Tezos Is About To Pull Off Its Biggest Upgrade Yet

Tezos, a proof-of-stake blockchain protocol, is on the cusp of its ninth upgrade, Ithaca 2, introducing a new consensus mechanism, Tenderbake. The new consensus mechanism will increase the speed of finalizing transactions and reduce latency across its network, bringing along a new wave of innovations on the blockchains. Finally, the Tezos team also announced its plans to upgrade proposals to integrate optimistic and zk-rollups later in the year.   

The Tezos blockchain ninth upgrade is set to go live later this week, introducing the Tenderbake consensus mechanism to replace the current consensus mechanism, Emmy. The Ithaca 2 upgrade follows a three-month injection process as voted on by the Tezos community. According to Tezos Foundation, the new Tenderbake consensus mechanism will improve latency and finality of transactions, which means faster transactions and DApps running more efficiently on Tezos. 

The latest upgrade brings along a faster platform by increasing the finality of transactions, or how quickly a transaction is included and made irreversible by the network. This entices more developers to move their platforms to Tezos, one of the most successful applications of proof-of-stake. Adding to this, the new upgrades offer high throughput and scalability, and expanded smart contract functionality for apps. 

Nonetheless, increased adoption by DApps, projects, enterprises, and institutions into the Tezos ecosystem will need the blockchain to become more scalable. However, there are systemic limits to how much the blockchain can improve scalability without impacting the security, decentralization, latency, stability, censorship resistance, or any mix of these. 

Run by a community and maintained by builders, creators, and bakers (validators), Tezos really cannot afford to sacrifice any of the features above in order to boost scalability. To avoid sacrificing any of the key features, Tezos is looking at introducing Layer 2 scalability solutions to ensure high throughput and prepare it for widespread adoption. The latest upgrade integrates optimistic rollups, a layer 2 scalability solution.  

Optimistic rollups run parallel with the main blockchain. They batch large amounts of transaction data and move the data off the main blockchain to rollup-specific nodes. The transactions are then processed off the chain and returned to the main blockchain for finality, ensuring the security of the main blockchain chain acts as a backstop in case of foul play.

The Tenderbake consensus mechanism in Ithaca 2 is based on the Cosmos protocol consensus mechanism, Tendermint. The optimistic rollups on Tezos are modeled on Arbitrum, a popular roll-up system on Ethereum, with plans to introduce zk-rollups later in the year.

Looking into the zk-rollups future

Currently, sending assets on optimistic rollups and withdrawing the assets back to the main chain requires the users to wait for a ‘dispute’ period, which on Arbitrum is 7 days. This has pushed the Tezos community to look into zk-rollups, or zero-knowledge rollups. The zk-rollups involve moving transactions off-chain and posting commitments to the main chain, the same as with optimistic rollups, but zk-rollups attach a cryptographic proof of correctness with the commitment. This means no need for a waiting period for withdrawals. This is possible because zk-proofs are very small and can be checked by main chain nodes in a fraction of a second, regardless of the number of transactions or smart contract operations involved.

As the Tezos ecosystem innovates and evolves, the community expects to welcome more funding to further its roadmap goals. The ecosystem is supported by venture capital firms, strategic collaborators, and the Tezos Foundation, who in their recently released biannual report announced over $1.2 billion in assets under management with over $230 million in grants and investments deployed in the past half-year.