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Understanding the Tezos Upgrade Proposals: Oslo vs. Oxford
Tezos has witnessed spirited discussions regarding two prominent upgrade proposals: Oslo and Oxford. Both proposals introduce ‘Adaptive Issuance’ (AI) – a fresh take on staking concepts.
By: XTZ News
18 August 2023
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Tezos has witnessed spirited discussions in the past week regarding two prominent upgrade proposals: Oslo and Oxford. Both proposals introduce ‘Adaptive Issuance’ (AI) – a fresh take on staking concepts. As Tezos continues its progressive journey, understanding these proposals’ nuances is important for bakers, delegators, and the new role, stakers. In this article, we’ll dive into these proposals’ specifics, comparing their features and potential impacts.
Understanding Adaptive Issuance:
Previously in Tezos:
Delegate/Baker: An entity that locks up their tez in consensus and signs the work from their baking processes. This is the address where you’d delegate your tez.
Delegator: Individuals delegating to the baker without locking up their tez.
The new Adaptive Issuance introduces:
Staker: Individuals who delegate to a baker with their tez balance locked and “at stake”. This means they, along with the baker, are liable for any misbehaving by the baker.
When the new feature, Adaptive Issuance, starts, it’s anticipated that about 7% of all tez will be “staked”. This 7% is from locked funds (bonds) from existing bakers. To ensure that bakers act honestly and responsibly in this role, they’re required to place a bond or “deposit” as a form of collateral and this will account for the starting 7% in this case. Beyond this, another 15% is likely to be staked quickly, primarily due to the Tezos Foundation’s involvement, which will be split among 8 main bakers. This means there will probably be an initial ~20% of all tez staked, with an aim to reach ~50%. The growth is first driven by a fixed rate, and then by a varying rate.
The beginning emissions for Oslo are set at 3%, while for Oxford, it’s 1.5%. This is the baseline from which the rate will first increase before decreasing once it approaches approximately 48%. The “optimal range” as defined by Adaptive Issuance is the interval between 48% and 52%. Within this range, the dynamic rate is held constant, whether it’s ascending from 48% or descending from 52%.
Adaptive Issuance aims to maintain roughly 50% of the stake as either a baker, a staker, or a delegator. The weight of baker and staker tez is higher than that of delegator tez. To maintain this balance, a combination of dynamic and static staking rates adjusts the stake percentage. This new mechanism is designed to encourage more stake when it’s under 48% and decrease stake when above 52%.
Oslo vs. Oxford: The Key Differences
Both proposals share foundational similarities, with Oslo echoing much of Oxford. However, Oslo introduces three significant changes to the Adaptive Issuance:
Minimum APY: Oslo doubles the static curve to offer a 1% minimum Annual Percentage Yield (APY) compared to Oxford’s 0.5%.
Maximum Issuance: Oslo increases the maximum issuance to 7.5% from Oxford’s 5%.
Dynamic Ratio: Oslo’s maximum dynamic ratio is 7%, a rise from Oxford’s 5%.
Why might one vote for Oslo? Oslo offers a compelling case. It aims to make Tezos staking more market competitive. The higher initial rewards after activation of Oslo are designed to attract new participants. This approach not only boosts participation but also helps to rapidly secure the Tezos consensus. Moreover, Oslo is projected to reach the ideal 48%-52% staking ratio faster than Oxford, compensating for its initial higher emissions by achieving this staking balance sooner.
And why might one lean towards Oxford? On the other hand, Oxford, with its lower initial issuance, theoretically offers a more conservative approach. While it starts with a 0.5% minimum APY, it has a potential to encourage a more gradual growth and participation in the Tezos network. It might appeal to those in the community who prefer a steadier and potentially more stable path to achieving the ideal staking ratio.
Impacts on Delegators Post ‘Adaptive Issuance’:
With the activation of either proposal, all current delegators will get to make a choice should bakers open up ‘stakers’: to re-delegate as a staker, locking up their tez, or remain a delegator, keeping their funds liquid. The decision may be influenced by the initial reward rates offered by both proposals, with Oslo starting at 3% and Oxford at 1.5%.
For those who are unaware, the implications of ‘adaptive issuance’ would mean varying rewards based on the dynamics of staking. Before its introduction, rewards were relatively stable. Post-implementation, however, rewards would be influenced by the number of tez staked. So, if you were a delegator before, you might witness different reward rates after the ‘adaptive issuance’ comes into play.
Delegators (and all other participants) might also want to think about the impacts from an economical standpoint with the potential for more tez to get locked up in staking via ‘stakers’, countering that with the potential for perceived reward losses at different points in time.
Conclusion:
The Tezos community stands at a crossroads, with two promising upgrade proposals to consider. Both Oslo and Oxford aim to refine the Tezos staking system, with different approaches to achieving the optimal results. Whether you’re a baker, delegator, or considering the new role of a staker, understanding these proposals is paramount. Your choice will help shape the future trajectory of the Tezos ecosystem.
Lower latency and faster finality with 10s block times without compromising decentralization or security.
The activation of the Data Availability Layer (the DAL) on Mainnet, boosting throughput and scalability of Smart Rollups with the capacity to support millions of transactions.
Tezos, a leading blockchain platform renowned for its self-amending capabilities and community-driven governance, has successfully activated Oxford 2, its fifteenth core protocol upgrade. The Oxford 2 upgrade includes enhancements to Smart Rollups and chain security and ensures Tezos remains at the forefront of blockchain innovation.
Tezos has witnessed spirited discussions regarding two prominent upgrade proposals: Oslo and Oxford. Both proposals introduce ‘Adaptive Issuance’ (AI) – a fresh take on staking concepts.
Nature of Content: All content published on https://xtz.news, whether written, auditory, or visual, is for informational purposes only. Opinions expressed therein are solely those of the individual authors and do not reflect the views of XTZNews or its management.
Not Financial Advice: No content on this website constitutes investment, financial, legal, or tax advice. Users should not construe any such information as a recommendation to buy, sell, or hold any investment or security or to pursue any particular investment strategy.
Accuracy and Completeness: While XTZNews makes every effort to ensure the accuracy and reliability of information, we do not warrant or guarantee the timeliness, completeness, or accuracy of the information presented. The website may contain errors, omissions, or inaccuracies. We disclaim all warranties, both express and implied, regarding the information, including but not limited to, any warranty of merchantability or fitness for a particular purpose.
Endorsements: References to specific entities, products, services, processes, or other information does not constitute or imply endorsement, sponsorship, or recommendation by XTZNews. Blockchain technology is in a developmental phase, and the engagement with the technology and its associated entities carries inherent risks.
User’s Responsibility: Users are encouraged to conduct their own research and due diligence and to seek the advice of qualified professionals before making any investment or decisions related to content on this site. Engaging with blockchain technology, cryptocurrencies, and associated applications should be undertaken with caution, understanding the inherent risks involved.
Limitation of Liability: Under no circumstances will XTZNews or its affiliates, partners, officers, directors, employees, shareholders, agents, or licensors be liable for any direct, indirect, incidental, special, consequential, or punitive damages, including without limitation, loss of profits, data, use, goodwill, or other intangible losses, resulting from (i) your access to or use of or inability to access or use the site; (ii) any content obtained from the site; or (iii) unauthorized access, use, or alteration of your transmissions or content, whether based on warranty, contract, tort (including negligence), or any other legal theory, whether or not we have been informed of the possibility of such damage, and even if a remedy set forth herein is found to have failed its essential purpose.
Seek Independent Advice: Before undertaking any financial investments, potential investors are advised to seek guidance from independent financial, legal, and tax professionals.
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Lower latency and faster finality with 10s block times without compromising decentralization or security.
The activation of the Data Availability Layer (the DAL) on Mainnet, boosting throughput and scalability of Smart Rollups with the capacity to support millions of transactions.
Tezos, a leading blockchain platform renowned for its self-amending capabilities and community-driven governance, has successfully activated Oxford 2, its fifteenth core protocol upgrade. The Oxford 2 upgrade includes enhancements to Smart Rollups and chain security and ensures Tezos remains at the forefront of blockchain innovation.
Following the successful activation of the Nairobi protocol on June 24, seven teams — Nomadic Labs, Marigold, TriliTech, Oxhead Alpha, Tarides, DaiLambda, and Functori — have collaboratively unveiled the latest protocol proposal for Tezos, named ‘Oxford’.
