Tezos (TEZ) is the self-amending crypto-ledger.
ICO start date: 2017-07-14
Tezos is a secure, future-proof smart contract system. Because Tezos has a built-in consensus mechanism, its protocol can evolve, and incorporate new innovations over time, without the risk of hard forks splitting the market. Tezos is its own blockchain, not a derivative of any other blockchain. We didn’t just fork Bitcoin or Ethereum and add a layer onto it. We built our own from the ground up. Their smart contract language makes it easier to apply formal verification to any[smart contract running on the Tezos blockchain. This allows developers to rule out weaknesses in code before uploading that code on the blockchain. Tezos relies on a less onerous, less computationally intensive, and less power-consuming proof-of-stake consensus algorithm, where bonded stakeholders validate transactions.
Shortly after the finish of the Tezos ICO, developers' team faced several valuable issues, which affected the entire project's reputation and led to the strengthening opinion, that Tezos need various improvements and changes to fit the promised goals.
The first talks about the conflict between the founders of Tezos - Arthur and Kathleen Breitman - and the head of Tezos Foundation - Johann Gevers - appeared after a few months after ICO finished - as Reuters reports, a squabble between Tezos’ twin founders and head of the custodial Tezos Foundation has put the cat among the pigeons.
By that moment, investors of Tezos (who are donors actually, according to Tezos' documents) already have been waiting to trade their tokens for several months. The dispute between founders and Gevers led to the community mayhems, so the estimated exchange rate reduced significantly after the unveiling of Breitmans' petition. The published letter contained uncomplimentary characteristics of Gevers, including words like "self-dealing, self-promotion and conflicts of interest".
As of the initial documents, it was planned to launch the testnet of the Tezos in a couple of months after the successful ICO finish. However, management problems and conflicts between DLS (Dynamic Ledger Solutions, Tezos-founding company) and Tezos Foundation (company, holding all funds, collected during ICO). The launch of the testnet was delayed several times under colour of internal organizational changes.
Such behaviour wasn't welcomed by the community and investors, and on October 25, 2017, the first class-action lawsuit was registered in the Superior Court of California as "violation of the registration and anti-fraud provisions of the federal securities laws, as well as state false advertising, and unfair competition laws."
The suit was not the only one in the works. Other firms were also studying and preparing for lawsuits, including Florida-based firm Silver Miller. Investors who felt they have been bilked out of funds started issuing class actions against Dynamic Ledger Solutions.
On June 10, Tezos Foundation unexpectedly announced the implementation of Know Your Customer/Anti-Money Laundering (KYC/AML) checks for contributors, essentially asking the participants of the ICO — which happened almost a year ago — to authorize themselves. The move was met with negative reaction from the community, while it could be argued that Tezos is preparing to work with the regulators. However, the community called this action "changing deal conditions after its consummation".
The second community's fine point here is Tezos' security policy. The issue is that to get an access to one's funded XTZ tokens, investor have to use several pieces of data-puzzle - it's required to use 15-word-seed-phrase, contribution email, fundraiser's password (which was used during ICO), fundraiser address (public key hash) and activation code, which can be obtained after passing KYC procedure. There is a bunch of stories about how people have lost their passwords or didn't receive contribution email with PDF file, where public key was specified. The problem is that Tezos devs stamped this data "unrecoverable", what means that thousands of investors are now cut off of their tokens. These people started forming communities to interact with Tezos Foundation and Dynamic Ledger Solutions as a strong unity, but not as individuals.
The only option to try to recover Tezos wallet's password here is brute-force attack, using community-driven tools, like tz-Brute or some other equal.
On the such disputable background, community met news about financial positions of the TF and DLS not very warm - according to open information about blockchain and financial accounts of Tezos founders, they received all necessary compensations and benefits instantly, instead of obtaining them by percents for some period of time, as was designed in documents and agreements initially. These news increased discontent of the community numerously, causing hot discussions on the Tezos’ Reddit page.