Participate with confidence based on Bison Trails’ expertise and experience on the Tezos network.
Tezos is a Proof of Stake protocol with on-chain governance and formal verification for smart contracts. It is a blockchain that can evolve by upgrading itself. Stakeholders vote on amendments to the protocol, including amendments to the voting procedure itself, to reach social consensus on proposals. Tezos also offers a platform to build decentralized applications (dApps) and flexible delegation conditions.
Validator nodes on Tezos are referred to as Bakers. Bakers carry out two activities: baking and endorsing. Baking is the process of creating new blocks, while endorsing is the process of verifying blocks created by others to ensure that they were baked correctly
Each block on the Tezos blockchain is “baked” (produced) by a randomly selected baker, and endorsed (referred to as “notarizing”) by 32 other randomly selected bakers.
Bakers may also accept delegation to their node. Delegation is the process by which one can assign the baking and endorsing rights of their tokens to another baker to perform those actions on their behalf. The nominated baker charges a small fee for doing so.
Delegation is completely non-custodial on Tezos, and can be reassigned at any time. The flexibility of delegation, along with the low fees to change one’s nomination, act as a method to incentivize validators to behave properly in the network.
Over-delegation happens when a baker has XTZ delegated to it and puts up too few XTZ as a security deposit. The security deposit is used during each cycle for baking and endorsing, and when it runs out, the baker will miss it’s remaining baking and endorsing slots.
One’s total reward during a cycle is capped based on the available bond, so we do not recommend delegating to over-delegated bakers, as delegates run the risk of getting a reduction in (or no participatory rewards.
The Tezos rate of reward can fluctuate and depends on several variables, including block rewards, endorsement rewards, block time, daily network rewards and total staked.
For every block, one validator is randomly selected to bake and 32 validators are selected to endorse. The Baker receives the block reward and the fees of all transactions successfully included in the block, and the Endorsers receive the endorsement rewards.
See the Tezos explorer for the latest reward numbers.
Only Baker security deposits, known as bonds, can be slashed in the Tezos protocol in the case of malicious activity.
If you delegate to a Baker, you are never in danger of being slashed, nor can a baker steal the tokens delegated to them. However, bakers can avoid paying out owed participatory rewards to their delegates. There is no set cadence for reward payouts, so it's important to delegate to a baker that consistently and regularly pays out rewards.
Tezos has a formal, on-chain governance mechanism wherein all stakeholders can participate in protocol governance and reach consensus on proposed protocol amendments. Visit Tezos Agora to learn more and to participate directly.
Tezos is an open-source platform for assets and applications backed by a global community of validators, researchers, and builders.