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Tezos Edo Upgrade + Network Effects

Last Saturday, 13 February 2021, around 1 pm Pacific time, Tezos upgraded for the fifth time in less than 2 years. This upgrade, dubbed “Edo,” contained some minor bug fixes, some improvements to performance and gas consumption (thus lowering typical gas fees), the addition of a new period (named the “Adoption Period”) to the Tezos upgrade process, and two important new features that development teams have been working on for some time: Sapling, and tickets. I’ll touch on Sapling later on in this post. To learn more about tickets, check out this introductory post from TQ’s Eli Guenzburger.

The specific features and improvements of the Edo upgrade have been comprehensively covered in a number of different pieces. In this brief post, I will share two high-level and more philosophical reasons why I think this upgrade is especially significant for both the Tezos and larger blockchain ecosystems. This post assumes that readers have some familiarity with Tezos and blockchain technologies.

An Upgradable Upgrade Process

One of Tezos’ primary competitive advantages over other public blockchains such as Ethereum is that it has a built-in mechanism to regularly coordinate and execute software upgrades at scale. The ability to regularly coordinate and execute software upgrades at scale is important because public blockchains risk becoming outdated and abandoned if they do not innovate and incorporate state-of-the-art technologies. If a public blockchain becomes outdated and abandoned, that blockchain’s network effect will be damaged, and a network effect is what gives a blockchain and its native cryptocurrency value.

When dealing with decentralized networks with thousands of different stakeholders and node operators from all sorts of different cultural backgrounds and regions around the world, the costs required to coordinate and execute upgrades can be extremely high or even prohibitively expensive to retain the network effect of a given cryptoc...

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