A Game-Theoretic Evolution

Tezos has been rebuilding its foundations quietly for years, not with a single dramatic overhaul, but through a sequence of deliberate upgrades that are still unfolding. By the time Paris arrived, the shift became undeniable: Tezos moved from a baker-only security model to a hybrid one where bakers and native stakers lock real stake directly in the protocol and secure the chain together.

This wasn’t just “more participation”, it strengthened the economic logic of the network. On Tezos, staking is literal, misbehavior is slashed, honesty is rewarded, and alignment is enforced by mathematics. More actors now carry real skin in the game, broadening distribution, tightening incentives, and increasing resilience even as the number of bakers decreased (I’ll expand on this later).

In this article, I’m going to explain why this shift was the right move and how it emerged across several upgrades.

Delegators, Stakers, and Bakers: How They Fit Together

Bakers

Bakers are the core operators of Tezos. They run the infrastructure, produce and validate blocks, and secure the chain. In the original LDPoS model, only their bonded stake provided real economic protection, the network’s security rested entirely on them.

Delegators

Most users are delegators. They keep their tez liquid but lend their voting weight to a baker. They help shape consensus without running infrastructure, but their capital isn’t at risk.

Stakers (post-Paris)

Paris introduced something new: native stakers. Instead of building a baking setup, they simply lock their tez directly in the protocol and ‘rent’ a baker’s engine for a small fee. When they do, it stacks onto the baker’s staked balance, strengthening that baker’s weight. The twist is that their rewards never pass through the baker, payouts come straight from the protocol, trustlessly. For the first time, users could earn more than traditional delegators while directly reinforcing network security. No middlemen, no manual payouts, just a clean, on-chain relationship where staking becomes a true first class way to protect the network.

Integrating Stakers Into Consensus

Before Paris, only bakers had something at stake. They were the only people walking around with real skin in the game. Delegators participated indirectly, but their capital wasn’t exposed. And while the model worked, it concentrated responsibility in the hands of a relatively small group.

After Paris, the story changed. Now, stakers, normal users who don’t want to run a node, can bond their funds directly and share responsibility with bakers. Their commitment carries real weight: bonded stake from stakers counts 3x more than delegated tez when it comes to governance, and hence earns about 3x more rewards than simple delegation. Suddenly, the vault has more honest and committed guards, each with something valuable on the line and a stronger voice in how the network moves forward. And more people with something to lose are always good for security.

This reshaped the social structure of Tezos:

  • Before Paris → only about 7% of the total supply was actually securing the network, coming exclusively from the bonds (stake) posted by bakers.

  • After Paris-Quebec-Rio-Seoul → Security is now shared between bakers and individual stakers, broadening participation, improving distribution, and strengthening overall resilience. As of today, this combined bonded stake is ~ 27%.

The Game Theory Foundations of Hybrid Proof-of-Stake

One of the most overlooked parts of Tezos’ evolution is how the staking model reshaped the incentives behind the network. Blockchains, at their core, are not just technology, they are economic machines. They only work when the people inside them are rewarded for doing the right thing and punished for doing the wrong thing. In other words: software becomes law, and incentives become gravity.

Tezos leans heavily into that logic. It doesn’t pretend to be Proof of Stake. It is Proof of Stake, in the literal sense: stake can be taken away. And with the introduction of an adjustable slashing mechanism, the protocol can calibrate penalties to the severity of misbehavior, amplifying the precision of its game-theoretic design. That single design choice changes everything.

To understand why, imagine a small town where everyone is responsible for guarding a shared vault. In some systems, the guards carry empty guns, symbolic tools that look serious but carry no actual consequences if someone breaks the rules. In Tezos, the guards carry fully loaded, real ones. And now, depending on the severity of the breach, the response can scale accordingly. If you break the rules, the penalty is not theoretical. It’s immediate, measurable, and tunable. Your “stake,” your contribution to securing the town’s vault, can be slashed, lightly or heavily, depending on the offense.

Economists call this credible penalties, and it’s the backbone of game theory. If breaking the rules is costly, most people won’t break them. If following the rules pays well, most people will follow them. The system doesn’t rely on trust, goodwill, or reputation. It relies on alignment, and Tezos adds the nuance of calibrated discipline.

Aligning Today’s Incentives With Tomorrow’s Tezos X Architecture

But incentive alignment doesn’t stop there. Faster cycles tighten the feedback loop. When rewards arrive sooner, penalties arrive sooner as well. It’s like giving the town a daily accounting instead of a monthly one, mistakes can’t hide for long. Good behavior is reinforced, and bad behavior is corrected almost immediately.

The Data Availability Layer (DAL) adds another dimension. It compensates participants for doing work that benefits everyone: storing and serving data reliably. Honest work brings more rewards, and careless work risks losing them. But there’s an additional layer of meaning here: bakers who support the DAL aren’t just earning rewards, they’re signaling belief in the long term direction of Tezos.

The DAL is not an optional accessory; it is a foundational component of the Tezos X roadmap, where a canonical rollup becomes the central scaling path. In other words, DAL participation isn’t just technical participation. It’s commitment. And the protocol rewards that commitment. Once again, the incentives line up perfectly: help the system, and the system helps you.

Defense by Commitment: A Castle Guarded by Skilled Committed Defenders

And here’s the surprising part: even though the number of bakers is lower than before, the network is more secure. Why? Because what matters in game theory is not the number of players, it’s how much they stand to lose. Today, more stake is bonded across more participants. The “security wall” around the network is thicker, higher, and shared.

It’s the difference between a castle guarded by many unarmed volunteers and one guarded by fewer, highly skilled and committed soldiers whose lives depend on defending it. The second castle is safer every time.

Some blockchains rely on reputation to maintain order. Others rely on foundation influence or informal social rules. Tezos relies on mathematics. The protocol itself administers the incentives. There’s no negotiation, no privilege, no exceptions. The rules apply equally to everyone, and the safest, most profitable choice, consistently and predictably, is to behave honestly.

A Faster, Smarter, and More Human Staking Experience

Across several upgrades, the network has quietly become sharper, faster, and far more user friendly, like a fortress that not only reinforces its walls but learns to move its gates with precision. Resilience improved first: inactive bakers are cycled out quickly and restored just as fast, creating a self-correcting guard rotation that rewards consistent uptime. Then came speed. Cycle times dropped from ~2.8 days to 1 day, turning staking updates, delegation changes, and unlocks into a smooth experience. And finally, the user journey was streamlined: Unstaking became effortless, and automated helpers (hello Finn) now handle the mechanics behind the scenes. The result is a staking system that feels modern, powerful internally, seamless externally.

In Summary

https://tzkt.io/

Tezos didn’t reinvent its staking model overnight, it evolved through a long sequence of upgrades, each approved through on-chain governance and shaped by community input. These changes gradually shifted Tezos from a baker-only security model to a hybrid one where bakers and native stakers now secure the chain together. The result is a broader, healthier distribution of bonded stake, rising from ~7% to roughly ~27%, a level that now sits within industry standards for Proof-of-Stake security. And that number is still climbing quietly, as more participants choose to commit real stake, strengthen the network, and earn significantly better rewards than traditional delegators. Quietly, collaboratively, and mathematically, the network fortified its walls, and did so with the community steering every step of the process.

How Tezos Strengthened Its Walls Without Making a Sound was originally published in Tezos Commons on Medium, where people are continuing the conversation by highlighting and responding to this story.