to 10 seconds, lowering latency and enabling faster finality without sacrificing security or decentralization.

Data Availability Layer Activation: The DAL is activated on Mainnet, significantly boosting the throughput and scalability of Smart Rollups by attesting data outside Layer 1 blocks.

Proof-of-Stake Innovations:

Adaptive Issuance and Staking aim to adjust the economics of Tezos to better fit real-world usage, promoting a more secure and economically sustainable blockchain.

Adaptive Slashing differentiates penalties based on the severity and intent behind protocol violations, enhancing network security.

Participation Options: Paris B includes immediate activation of the new features, while Paris A allows bakers to vote on their activation at a later stage, offering flexibility and community engagement in decision-making.

A United Front

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As the Exploration Phase commences, the unity and active participation of the Tezos Baking community will be crucial. This phase is not just about confirming a technical upgrade; it's a testament to the collective will and vision of the Tezos ecosystem. The successful implementation of Paris B could mark a significant leap forward in blockchain technology, showcasing Tezos' commitment to innovation, scalability, and security.

In these pivotal times, the strength and efficiency of the Tezos governance model are once again put to the test. The choice made by the bakers in this Exploration Phase will not only shape the immediate future of the Tezos blockchain but also reinforce its position as a leader in embracing technological advancements and community-driven governance.

As the Tezos community embarks on this decisive phase, the anticipation and support for Paris B reflect the ecosystem's resilience and forward-thinking ethos. The journey towards implementing Paris B is a collective endeavor, underscored by the belief in a more scalable, secure, and innovative Tezos.

Adaptive Issuance: Transforming Tezos Staking and Enhancing Network Security

With the introduction of Adaptive Issuance in the Paris Protocol proposal, the Tezos network is set to undergo a substantial change in how staking rewards are determined and distributed. This adjustment, developed in close collaboration with key Tezos ecosystem stakeholders, aims to address and clarify prevalent questions and confusion regarding its implementation. It's a pivotal shift from the traditional fixed annual issuance rate, designed to optimize the staking economics on the Tezos blockchain by adjusting the reward rate dynamically. This article aims to provide clear insights into Adaptive Issuance, its impact on network security, and the significant updates introduced in the Paris proposal.

Clarifying Adaptive Issuance

Until now, Tezos has operated with a fixed issuance rate of approximately 5% of the total supply annually to incentivize bakers, the network's validators. Although this system has supported network security, it has introduced inefficiencies, particularly in reward redistribution via the delegation system. Adaptive Issuance seeks to rectify this by allowing the network to automatically adjust the reward rate. This adjustment is based on a target ratio of staked tez to the total supply, ensuring that new tez is generated only as needed to maintain an optimal level of network security.

What You Need to Know: Key Points on Adaptive Issuance

  • Automatic Reward Adjustment: Adaptive Issuance tailors staking rewards to current network needs, increasing them to boost staking when necessary, and reducing them to prevent excess dilution.

  • Reduction of Inefficiencies: This mechanism aims to streamline reward distribution, making the issuance rate more responsive to the network's actual requirements.

  • Target Staking Ratio: A set goal of 50% staked tez to total supply enhances network participation and security, with staked funds meeting higher security criteria than under the previous system.

  • Staker Role Introduction: A novel role allowing tez holders to stake directly, increasing security measures and streamlining reward processes.

  • Measured Rate Transition: Initially, the Adaptive Issuance rate will vary within a narrow range of 4.5% to 5.5%, gradually expanding over six months to a broader range of 0.25% to 10%, ensuring a smooth transition for the ecosystem.

  • Focused Penalties: Adaptive Slashing introduces nuanced penalties for protocol violations, enhancing network integrity while ensuring fairness.

Impact and Improvements

Adaptive Issuance's dynamic approach addresses key issues with the fixed rate system by aligning reward distribution more closely with network needs. This adjustment reduces the dilution for tez holders and simplifies reward management for custodians, presenting Tezos as a more practical option for a range of applications, from decentralized finance to digital governance.

Enhancing Security and Liquidity

The mechanism's design, including a staking target of 50% of the tez supply, ensures robust network participation. Unlike the delegated system, where funds are not at risk, Adaptive Issuance mandates staked tez to be actively securing the network. This shift not only elevates the level of security but also maintains sufficient liquidity within the ecosystem.

Paris Proposal Innovations

The Paris proposal introduces critical refinements to Adaptive Issuance:

  • Smooth Reward Rate Adjustment: Ensures the reward rate range gradually widens, allowing the ecosystem to adapt without sudden changes.

  • Precision in Penalties: Differentiates between types of protocol violations, protecting network participants from undue losses while deterring harmful activities.

  • New Participation Dynamics: Redefines ecosystem roles by introducing stakers, enabling direct participation in security without transferring custody of funds, thereby democratizing reward distribution.

Forward Steps

As Tezos moves towards implementing Adaptive Issuance, the involvement and feedback of the community are crucial. Participation in the Weeklynet testnet and engagement with simulation tools will play a significant role in refining this feature. This collaborative effort is essential for adjusting the economic model of the Tezos ecosystem to meet current needs and expectations.

The shift towards Adaptive Issuance signifies a major step in Tezos' development, moving towards a more flexible, efficient, and user-centric blockchain. This mechanism not only aims to enhance network security but also to provide a clearer, more equitable framework for staking rewards.

Engaging with Adaptive Issuance

For Tezos, the journey toward a refined staking mechanism involves the entire community. Through active exploration and constructive feedback, stakeholders can contribute to shaping a feature that promises to redefine the Tezos economic landscape. As the community navigates this transition, the collective effort will further solidify Tezos' position as a sophisticated, secure, and accessible blockchain platform.

This Week in the Tezos Ecosystem

TZ APAC Welcomes Seven Startups to Fortify Labs: A Milestone for Tezos Ecosystem

TZ APAC announced the induction of seven promising startups into Fortify Labs, its Web3 startup studio focused on the Tezos and Etherlink platforms. This initiative marks a significant step toward enhancing the blockchain ecosystem's growth and diversity.

Fortify Labs: Empowering Startups

Fortify Labs distinguishes itself by offering robust support to startups, linking them with the extensive resources of the global Tezos ecosystem, and facilitating direct collaboration with TZ APAC's team. The selection of startups from sectors such as gaming, NFTs, DeFi, AI, and infrastructure was rigorous, with the final choices standing out due to their technical prowess and potential for impact.

Highlighting the New Startups

  • Akaswap: Leading NFT marketplace in Asia on Tezos, now venturing into Web3 gaming.

  • Ladder Protocol: A decentralized AMM akin to "Uniswap for NFTs," focusing on GameFi assets for seamless NFT liquidity.

  • OnChainVision (OCV) Labs: Innovators on Etherlink, offering an interactive asset builder and utilizing AI for efficient JPEG conversion.

  • Questflow: An AI-driven platform that simplifies workflow automation, making programming accessible to a broader audience.

  • Renora: A platform offering non-custodial, automated investment strategies on Tezos, enabling passive asset growth.

  • TaskOn: Decentralized solution for Web3 tasks, aiming to streamline collaboration and engagement across the community.

  • YourD: Facilitates the transition to Web3 with decentralized identity verification and crypto payments, focusing on privacy and regulatory compliance.

Driving Growth and Community Engagement

Julian Low, an entrepreneur and mentor at Fortify Labs, shared his excitement about the startups, emphasizing the challenges and rewards of building within the blockchain space and pledging support for their development.

Furthermore, the launch of TZ Apex, a community rewards program, aims to deepen engagement with Tezos-based projects. It promises rewards such as Tez, NFTs, and exclusive merchandise to participants.

TZ APAC's Commitment to the Ecosystem

Through Fortify Labs and TZ Apex, TZ APAC is at the forefront of fostering a vibrant and inclusive blockchain ecosystem. By backing these startups, TZ APAC not only aids in their development but also encourages the broader community to explore and engage with new advancements in blockchain technology, paving the way for a dynamic future in digital solutions.

Tezos Foundation Grants Support to Sugar Gaming for Sugarverse Saga

The Tezos Foundation recently announced its support for Sugar Gaming, a Bulgarian game studio initiated by the founders of XS Software in 2022. This endorsement comes as a strategic grant aimed at fostering the growth of Web3 gaming on the Tezos blockchain through the development of Sugarverse, a series of five games. The first game to debut from this saga is Sugar Match, a Web3 PVP Match-3 mobile game inspired by the successful Match Masters.

Sugarverse: A New Chapter in Web3 Gaming on Tezos

Sugar Gaming's venture, Sugarverse, represents a significant step forward in integrating blockchain technology with mobile gaming, creating a dynamic player experience. By launching Sugar Match, the studio sets the foundation for an engaging series of games on the Tezos blockchain, illustrating the flexibility and adaptability of Tezos for gaming applications.

Engaging Gamers in the Tezos Ecosystem

With the experience of engaging over 60 million gamers from previous projects, Sugar Gaming plans to leverage this audience to introduce them to Web3 gaming on the Tezos blockchain. Through strategic communications like eDMs and in-app notifications, the studio aims to smoothly transition a large user base into the innovative world of blockchain-based gaming, enhancing the Tezos ecosystem's visibility and engagement.

Enhancing Gameplay with Tezos NFTs

An intriguing aspect of the Sugarverse saga is the incorporation of Sugarbear NFTs, which allows for unique in-game enhancements and personalization. These NFTs, tradable within the game, enable players to customize their gameplay strategies in PVP matches, showcasing the Tezos blockchain's capability to support complex and user-engaging NFT functionalities within gaming applications.

Invitation to Explore Sugarverse on Tezos

The grant from the Tezos Foundation to Sugar Gaming underscores the blockchain's commitment to supporting developments that enhance its ecosystem, particularly in the gaming sector. As Sugarverse takes its first steps with the launch of Sugar Match, it opens up new opportunities for gamers and developers alike to explore the benefits of blockchain technology in gaming.

Interested parties and gamers are encouraged to learn more about this exciting venture by visiting the official Sugarverse website: Explore Sugarverse.

This collaboration between the Tezos Foundation and Sugar Gaming highlights the potential of the Tezos blockchain as a robust platform for Web3 gaming, driving forward the integration of blockchain technology in digital entertainment and expanding the reach and capabilities of the Tezos ecosystem.

Unicorn DAO Joins Forces with Tezos Foundation to Expand Artistic Collaborations

Unicorn DAO proudly announces its new partnership with the Tezos Foundation as it joins the Tezos ecosystem. This collaboration marks a significant step towards enriching Unicorn DAO’s vault with a vibrant community of both emerging and established artists. The partnership aims to leverage the Tezos platform’s capabilities to support and showcase creative works through NFTs.

Key Points of the Announcement:

  • Partnership Goals: Unicorn DAO aims to build its art collection within the Tezos ecosystem, discovering new artists and collecting innovative works along the way.

  • Community Engagement: Over the next few months, Unicorn DAO will unveil a series of initiatives calling for community involvement to help expand its collection of art.

  • Artistic and Activist Endeavors: The DAO has already begun identifying notable artists who use their work for activism, similar to co-founder @nadyariot of @pussyriot, who is actively engaged with Tezos and objkt.

  • Promotion of Clean NFTs: Unicorn DAO is set to promote environmentally friendly NFTs within Tezos’ flourishing artistic ecosystem.

  • Weekly Artist Highlights: A weekly series will spotlight artists supported by Unicorn DAO, inviting the community to participate by suggesting and showcasing art.

As Unicorn DAO integrates into the Tezos ecosystem, it anticipates becoming a part of a fresh and dynamic environment that supports artistic expression and digital innovation in art collection and curation. Integrates Tezos Blockchain to Enhance Web3 Project Launchpad, a prominent IDO launchpad for Web3 projects, is set to elevate its platform by integrating with the Tezos blockchain, in partnership with Kukai Wallet. This integration aims to enhance the efficiency, security, and transparency of decentralized project management. Games developed on Tezos and linked with Openpad will also receive additional marketing support.

Key Highlights of the Integration:

  • Tezos Blockchain Features: Utilizes Tezos' adaptability, self-amending protocol, and community governance system.

  • Environmental and Governance Benefits: Employs Tezos' Liquid Proof-of-Stake (LPoS) system, promoting environmental sustainability and broader network participation.

  • Strategic Collaboration: Games built on Tezos and integrated with Openpad benefit from marketing support, broadening their reach and impact.

Technical Advancements on Openpad:

  • Deployment on Etherlink: Utilizes Etherlink, a cutting-edge L2 EVM-compatible Smart Rollup built on Tezos, offering sub-second latency and enhanced security features.

  • Innovative Features: Includes a decentralized sequencer and MEV protection to secure user transactions and ensure equitable operations.

  • Smart Contracts for Governance: Employs Tezos smart contracts to facilitate decentralized governance, allowing stakeholders to manage projects collaboratively and securely.

Security and Engagement Enhancements:

  • Document Security: Ensures document integrity and authorship through immutable recording of document hashes on the Tezos blockchain.

  • Tokenization and Incentives: Leverages the Tezos platform for issuing tokens and rewarding contributors, enhancing user engagement and participation within the ecosystem.

As this integration unfolds, Openpad and Tezos are poised to unlock a new level of collaboration in the Web3 space, setting a benchmark for project management and development on blockchain platforms.

Storm x Tezos

STORM provides consultancy services to support Tezos projects in marketing, legal, BD, and fundraising. Based in Switzerland, they are committed to taking a leading role in the evolution of the blockchain and crypto ecosystem. Check them out here:

Now Streaming

🔴 Now Streaming: Gaming on Tezos | BattleRise

BattleRise is a fantasy mobile role-playing game (RPG) developed by Triumph Games. Set in a mythical world, EOS, players can participate in turn-based combat with various game modes, such as Dungeon Run, Arena, and Adventure.

Powered by Tezos, BattleRise will eventually leverage the Tezos blockchain for various things, such as trading in-game items like artifacts, weapons, and more.

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