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Invest in Tezos in 2022

Last updated 22nd Sep 2022
Disclosure

Tezos is a blockchain network designed with a core principle of constant evolution and improvement. Originally, the founders Arthur and Kathleen Breitan designed it in this way to oppose the rigid nature of Bitcoin. Tezos offers smart contract compatibility and a place for developers to build applications like dApps, Defi services, and DEXs.

This article will tell you everything you need to know about this protocol, where you can buy it, how you can buy it, and advise if now is the time to buy-in.

Best Way to Invest in Tezos in 2022

As Tezos is a lesser-known and less popular token than some others, it can be difficult to find a place to make your purchase and trades. Here is a list of the best ways to invest in Tezos:

1
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What Is Tezos - Quick Overview

Name and ticker Tezos (XTZ)

Date launched June 2018

Circulating supply | max supply: 875,661,064.02 | uncapped

Blockchain network Tezos blockchain

Creators Kathleen and Arthur Breitman

Use-cases Developing, smart contracts, Defi, NFT

Social media Twitter | Reddit

What Is Tezos – Explained

History

Tezos was originally founded all the way back in 2014 by married couple Arthur and Kathleen Breitman. Arthur Breitman holds a master's degree in mathematics from New York and after went on to work for big-player financial institutions like Morgan Stanley and Goldman Sachs as a quantitative analyst; after this, he found a role at Google-based autonomous driving company Waymo. Kathleen holds a bachelor of arts and went on to also work for well-known wall street companies, including a stint working for Ray Dalio’s investment fund.

The pair had always been crypto enthusiasts and were active in the very early communities around cryptocurrencies and blockchain technology. Originally they had believed Bitcoin would continue to dominate the market by absorbing all of the best features that altcoins presented - but of course, this was not the way things developed.

Arthur ended up writing his own white paper as the years progressed, originally under a pseudonym in homage to the Bitcoin Satoshi model, with clear principles that rebelled against the ever-more conservative Bitcoiners. He proposed putting community governance at the heart of the project, with this governance driving the protocol’s evolution.

The Breitman pair initially struggled to get funding for this project, and eventually started the Tezos foundation which would go on to support the network’s development. Tezos released its ICO in 2017 and raised an astonishing $232 million, but the launch date was subsequently delayed due to a host of legal issues.

The Purpose

The idea of Tezos was to oppose Bitcoin’s network rigidity and instead develop a network with evolution at its very core, giving it flexibility and freedom. It is a network for developers to build on, it has smart contract compatibility, and again, it is primarily focused on keeping a state of ongoing development.

There are already a host of dApps built on this network and it has over $100 million locked on its ecosystem. These dApps dramatically range in purpose, with some offering DeFi services and others providing NFT marketplaces.

How It Works

Tezos is a Proof-of-Stake system at its core and validators on this network are known as Bakers; you must stake a minimum amount of 8,000 XTZ coins. Its governance structure consists of five key stages: Proposal, explanation, testing, promotion, and adoption. Bakers are able to submit up to 20 proposals and the way users vote on these proposals is a little complex. 1 vote is the same as 1 roll; a roll is the minimum amount of XTZ a user must stake to be a baker, so 8,000 XTZ. Stages then require a certain amount of votes to pass through each stage with the adoption stage requiring 80%. Once this process has been completed the resulting changes are known as Amendments and so far there have been 8 of these.

How To Buy Tezos

To buy any token you will need an interface. There are a host of different options to you, but most will require you to verify your identity and create an account with some sort of platform. Here we have laid out your options.

You can buy XTZ using any of the following platforms:

  • Brokerage: XTZ is only available on some brokerages when compared with other cryptocurrencies - this does however include eToro and Libertex.

  • Exchange: Almost all exchanges will list XTZ because they offer a good range of variety and it's one of the popular tokens to trade on the market; exchanges provide slightly lower fees than most brokerages but can be more complicated.

  • Decentralized Exchange (DEX): These operate in the same way as a traditional exchange, but are unregulated and are not owned/operated by a singular entity. DEXs usually have a great range of coins for users to choose from as they are a key part of the blockchain metaverse and have almost no restrictions.

  • P2P: Person-to-person exchanges offer great rates due to the lack of a middle man; it's best to think of this as swapping rather than trading.

How To Sell Tezos

You can sell your XTZ using any of the methods we have shown above under How To Buy Tezos. Again, most platforms will require you to verify your identity and create an account; additionally, you will need to own the token directly or via a derivative.

With some platforms, like an exchange, you are able to transfer any holding of XTZ you may already have to that platform and then sell it there. Whereas with something like eToro you will first need to buy XTZ on the platform, and then also sell it there.

We advise that you first check the fees you may incur when transferring crypto assets from platform to platform as it can be quite costly.

Alternative Ways To Invest in Tezos

Due to the rising popularity of cryptocurrencies, we are now seeing tokens/coins becoming available for purchase in the form of more traditional financial products like derivatives. This merging of traditional financial products and crypto products is dramatically expanding the ways in which an investor can own their assets. Here is a breakdown of some of the alternative ways you can invest in Tezos:

Contracts For Difference

You can use brokerages to buy XTZ CFDs. CFDs are a contract you agree to when you complete your purchase. They pay you rewards if the asset price rises or you incur losses if it goes down. You do not own or hold the asset with derivatives.

Exchange Traded Fund

An ETF is best thought of as a collection of different assets relating to a specific product. For example, an ETF could include stocks, commodities, bonds or a mixture of them. It is an alternative type of security that tracks the asset in a different way to just buying it outright.

Tezos now has its own ETP (Exchange Traded Product) called 21shares Tezos ETP.

Trusts

Trusts are essentially a pot of managed assets of funds. They are legally managed by a legal entity that has the right to manage these assets for the benefit of a third party. There is currently a Grayscale Tezos Trust in the works.

XTZ is not currently available to buy in either of the following ways:

  • Index Funds

  • Mutual Funds

Is It Safe To Invest in Tezos Right Now?

Crypto markets are extremely volatile and carry huge risks, so we advise you to always be careful with these assets and your own due diligence. The same especially applies to CFDs; 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Tezos has a very interesting concept and is clearly trying to provide valued utility to the blockchain space. A network that has a clear vision and a clear strategy behind it is always a coin/token to keep your eye on. Tezos currently sits as the 46th biggest cryptocurrency on the market by market cap; clearly, there is room for XTZ to grow into many competing networks for it to overtake.

The only concerns that surround the project that may affect its market valuation are that it is somewhat complex for developers. Some people suggest that the development language it is written in makes it difficult to build on, and it is clear that there is significantly less building going on on this platform when compared to others.

Overall, Tezos is a coin worth keeping your eye on and keeping up with the developments it makes.

Joshua Sherrard-Bewhay

Joshua Sherrard-Bewhay

Josh is a finance and Blockchain technical writer with experience in project design, consultancy and reporting. He is well-versed in white paper design, blog construction and freelance journalism. His academic credentials are in International Relations, Environmental Regulation and International Law. In his spare time he works as a sustainability analyst for a FinTech start-up Oxari and a private English tutor.