# Tezos ⎊ Area ⎊ Greeks.live

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## What is the Architecture of Tezos?

Tezos distinguishes itself through its self-amending blockchain architecture, designed for on-chain governance and protocol upgrades. This contrasts with traditional blockchains requiring hard forks for significant changes. The architecture incorporates a formal verification layer, aiming to mathematically prove the correctness of code updates, reducing the risk of vulnerabilities. This layered approach facilitates a more adaptable and secure environment for decentralized applications and derivative instruments.

## What is the Contract of Tezos?

Smart contracts on Tezos, written primarily in Michelson, enable the creation of complex financial derivatives, including options and perpetual swaps. These contracts benefit from the blockchain's immutability and transparency, providing a verifiable record of terms and execution. Formal verification techniques can be applied to these contracts, enhancing their reliability and reducing the potential for errors in pricing models or settlement procedures. The deterministic nature of Michelson execution is crucial for consistent derivative pricing across nodes.

## What is the Algorithm of Tezos?

The Tezos consensus algorithm, initially Proof-of-Stake (PoS) and evolving with enhancements, governs block production and transaction validation. This algorithm incentivizes network participation and secures the blockchain against malicious attacks. The self-amendment capability allows for adjustments to the algorithm itself, adapting to changing market conditions and technological advancements. This dynamic consensus mechanism supports the efficient and secure execution of derivative contracts and related financial operations.


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## [Blockchain Throughput Constraints](https://term.greeks.live/term/blockchain-throughput-constraints/)

Meaning ⎊ Blockchain throughput constraints dictate the operational speed and systemic reliability of decentralized derivative markets and risk management. ⎊ Term

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**Original URL:** https://term.greeks.live/area/tezos/