April 24, 2022 10:00 AM
Top Tezos block producers
Baking blocks is one of the core activities for stakeholders to do in blockchain systems. In this weekly we take a look at a couple of historic charts on Tezos baking. But before getting into the charts, a very short recap of baking on Tezos:
For the Tezos blockchain this happens through the energy-efficient liquid proof-of-stake mechanism. People can run a node and “stake” the xtz token to “bake” blocks, which are then added to the chain. These people or organisations controlling nodes to do the baking, have to set up a public baking address that holds the xtz, or to which xtz can be delegated. Based on the amount of xtz staked the node will be assigned a certain number of blocks to validate, “produce” and “bake” into the blockchain. In the metadata of each block the “producer” address can be found back.
Staking enables block production, which brings rewards. The people or parties controlling the staking wallets are also able to vote on proposal upgrades through the on-chain governance process of Tezos.
In the first two charts we’ll take a look at some absolute numbers. Tezos initially had a block production rate of 1/min per block, which was sped up in 2021 to 30/sec per block. This results in about ~40k blocks to be produced by bakers per month initially and this doubled to around ~80k blocks per month now.
For the charts below, the tzkt API was relied upon to get the organization names involved for block producer addresses.
Blocks produced per month by top Tezos bakers
This first chart shows the number of blocks baked by the top bakers per month.
The 'x' marks in the chart show the total number of blocks baked per month. The lines display the number of blocks produced by each baker per month. As can be seen in this first chart, the Tezos foundation operates a bunch of bakers in parallel. This set of baker nodes initially got the mainnet network started.
Blocks produced per month with foundation nodes grouped
In the below chart, the baking activity of these foundation nodes is grouped together. This gives a better sense of the size difference between different stakeholders involved in the baking process over time
Next to the foundation, the other largest bakers (by blocks baked count) are parties such as Coinbase and Binance. These are places for people to easily buy into blockchain ecosystems without the added burden of maintaining your own wallet. This does mean however that the tokens purchased on such platforms will remain in the wallet(s) maintained by those platforms.
Distribution of block production between top Tezos bakers
In the final chart we take a look at the distribution of blocks produced by different bakers.
Three distinct phases become visible in the history of baking. In roughly the first year there was an adoption phase of bakers joining the network. These first adopters took over a large part of the baking activity initially done by the foundation bakers. Then from 2020 onward, wallets maintained by exchanges to hold tokens started to grow their share of the block production supply. Mid-2021 a shift in the distribution happened with the foundation bakers transferring part of their xtz holdings to another holding solution (ref).
In the most recent months the exchanges have grown their share of xtz staked slightly, while at the same time, new bakers have appeared. In these charts we have taken a look at bakers by measuring their output (i.e. numbers of blocks produced per baker).
In future work we’ll dig deeper into the baking network, so if you have any questions that you'd like to see investigated, do to reach out to @thestackreport.
That’s it for this weekly article, thanks for reading!
As always, feel free to download the charts as still image or video for your own use or sharing pleasure. A tag of @thestackreport would be much appreciated.