Key Insights & Takeaways
The second quarter of 2023 highlights a positive upward trend, as evidenced by increased staked value, growing delegator numbers, controlled inflation, and the expanding role of NFTs within the ecosystem:
-
The staked value of XTZ has shown remarkable growth, indicating an increasing interest in Tezos staking. During Q2 2023, the overall stake reached 647,582,545.92 XTZ.
-
The number of unique delegators significantly rose over this period, reaching 183,958. This surge suggests a growing awareness of the potential benefits and rewards associated with staking XTZ and an increasing interest in participating in the Tezos ecosystem.
-
The inflation rate of Tezos has achieved the expected level, remaining within the range of 4.48% to 4.75%. This highlights the network`s well-balanced monetary policy and the token supply`s careful management.
-
NFTs have played a significant role in attracting attention and engagement from the community, showcasing the versatility and potential of Tezos beyond traditional staking activities. Integrating NFTs further diversifies the Tezos ecosystem and offers creators, collectors, and other users unique opportunities.
-
Having been a baker on the Tezos network since 2018, Everstake is the largest public baker in terms of both stake and delegators within the Tezos ecosystem. We actively participate in governance and consistently contribute to the decision-making processes.
If you wish to stake XTZ, you can do so with us using your preferred wallet. To delegate Tezos to Everstake, calculate your potential profit via the Tezos staking calculator, or simply learn more about staking, feel free to explore our website and detailed staking guide.
This is the first report in the series, and we intend to publish regular updates on the Tezos staking ecosystem. If referencing or using materials from this report, kindly attribute Everstake and provide a link to the original piece.
Introduction: Understanding Tezos and Tezos Staking
This report delves into the factors influencing the increasing total stake in the Tezos ecosystem during Q2 2023, shedding light on the significant developments of the given quarter.
What is Tezos?
Tezos is an open-source platform that simplifies the creation and execution of smart contracts and decentralized applications.
The design of Tezos enables it to function as a self-amending blockchain, which means it can evolve and upgrade without hard forks or contentious protocol changes. This unique feature allows for a more adaptable development process, fostering a seamless platform evolution over time.
The native cryptocurrency of the Tezos blockchain is Tez (XTZ). It serves as the primary token used for various activities within the Tezos ecosystem, including staking, transaction fees, and participating in on-chain governance.
XTZ holders can participate in the staking process by "baking" or delegating their tokens to validators. By doing so, they contribute to the security and consensus of the network and earn staking rewards as an incentive for their participation.
"Baking" means participating as a validator to propose and validate blocks. "Delegating" allows users to entrust their XTZ to validators for staking rewards without running a node themselves.
The Everstake Approach: Methodology of Our Tezos Staking Report
The key steps involved in this conducting on-chain data analysis of the Tezos blockchain and the Tez token are as follows:
-
Collecting On-Chain Data: The initial step involves gathering on-chain data for Tezos and the XTZ token. We achieve this by extracting information from blockchain raw transaction data and utilizing data obtained from APIs, such as the Tezos API or third-party APIs. The collected data encompass various aspects, including staking, transactions, inflation, staked ratio, and other relevant metrics.
-
Cleaning and Preparing the Data: Once the data is collected, it is essential to clean and prepare it for analysis. For this, we use data analysis tools like Python and PowerBI to filter the data, merge data from multiple sources, and format it for further research.
-
Data Analysis: After preparing the data, we undergo a thorough analysis to identify trends and patterns related to staking, transactions, and other pertinent metrics. This stage also involves visualizing the data using graphs and charts, calculating statistical measures, and testing hypotheses.
-
Interpreting Analysis Results: This process includes discussions about the implications of the analysis and comparisons to other data sources or benchmarks to provide insights and conclusions about the current state of the Tezos blockchain and the XTZ token.
By following this methodology, we at Everstake aim to offer valuable and informative reports that shed light on the dynamics of the Tezos ecosystem, benefitting both the community and stakeholders alike.
XTZ Stake Distribution Between Top Validators
The top 20 largest bakers in Tezos have attracted a vast amount of delegators, primarily due to their substantial stake and reputable standing.
By the end of June, the total number of bakers in Tezos reached 412. Among them, Coinbase holds the largest share, exceeding 14% of the total stake in Tezos. Everstake secures the second position with a total share of 6.53%. Additionally, PosDog holds 5%, stakefish accounts for 4.8%, and Kraken possesses 3.2% of the total stake in Tezos.
The rest of the top 10 significant bakers possess more than 2% of the total stake in Tezos each.
Notably, in the second quarter of 2023, the total number of delegators reached 185.9k. Among them, the 20 prominent public bakers accounted for 86.5k, which equates to 46.5% of the total delegators. It is essential to mention that the count includes Tezos Foundation bakers, which have an average of 2 delegators each and are currently closed for new ones.
Everstake represents the highest number of delegators, 61,453, followed by stakefish, with 11,051. This indicates that a significant portion of retail delegations is predominantly directed toward these two bakers.
Voting Activity Among Public Bakers
Tezos bakers actively participate in governance, taking part in proposals and exercising voting power. The more stake a baker holds, the greater its influence in decision-making.
When XTZ tokens are delegated to a baker, that baker represents the delegators` votes during ongoing upgrade proposals. However, only seven of the top 10 public bakers consistently vote for these proposals and their phases, as indicated in the chart below.
Indeed, this highlights the significance of choosing a dependable and actively engaged baker who plays a role in the governance decisions within the Tezos crypto ecosystem.
Delegators Distribution: Everstake as a Top Tezos Validator
During the second quarter of 2023, Everstake stood out as the leading validator, representing 61,000 delegators. Stakefish and PosDog had over 5,000 delegators, while Melange and Chorus had about 3,000 delegators.
Analyzing the top 20 bakers reveals an interesting trend within the Tezos ecosystem. Out of all the delegators wondering where to stake Tezos, 83.8% have chosen to delegate their holdings to Everstake and stakefish. These two bakers have emerged as dominant players in the network, attracting a significant portion of the delegator base.
Tezos NFT Sales and NFT Traders
Tezos is an excellent platform for NFTs and NFT creators thanks to its energy efficiency, secure smart contracts, adaptable protocol, community governance, low fees, and swift transaction processing. These features provide a solid foundation for a vibrant and innovative NFT ecosystem.
According to CryptoSlam, Tezos witnessed a significant surge in NFT sales (marked white) in April and a steady growth trend in the number of NFT traders in June (sellers - marked blue, buyers - marked brown).
The amount of NFT sales experienced notable growth at the beginning of April, which can be attributed to the Tezos ecosystem NFT Creator Competition, where users were allowed to showcase their talent by minting their NFTs on Tezos, contributing to the growing collection of NFTs on the Tezos platform.
April NFT momentum in Tezos was also fueled by Tezos NFT Summit 2023, a dynamic convergence of creatives, innovators, and enthusiasts, blending artistic inspiration, community networking, and developer innovation, which reflects the increasing popularity of Tezos as a platform for digital art and collectibles.
The total Q2 2023 sales volume amounts to $3,849,040, with the highest volume in April of $2,638,595. The second quarter`s highest monthly number of transactions was seen in June at 57,477, compared to 28,794 and 36,754 in April and May, respectively.
Total Accounts
In Q2, the Tezos ecosystem witnessed remarkable developments, and the total number of accounts reached an impressive milestone of 4.602 million users, showing a substantial increase from the previous count of 4.378 million users.
This surge in user adoption could be attributed to the growing popularity of the McLarenF1 Digital Collectible NFTs. These non-fungible tokens, associated with the prestigious McLaren F1 racing team, have captured significant attention and interest from the Tezos community.
Total Stake XTZ Growth Dynamic
In May, the Tezos blockchain experienced a significant 5.1% growth in total stake, which amounted to an impressive increase of 32,771,045 XTZ. This surge showed a notable acceleration compared to the 0.4% stake growth in April.
The positive momentum continued into June, with an additional 1% increase in total stake. These figures indicate a rising interest and active participation in staking activities within the network, highlighting the platform`s appeal to individuals seeking to earn Tezos staking rewards while contributing to the blockchain`s security and decentralization.
Tezos is increasingly becoming an attractive option for those looking to engage in the staking process.
Rewards Distribution Between Top Tezos Validators
Certainly, Tezos bakers provide rewards to their delegators, and the total rewards paid out in May were higher than in April and June.
For example, Everstake paid its delegators 239,118.18 XTZ in April, which was approximately 11,000 XTZ more than the rewards distributed in June, totaling 228,056.79 XTZ.
Average Tezos Stake to Commission Rate by Validator
In the Tezos blockchain, different service providers offer varying average bakers` fees. These diverse fee structures and delegation minimums give users a range of options to choose a baker that aligns with their preferences and staking capabilities within the Tezos ecosystem.
For instance, Coinbase stands out with the highest fee of 25%, while others charge around 15%, and a few have fees hovering at 10%.
It`s important to note that bakers can impose a minimum delegation requirement, ranging from 1 XTZ to 1,000 XTZ. Everstake, however, distinguishes itself by offering a remarkably low entry barrier, requiring a minimum delegation of only 0.0001 XTZ.
Price, Inflation, and APR
During the second quarter of 2023, the inflation rate ranged between 4.48% and 4.75%.
Throughout this period, the price of XTZ experienced fluctuations. The highest recorded price for 1 XTZ token was $1.18 on April 16th. On the other hand, the lowest price observed during the quarter was $0.71 in June.
Furthermore, it`s worth mentioning that in June, the APR reached its peak for the quarter, reaching 6.47%. Interestingly, during the same period, the price of XTZ was relatively lower, at $0.8 per token.
Total Stake vs. Tezos Price
During May of this year, the total number of staked tokens surpassed 700 446 257 XTZ. Notably, the price of 1 XTZ during this period stood at $0.89. This indicates that Tezos delegators continued to show their faith in Tezos and its ongoing development.
As June drew to a close, the number of staked tokens experienced a decline, reaching a total of approximately 680,064,446 XTZ.
Stake Redelegate Flow Between Delegators
In the second quarter of 2023, the total sum of XTZ tokens redelegated through top public bakers reached approximately 18.45 million. This token movement reflects the active participation and engagement of the Tezos community in optimizing their staking strategies.
A total of 1,384 users participated in the redelegation process, highlighting the widespread interest in exploring different baker options.
Many redelegated tokens, accounting for 75.35%, moved towards bakers offering lower fees. Notably, delegators directed their stakes toward prominent bakers such as PosDog, stakefish, Everstake, and Chorus One. This strategic redelegation allows delegators to maximize their rewards by selecting bakers with more favorable fee structures.
