KEY TAKEAWAYS
- Tezos activated the Quebec protocol upgrade, enhancing performance, staking, and economic design.
- The upgrade reduces block time to 8 seconds, improving transaction finality significantly.
- Staking system changes allow bakers to accept more external stakes, increasing rewards and decentralization.
- Adaptive Issuance refinements balance staking incentives with network security, minimizing inflation.
On January 20, 2025, the Tezos blockchain successfully activated the Quebec protocol upgrade at block #7,692,289. This marks the 17th major milestone in Tezos’ evolution, introducing significant enhancements to its performance, staking system, and economic design. The upgrade was developed collaboratively by Nomadic Labs, TriliTech, and Functori.
The Quebec upgrade reduces the block time for layer 1 transactions from 10 to 8 seconds. This improvement allows transactions to be included by the network more quickly, reducing transaction finality to just 16 seconds. This is notably faster than Ethereum’s layer 1, which takes approximately 15 minutes, and is close to Solana’s 13-second finality.
Enhancements in Staking and Network Economics
The upgrade also brings changes to Tezos’ staking system. Bakers can now accept up to nine times their own stake from external stakers, up from the previous limit of five times. This adjustment accommodates the growing demand for staking capacity while mitigating the risk of stake concentration among a few large bakers. Additionally, staking now offers three times the rewards compared to delegation, making it a more attractive option.
In terms of network economics, the Quebec protocol refines the ‘Adaptive Issuance’ mechanism. This mechanism automatically balances staking rewards with the network’s security needs, aiming to minimize tez inflation. The change adjusts the upper limit for tez issuance when staking is close to the target of 50%, ensuring that staking incentives remain proportional to security benefits.
Commitment to Decentralization and Future Developments
The 8-second block time was implemented following rigorous testing to ensure network stability and inclusivity. Importantly, this change does not affect the hardware requirements for bakers, allowing community members to continue participating in consensus with affordable infrastructure, such as a Raspberry Pi.
Raising the external stake limit reflects a commitment to supporting a decentralized baker ecosystem as the network grows. The Adaptive Issuance refinements ensure that staking incentives are balanced with long-term economic health, benefiting liquidity and making tez more attractive for use in DeFi and layer 2 solutions.
The activation of Quebec demonstrates the strength of Tezos’ governance process, where upgrades are debated, refined, and approved through a decentralized, on-chain mechanism. The community has already begun discussions about the next upgrade, ‘R’, which builds on recent protocol advancements and aims to further enhance Tezos’ performance.
For more details, the full announcement can be found here.
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