Who's In Control of Tezos? That Answer Is About to Change

Rew Paulicek, founder of Happy Tezos, isn't the only one excited about the upcoming milestone in the life of Tezos, a blockchain network that launched three weeks ago after a series of long, painful delays.

Every three days or so - the exact intervals vary - Tezos enters a new "Cycle." At some point this weekend, likely Saturday, it will cross the threshold into the seventh cycle.

When that happens, the Tezos Foundation, the entity that conducted Tezos' initial coin offering last year and launched the network at the end of June, will give up sole control of the Tezos blockchain.

With this change, both the first generation of Tezos startups and its token holders will have roles to play in the network.

Since launch, every one of Tezos' eight "Bakers" - validators who serve a similar function to miners in other blockchains - has been controlled by the foundation, as this image shows.

With the beginning of the next cycle, the opportunity to "Bake" will open up to the broader community, and Tezos will begin to assume something closer to the final, decentralized form its founders envisioned.

Like EOS, the Tezos network reaches consensus about the state of the blockchain using delegated proof-of-stake, rather than the proof-of-work system familiar to bitcoin and ethereum.

The way Tezos' system works, only nodes with a "Roll" of 10,000 XTZ tokens can bake.

"We're thrilled to see the level of participation in baking," a Tezos Foundation spokesperson told CoinDesk, adding: "Over 96 percent of the tokens activated are taking part in baking or delegation."

Every service CoinDesk spoke to, as well as the Tezos Foundation, said the same thing: the relationship between token-holder and baker is not governed by smart contracts, but rather is "Off-chain" - at least for the time being.