The number of Tezos bakers is increasing.
The term of the protocol for a validator (its equivalent of the bitcoin miners), the bakers are crucial to guarantee the security of the nascent network. And that is all the more necessary given the value of the funds at stake.
Since they raised $ 232 million in 2017, the protocol has had a very rough road to take off. However, once live, it has become one of the top 20 blockchain by market capitalization, with a consistent valuation above $ 1 billion. In addition, something unusual has happened in the new blockchain.
Seeing the number of tokens staked to validate and the number of people involved is probably the best way to evaluate the stability of the new network from the beginning.
“I have been particularly impressed by the role the community has played in this process,” said Mike Reinhart of Obsidian Systems in an email to Coindesk, which is creating software for bakers.
So far, it has been a generally slow increase in bakers.
At present, there are 108 bakers working in Tezos, in addition to the nodes managed by the Tezos Foundation, according to TzScan.io, a block explorer for the protocol. In the launching, all the validation was carried out by the Tezos Foundation, but it was opened with the seventh cycle (each cycle is executed approximately every three days).
This is only the third week in which the protocol has been operating. It is difficult to draw important conclusions from limited growth or limited wear until now.
But the number seems to be growing as services arrive to facilitate the participation of XTZ owners. It takes 10,000 XTZ to serve as bakers (what the creators call a “roll”), plus a little technical knowledge and a good Internet connection.
At current prices, that’s roughly $ 15,000 in cryptocurrency, but if the owner has a long position in rods, baking offers them a way to earn additional income while sitting or saving their tokens.
The number of rolls wagered for baking has also increased steadily, helped in part by the growth in delegation services. For holders who do not have $ 15,000 in cryptocurrency to engage in baking, the protocol also allows users to delegate their tokens to a service to earn rewards. TzScan lists 36 companies that offer baking services so far.
It also shows three bakers who have already stopped providing delegation services: TZ Baker, Tezos MX and, more recently, XTEZ.
Fear of a centralized protocol
In such a way, two bakers on the platform represent approximately 20 percent of the entire redesigned XTZ.
On the other hand, the foundation’s nodes have already decreased to less than 50 percent of the total network. In the current cycle, the other 107 bakers make up 32.8 percent of the xtz staked for validation.
However, due to the way in which the delegation works in Tezos, there is a delay since a user decides to delegate the tokens and when they actually start working. Tzscan allows to see several cycles ahead, and five cycles along the way, in cycle 17 (about 15 days away) those large delegation services are losing market share.
“First, they have shown a strong inclination to bake themselves: 46 percent (202/435) of all potential bakers in cycle 17 have only rolls of one to two,” Reinhart of Obsidian told CoinDesk.
Obsidian Systems creates secure software for safe baking, with the support of the Tezos Foundation. It is currently command-line software, but a graphical user interface is in process.
He is not the only member of the community that does it. Stephen Andrews has also created BakeChain, free software for Windows computers available on Github.
However, there are those who suspect that current architecture will tend towards centralization. Meltem Demirors of CoinShares, has criticized the concentration of xtz among the greatest and most important connoisseurs.
“There is a series of new services that are emerging, but we see that the trend towards consolidation is worrisome,” said Demirors, who is a partner in a delegation service called Tezzigator, to CoinDesk.
Delegation is not easy
“What we are seeing is that people begin to understand the real implications of being an aggregator of proxy votes: it is expensive and only works at scale,” Demirors argued.
The delegates who have retired have not given much visibility to their reasoning, but a company that provides the service offered their perspective on the challenges of the business.
Awa Sun Yin, from Cryptium Labs, based in Switzerland, has 47 rolls in her baking node, at the time of writing this. Yin identified three categories of challenges facing a new delegation service, not all of which could be obvious from the start. She divided them into legal, infrastructure and development categories.
Not all new delegates can immediately realize that it is better to establish a legal entity. Once they have done so, that could persuade some to retire.
Here, in the first days of Tezos, he also pointed out that there are many software updates for the protocol that delegation services must follow. If we add this to the fact that there are not enough open source tools to automate all the processes that a delegator could still automate.
“The biggest difficulty in maintaining the baking infrastructure is related to software updates,” he wrote. “These versions are difficult to foresee and, sometimes, the versions are critical, since they could have solved a security vulnerability”.
In other words, it’s just not as easy as setting up a code on a computer and letting it run.
With that been said, she added:
“As the technology was launched recently, there is a lot of room for development and contributions from the community. With the time and the right participation, it will improve a lot. “
In summary the blockchain-bitcoin technology as genesis is being improved, it is possible that the human ingenuity can add value, to improve the system, we will see how far it comes with this new project under construction. It waits for new ads.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.