FAQs: Why are so many firms choosing Tezos as the blockchain for their tokenized assets?

The short answer is that: 1) the protocol has many key features that make it ideal for high-value assets that need a secure, reliable, long-term oriented platform, and 2) we are working hard to build tools and provide technical expertise/support to make it simple for entities to issue tokenized assets on Tezos.

Regarding the first point, the two major advantages that Tezos offers over other smart contract platforms are smart contract security and platform longevity.

Michelson, the domain-specific language for writing smart contracts on Tezos, was designed to facilitate formal verification. To quote Mason Borda of TokenSoft on the general idea, this means that “prior to sending a billion dollars over the blockchain, you can run a formal test to simulate it. If anything has changed since deployment (libraries, protocols, etc.), you will know.”

In terms of platform longevity, upgradability and a means to fund development are key. We have spoken at length about Tezos’ governance mechanism, but one feature of Tezos that is often overlooked is inflation funding. If a software upgrade is approved via the Tezos governance mechanism, the new implementation can mint Tezos tokens and issue them to the developer (individual or team) behind the upgrade. This helps mitigate the free-rider problem that open-source projects and other public goods often face. For more on inflation funding, check out this explainer video from Tezos Commons.

For more on the advantages of Tezos when it comes to tokenized assets, check out this post from TQ’s Charlie Wiser.