What the Community Wants from Tezos: We Checked Out Some Proposals on Agora

What the Community Wants from Tezos: We Checked Out Some Proposals on Agora

Every Tezos protocol update boasts major innovations. Granada has liquidity baking, Ithaca has the Tenderbake consensus algorithm, and Jakarta promises an integrated L2. But what changes does the community suggest?

We’ve read dozens of posts on Tezos Agora and here they are, the suggestions that could make Tezos even better.

Adaptable Inflation

Cryptocurrency inflation is the rate at which the number of tokens in circulation increases. For example, 10% inflation means that every year the number of tokens increases by 10%.

The number of tokens in circulation does not grow by itself. They are mined by node owners, i.e. miners, validators, or bakers. That’s how they get rewarded for keeping the network secure. Inflation in Tezos is essentially fixed: bakers get 40-42 million tez a year regardless of how much tez they staked.

Arthur Breitman suggested a mechanism for adjusting inflation for the amount of funds blocked. If bakers block a lot of funds and make the network “too safe,” the rewards are reduced. If there are too few tez staked, the inflation rate goes up, and the bakers get an incentive to contribute more tez and thus boost the economic security of Tezos. We suggest you to read the original proposal to better understand the concept.

Signatures for Messages

When sending tez, calling a smart contract, or delegating, the wallet signs the transaction with a private key. Through the signature, it can be established that the owner of a particular public address performed the action.

Fred Yankowski proposed a standard for offline message signing. It can be used to securely prove ownership of a particular address. Instead of signing transactions or requests that potentially compromise the security of a private key, the wallet signs a regular string.

The Consensus Key

A baker’s public key, or, so to speak, their address, identifies the baker. It is tied to a private key that can be used to manage the tokens at said address. If a baker decides to transfer their tez to another address and continue baking on it, their delegates will have to manually re-delegate funds to the new public key.

Nicholas Ochem suggested the introduction of a new key pair, the consensus key. Baker could create such a pair and delegate to it the right to sign blocks and confirm transactions.

It is to the consensus key that users delegate funds. A baker can move their funds to another address and from there delegate the right to bake to the consensus key, while the delegates won’t have to do anything.


In Tezos, a baker chooses the order of transactions in a block. They have an opportunity to benefit from this: for example, to look through the transactions in the queue and enable their own arbitrage transactions before buying tokens on DEX.

Nicholas Ochem together with a team of enthusiasts developed Flashbake Protect, an off-chain system for sending transactions to a baker. Such transactions cannot be viewed until they are included in the block, and consequently, the baker cannot benefit from them.

With flashbake, user transactions are first sent to the relay. Bakers run a separate software service in parallel with the Tezos node, which accepts transactions from the relay and holds a closed auction. The service sorts hidden transactions by the amount of transaction fees and includes them in a block in that order.

Compatibility with EVM

This proposal is the only one of the ideas reviewed here without implementation in code.

Almost all popular blockchains use EVMs and Solidity smart contracts. This approach allows blockchain projects to scale to other chains, attracting more liquidity and users.

EVM compatibility implies a way to wrap any Tezos asset in an ERC-20 or ERC-721 interface. That way Tezos assets can be added to DEX and other DeFi-applications in popular EVM chains.

The task is complicated but theoretically solvable. For example, the Velas blockchain with the Solana eBPF native virtual machine immediately offered EVM compatibility via virtual blockchain and native-node compatibility with EVM-RPC.

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