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Tezos is catching the eye of the storm as it is cost effective with multiple benefits. Can it give a big fight to ethereum? Yes it could pose a serious challenge to the ethereum market with its defi, smart contracts and low cost benefits.
- Tezos enable the token owners to move freely from one network to another with a very minimal cost
- All the wrapped ethereum tokens are compatible with Tezos FA 2 standard
Tezos is a proof-of-stake cryptocurrency with some exciting potential. It offers peer-to-peer transactions through its native XTZ cryptocurrency. The total supply of XTZ is capped at 763 million. Right now 607 million are in circulation. Tezos is proof of stake, has smart contracts, has Dapps and one of the unique features of Tezos is that it has a self-amending blockchain.
Why Tezos could kill Ethereum
Tezos starts with protocol to solve problems. Every cryptocurrency surfaces the problem of operating code. There are three common kinds of updates: Sidechains, soft forks and hard forks.
It has the biggest initial coin offering (ICO) of all time, raising $232 million. However, it has to deal with many adversities and delays after the launch.
Ethereum’s deficiencies like a network with faster transactions, more scalability, lower fees and effectively do just about everything better, et c.are coming under attack from all corners.
Wrap protocol from Bender Labs is a highly interoperable decentralized protocol that will enable the transformation and transfer of ethereum tokens, including ERC-20 and ERC-721 standards, to the Tezos blockchain.
Tezos has formed a wrapped version where the ethereum tokens are locked on the blockchain through this protocol, which is created on the corresponding blockchain.
All the wrapped ethereum tokens are compatible with Tezos FA 2 standard, allowing them to be freely used within the network.
A challenge to Eethereum’s existence
Bender Lab’s objective is not to beat there. The idea of building a more open, interoperable decentralized financial system does challenge the network’s dominance in Defi and smart contracts.
Hence, it will enable the token owners to move freely from one network to another with a very minimal cost. The network provides multiple choices to the token owners and allows voting with their feet.
In comparison to ethereum, Tezos is a much more affordable ecosystem for developers and users. It can seamlessly migrate between chains. This may represent a threat but it is cost-effective at the same time.
What made ethereum vulnerable to Tezos
One of the main reasons is the high cost of ethereum that is difficult to predict. On the other hand, Tezos offers lower transaction costs with no demonstrable changes in user experience.
Secondly, Ethereum suffers from some limitations that developers can only fix through significant upgrades to address network issues like scaling and security. While Tezos solves this problem by functioning as a self-amending blockchain network.
If the users are given a choice to move freely on the network then Ethereum might benefit from expanded use. This can happen only if Defi and art contracts are expanded, the two networks will compete for demand as each continually innovates and upgrades to attract participation. And the icing on the cake would be the low cost of transitioning, which will invite more participation.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
