Tezos in Trouble as Disagreement Between Tezos Foundation and Its Creators Causes a Meltdown

tezos

Tezos is one blockchain that is known to be atypical when it comes to offering financial incentives for maintaining harmony on their ledgers. There’s no other blockchain that has a strong system embedded in the blockchain to amend rules that govern the blockchain network and its rewards over time. All other blockchains have centralized development teams (miners) to come up with the design choices for this reason.

How Tezos Works

Tezos is a smart contract platform that reduces costs and automates complicated transactions that otherwise take up a lot of time and effort. The development approach for this platform is different. It works by creating rules of governance for stakeholders when the system needs to be upgraded. These changes and upgrades are then made automatically to the blockchain network.

When one developer suggests an upgrade, they attach an invoice that is paid out to them when their upgrade is approved and included in the system. This method adopted by Tezos encourages people to participate in developing the blockchain further.

Developers have a great incentive to be paid out immediately for their maintenance work for the network. The XTZ (or Tez token) allows them to have immediate payment and they don’t have to work for internet fame, or seek out corporate sponsorships and foundation salaries.

This may seem to compromise the integrity of key features of the network, but it doesn’t as there are mathematical proofs to verify key properties to continue over time. There are additional incentives for developers to instantly coordinate over the chain to find out bugs in the system or implement specific features to boost the performance of the system. In a way it’s decentralized but decision-making can be done collaboratively.

The Meltdown at Tezos: Control for Power

Notwithstanding its innovative approach to blockchain, Tezos is under the hammer as Arthur and Kathleen Breitman blame Johann Gevers for the mismanagement of their funds that come up to be $400 million. The funds were raised in the ICO (Initial Coin Offering) for the platform. Founders and creators of the platform are going head to head.

Johann Gevers, Founder and President of Tezos Foundation, said that the claims made against him by the creators of Tezos (the Breitmans) are ridiculous and outrageous. He calls it an attempt to gain more control over the 361,122 Ether and 65703 Bitcoins that were raised successfully in the ICO event. This was one of the largest ICO events ever to have taken place.

The Breitmans had initially requested the foundation to be created and Gevers to be appointed. This is what makes the meltdown all the more surprising.

The Swiss law suggests that the foundation be completely autonomous of the platform. That didn’t stop a 46-page letter from being delivered by the creators’ attorneys to the Foundation’s board. The letter urges the removal of Gevers from his position and creating a new structure for the system. All this would result in the creators having more control over Tezos.

The argument certainly got heated with Johann Gevers called it an “illegal coup.”

Whatever the case really is, it spells trouble for Tezos, as its platform is yet to be launched and there are a lot of disgruntled investors. Let’s see if it all works out in the end for the smart contracts platform.

 

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