3 Big Differences Between Tezos and Ethereum

3 Big Differences Between Tezos and Ethereum

Last Updated: 30th October 2018

Tezos and Ethereum are both blockchain protocols that provide a platform for the creation of smart contracts and decentralized applications. Both were created with the intention of providing developers with the tools necessary to create blockchain based applications.

Much like how ether (ETH) is the digital native asset as well as fee payment mechanism for the execution of smart contracts on the Ethereum platform, Tezos utilizes what are known as, tezzies (XTZ), to carry out the same function.

However, despite their similarities, Tezos and Ethereum possess distinct differences that make for two radically different smart contract platforms. This article will highlight the 3 major dissimilarities that exist between Tezos and Ethereum.

1. Governance 

One way in which Tezos and Ethereum differ is in the manner they choose to approach the issue of governance. Governance, with respect to cryptocurrency and blockchain, refers to the way in which changes are made to a protocol. For example, with regards to Ethereum, upgrades and changes are largely dictated by the Ethereum foundation/developers. The Ethereum roadmap has been outlined so stake holders understand the direction in which the protocol is going. However, stakeholders are severely limited in the actions that they can take in influencing the Ethereum network.

This contrasts with Tezos’ governance system which utilizes a method known as, on-chain governance. What this means is, developers can submit proposal upgrades to the Tezos network, with token holders then having the ability to vote on if such a proposal should be implemented or not. This system gives token holders much more influence in deciding the direction in which a protocol should take. In addition, an incentive system exists wherein developers are rewarded for implementing approved upgrades to the network.

2. Consensus Mechanism 

A consensus mechanism is a system used by a blockchain network to come to an agreement on the state of the network. For example, proof-of-work is the consensus mechanism currently employed by the Ethereum protocol, however, it is transitioning to a proof-of-stake model. Proof-of-work requires a participating miner to prove that they have expended the necessary resources in computing a hash lower than a certain target. Proof-of-work is an energy intensive process, and as such, is the reason why the Ethereum protocol is shifting to proof-of-stake.

Conversely, the Tezos protocol employs a delegated proof-of-stake (DPoS) consensus mechanism wherein token holders can delegate others to come an agreement on the state of the network for them. DPoS as a mechanism proves to be less energy intensive than proof-of-stake, however, it is arguably less secure.

3. Michelson Vs. Solidity 

The programming language used to construct smart contracts on the Tezos and Ethereum platform also differ. Ethereum utilizes the high-level programming language, Solidity, whereas Tezos utilizes Michelson. Much like how Solidity was invented by the Ethereum development team for programming smart contracts, Michelson itself is also an invention by the Tezos development team.

However, Michelson is a programming language that allows for a process known as, formal verification. Formal verification is the process of mathematically proving the correctness of an algorithm with respect to a specification. Therefore, with regards to smart contracts built on Tezos’ platform using Michelson, they can be proved to be mathematically correct according to certain properties. Even though formal verification does not guarantee the integrity of code, it provides an additional tool to help developers program better quality smart contracts, thus, making them more secure.

On the other hand, formal verification for smart contracts created using Solidity is currently in development, and so, the correctness of smart contracts built on Ethereum cannot be guaranteed.


To conclude, there exists three main differences between the Tezos and Ethereum protocols. Those differences reside in: governance, consensus mechanism and smart contract programming language.

Where Tezos focuses on on-chain governance, allowing token holders to dictate the direction of its protocol, Ethereum focuses more on off-chain governance where the Ethereum development team/foundation dictate the future of its protocol.

Tezos utilizes a delegated proof of stake consensus mechanism, which is in contrast to the proof-of-work method currently employed by Ethereum, although, it is transitioning to the proof-of-stake system.

Lastly, Tezos uses smart contract programming language, Michelson, a language which the development team invented itself. Michelson permits for a process known as formal verification, which allows for a greater level of security in the creation of smart contracts. Conversely, Ethereum uses Solidity as its programming language of choice when it comes to the creation of smart contracts; Solidity was also invented by the Ethereum development team.