Tezos (XTZ) Price

XTZ (also called tez, symbol ꜩ) is the native asset of the Tezos blockchain, not an ordinary token issued by a smart contract. Users pay fees for on-chain operations in XTZ; holders can also delegate or stake XTZ to a baker, affecting the network’s block production, validation, and governance weight. Tezos account balances are recorded internally by the protocol in mutez: 1 XTZ = 1,000,000 mutez. Other fungible tokens and NFTs on-chain are usually maintained by smart-contract ledgers, so they are not the same type of asset as XTZ, the protocol-native fee asset.

A baker is a Tezos block producer and validator: it creates blocks, validates blocks from other bakers, and receives corresponding rewards for correct participation. To qualify for block production and validation, a baker must have at least 6,000 XTZ of baking power. Baking power comes not only from XTZ staked by the baker itself, but also from XTZ staked to that baker by users; users can therefore include their funds in its security backing without running a node. If a baker performs poorly and misses block-production opportunities, related rewards decline, which also affects what external stakers receive.

Both delegation and staking require an account to select a baker first, but their responsibilities and fund availability differ. With delegation only, XTZ can still be transferred or spent at any time, and a baker’s misconduct does not cause the delegator to be slashed; whether, and under what conditions, a baker pays rewards to delegators is decided by that baker and distributed through transactions. Staking specifies, on top of an existing delegation, that a portion of XTZ enters that baker’s frozen stake. The coins remain in the staker’s account but cannot be transferred or spent; the protocol automatically allocates staking rewards according to the staker’s share of that baker’s total staked amount. Staked and delegated funds also carry different weights in baking and voting power: staked funds have three times the weight of delegated funds. Not every baker accepts external stakes, and bakers may set capacity limits and an edge taken from external staking rewards; before choosing one, users should verify whether it is open, its remaining capacity, commission, and historical performance.

The core risk of direct staking is that a baker’s misconduct is passed on to stakers: frozen XTZ forms part of that baker’s security backing. If a baker double-signs a block proposal or consensus operation, stakers bear slashing in proportion to their own staked amount’s contribution to that baker’s baking power; the slashing rule for double proposals is 5% of that baker’s staked amount. XTZ that is delegated only and not staked does not bear this type of slashing. Liquidity is also a practical constraint. After an unstake is initiated, the funds are not immediately spendable: they currently require a wait of 3 blockchain cycles plus the remaining time in the current cycle, up to about 4 days; finalization must then be completed before they become available balance. The wait exists because consensus rights are calculated two cycles in advance, and funds must continue to cover the slashing period for potential misconduct associated with rights that have already been calculated. An account can delegate to only one baker at a time; if it changes bakers while it still has stake, the original stake first becomes an unstake request, and can only be staked to the new baker after the wait and finalization are complete. The account should also retain unstaked XTZ to pay subsequent operation fees.

Regular new issuance of XTZ is not a fixed percentage. After the Paris upgrade, Adaptive Issuance adjusts subsequent participation rewards at the end of each cycle according to the network-wide staking rate, aiming to move the ratio of frozen stake to total supply toward 50%: incentives rise when the staking rate is below the target and fall when it is above the target. This staking rate uses total supply in a cycle as the denominator and frozen stake as the numerator; the adaptive issuance rate determined by the protocol at the end of cycle c is used for issuance in cycle c+3, so the adjustment does not take effect immediately. Participation rewards incentivize delegates to take part in consensus and random-number generation; in addition, the protocol may have Liquidity Baking subsidies and invoices defined by proposals during protocol migrations. Therefore, the staking reward rate changes with network-wide staking conditions and protocol parameters, and an estimated yield at a particular point in time should not be treated as a fixed return or fixed inflation rate.

On Tezos, operation fees and new issuance are two separate paths. When users send transfers, call contracts, or perform other operations, they pay fees in XTZ; manager-operation fees and baking fees enter the block fee pool and are allocated to the payload producer. Paying these fees does not automatically mint new XTZ. The final cost does not depend only on the transfer amount. Smart-contract execution consumes gas, which measures computational work; if an operation increases on-chain storage, it also incurs storage fees charged by byte. Ordinary transfers and complex contract calls, as well as whether storage is newly created or expanded, may therefore pay different fees. The destination of fees also depends on their category: operation fees in the block fee pool are allocated to the payload producer through the protocol process, while storage fees charged for occupying on-chain storage are burned. Therefore, not all fees paid by users can be summarized as block-producer income.

Tezos protocol upgrades are completed through on-chain self-amendment governance rather than necessarily through a fork at the time of an upgrade. Only delegates may submit the hash of economic-protocol code as a proposal during the Proposal period, and may support other proposals; only delegates may vote as well, with voting power composed of the XTZ staked by that delegate itself plus XTZ delegated to it. The process consists, in order, of five stages: proposal, exploration, cooldown, promotion, and adoption. Each stage lasts 14 cycles, or about 14 days. Both exploration and promotion votes must meet a dynamic quorum, and yes votes must exceed 80% of the combined yes and no votes; the cooldown period is for testing and adaptation, and mainnet activation occurs automatically only at the end of the adoption period. Thus, a proposal, testnet testing, passage by vote, and mainnet activation are distinct states and cannot substitute for one another.

Recent upgrades have materially changed how XTZ is used for participation and how the network operates. Paris activated in June 2024, introducing user staking, Adaptive Issuance, and adaptive slashing, as well as DAL; Quebec reduced the L1 minimum block time from 10 seconds to 8 seconds in January 2025, raised the external staking cap from 5 times a baker’s own stake to 9 times, and adjusted the upper bound of adaptive issuance. Rio shortened cycles to about 1 day in May 2025, allowing unstaked funds to be finalized after about 4 days, and specified that, after DAL activation, 10% of baker rewards depend on participation in DAL data-availability attestations; DAL activates only when at least 66% of total baking power participates, and non-participation or dishonest attestation loses this portion of rewards, but is not slashing. Tallinn reduced block time again to 6 seconds in January 2026. Ushuaia increased DAL bandwidth from about 0.66 MB/s to 10 MB/s in June 2026 and, conditional on reaching 66% attestation weight, changed DAL confirmation from a fixed wait to dynamic confirmation. Native sTEZ liquid staking and quantum-resistant tz5 keys in this upgrade remain under testnet testing behind feature flags and have not yet been enabled on mainnet; they must not be treated as current XTZ mainnet features.

DAL (the Data Availability Layer) does not put all scaling data directly into Tezos L1 blocks; instead, it has L1 attest to data that is available off-chain, providing a higher-throughput data foundation for Smart Rollups. Whether a baker participates in DAL is an operational choice distinct from ordinary L1 baking, and the required hardware and bandwidth may also differ. For XTZ, DAL is connected mainly to validator rewards and L2 infrastructure, rather than automatically making XTZ a gas asset on a particular L2. Rio specifies that, once DAL reaches its activation threshold of 66% of baking power, 10% of baker rewards depend on participation in DAL attestations; Ushuaia further increases bandwidth and shortens the confirmation wait once 66% attestation weight is met. Before using a particular rollup or cross-chain asset, users should still verify the tokens required under that rollup’s asset and fee rules.