Nearly 20% of Americans suffer from some form of mental illness — depression, substance use disorder, anxiety, psychoses, eating disorder, and others. Unfortunately, there remains a stigma associated with mental illness in our society that remains a barrier for those considering treatment.

Thankfully, the past few years have seen a surge in the number of startups trying to address various segments of mental health. An excellent example of this is the fast-growing Calm, which brings an app-based approach to the meditation and sleep space (valued at US$ 1 billion). The company quadrupled revenue in 2018 to US$ 150 million ARR and my wife and I are avid users.

The problem with an app-centric approach

Mental health is a vast category with a great deal of fragmentation, and most companies are trying to tackle isolated areas. There are startups that are leveraging mobile interfaces to create self-care behavioral change programs (Calm, Headspace, Happify); startups providing therapists with digital communication interfaces (Lyra, Ableto, Talkspace, Ginger); startups facilitating interoperability between practitioners and other stakeholders of the medical ecosystem (Valant, Mindstrong, Inflexxion); and startups building non-therapeutic mobile products (Thrive Global, Huddle, WeConnect). While this is a lot of activity in the space, these app-based approaches likely have a retention challenge and we know that single-point digital solutions lose efficacy if other points of care do not support them.

For those suffering from substance use, real transformations are possible only with multiple points of care. Most familiar with the domain believe that real opportunity lies in providing the whole continuum of care — bringing people in at the top of the funnel and providing them with treatment and long-term monitoring. The entire continuum of care can be capital intensive, but it is also most impactful in terms of driving outcomes. For instance, Groups, a startup working in opiate addiction care, is targeting populations in some of the hardest-hit areas (Midwest, Northern New England), delivering lower price points to people who can’t afford it, and increasing access for people who can’t leave their immediate area for therapy.

A company worth incubating in the addiction care space would focus on not just helping people get sober but also managing their intake, routing them to appropriate recovery methodologies, providing continuing care, and targeting different forms of therapy for different people. For real success, a startup could give value-based care, where it takes ownership of outcomes and manages every element of the continuum.

But having said that, it is inherently difficult for startups to take on such a broad mandate. Generally speaking, startups need to be focused on a niche or specific customer segment first and then grow into a broader platform play. This takes time, hard work, and sheer grit from the founding team. Additionally, this pattern of outward expansion makes something like an app so difficult since the mental health category is so broad and because there is no real technology or moat around it.

Trends in addiction care

Historically, the US has gone through different phases of medicalization and demedicalization of addiction issues, including prohibition and criminalization, with no movement toward improved treatment. Now, there is an opportunity in focusing on addiction recovery.

The one-size-fits-all model, which many companies are trying, does bring efficiency, especially with insured patients, but it doesn’t work for complex patients or the continuum of care. Moreover, the existing model of care relies on an unsatisfactory network of inpatient treatment centers. The problem begins with ownership. These treatment centers are not owned by startups, but by public companies and private equity firms. Unfortunately, these owners’ incentives are not necessarily aligned with patients’ expectations of care. Rather than focusing on total recovery, these owners want patients to come back.

For patients, the status quo is frustrating. In a 2018 survey, mental health treatment centers produced $39 billion in revenue, yet only met a meager 32.5 percent of the demand for services. This misalignment of incentives creates even more barriers for patients who are seeking complete, sustained recovery.

Startups need to think about segmentation — deciding on the value proposition based on the target population, which is not homogenous but differs in terms of, among other things, socio-economic status and the kind of addiction. An example of how segmentation is working is with Holly Whitaker’s Hip Sobriety, which targets “unlikely” alcoholics — millennials, homemakers, and college grads. It has built a powerful brand that is resonating because of this segmentation.

There are two trends related to addiction care that have changed in the last decade. First, the opioid crisis has led to more socioeconomically advantaged populations being affected, which has resulted in more considerable political attention and interest than was seen even a decade ago. Second, there is a greater awareness of the drivers of the cost of healthcare, along with the realization that targeting behavioral health can bring down costs. Government payers, starting with the passage of the Affordable Care Act (“ACA”), are moving in the direction of creating accountable care organizations that drive cost savings for the larger system. For that to be possible, there needs to be an emphasis on behavioral health.

Moreover, there is a better appreciation of the importance of end-to-end care, with a focus on outcomes, which hasn’t been the trend in the industry. Primary care for the longest time has not wanted to deal with addiction. But now, new companies like Quartet and Boulder Care are beginning to partner with local physicians and provide an online platform to remedy this neglect.

Challenges faced by startups in addiction care

Even though some startups are working in the B2B space, selling addiction services to employers can be very challenging for a whole range of reasons. The most obvious of these is the stigma associated with addiction, which also prevents employees from signing up for programs. A better strategy is to go to insurers. If startups can show some demonstrated efficacy, outcomes, and value-based results, selling to these entities becomes easier. It is a complex process that takes a long time but has real upside. However, selling to third-party payers is not for the faint of heart. Large insurance providers are ambivalent about partnering with novel services (apps, platforms) because of a relatively conservative mindset and the time it takes to see the value proposition.

Another way to strengthen the proposition is to partner with academics. For example, Pear Therapeutics has found success in an FDA-approved app for alcohol use disorder and is working on approval for opiate use disorder. Successful parlaying of relationships with academics and academic-minded physicians adds much credibility to what a startup has to offer.

On the B2C side, a significant challenge is that direct-to-consumer apps alone can’t keep users from addiction. A range of apps is beginning to get families involved, guiding them in the right direction for therapy, and demystifying the process. However, unless you are targeting the whole continuum of care, this process is not very useful.

Another problem on the B2C side is that many apps treating addiction are reactive, rather than proactive. In other words, those struggling with addiction won’t find these apps until they are near (or at) rock bottom. Apps don’t do enough to be at the top of the funnel, preventing those patients from reaching the bottom in the first place. While apps treating addiction can be a great tool to aid in recovery, users often find them when they are in dire circumstances and have sought basic help from third-party organizations like Alcoholics Anonymous.

The right startup to invest in

The most attractive startups are those that go to market with a model that targets multiple points of care to provide services at a lower cost than what a person would spend on medication or acquiring drugs. To work, startups will need to offer better access, especially in rural or semi-urban areas. Even when the company is in its earliest stage, there needs to be a vision to develop a full set of services that tie into the continuum of care.

Additionally, the revenue model of a startup in addiction care should avoid asking for a substantial monetary investment from the patient on the first day. Instead, they should perhaps consider a monthly subscription service for greater access and accountability.

Investing in early-stage startups means assessing the credibility of the founder(s) with imperfect information and taking a bet on whether they would be able to sell to third-party payers. It also means seeing if they have the vision to grow the company and penetrate the market opportunity.

Finally, successful startups in this space will be able to successfully measure their impact on users and subsequently transform those insights into measurement-based solutions. These solutions — powered by technology — are the secret sauce to creating a great business in this space. While the task isn’t easy, it is possible — so long as startups are unlocking significant value for their users.

Closing Thoughts

While mental health, including addiction care, remains a challenging space, we are confident that we will see a continuing upward trend in investment into this space. We already see a move among startups toward providing a continuum of care.

The stigma related to mental health is deeply ingrained in society and will take some time to go away. The success of startups working in this space will speed up this process. Another meaningful way that people in the investment community can help is if executives, founders, and other members of the community come forward and share their personal stories. Stephen Hays, founder of What If Ventures, shares his experience here. The sharing is beginning to happen, but it will take some time to become an industry-wide trend.

Graham Smith

Principal, What If Ventures

Venture Capital Associate, Bionic

What If Ventures is an early-stage venture capital fund focused on mental health and addiction recovery solutions. Stephen Hays is the founder and is a Dallas based venture capitalist focused on the mental health and addiction recovery industry. Feel free to reach out on LinkedIn, Twitter or via whatif.vc. Previously, Stephen Hays founded and managed Deep Space Ventures, a venture capital firm based in Dallas, TX.

The headlines for the two proposals are:

• Athens A: Increase the gas limit AND reduce the roll size from 10,000 to 8,000 XTZ.
• Athens B: Increase the gas limit

There are many posts and articles discussing the pros and cons of each of the above proposals. Before we jump in with our perspective of the reduced roll size, we’d like to give focus to something that is a bit more meta. We’d like to discuss the way that new proposals for the Tezos protocol, and in general, proposals of self-governed blockchains should be presented and distributed.

From our observation, the current process for proposal submission is somewhat flawed and open for exploitation.

Going back to the Athens proposals, the decrease in Tezos roll size has become the point of division amongst bakers and delegators. The bakers, fearing retaliation by their delegator base usually takes to social media to allow their delegators to vote for and decide on their vote of Athens A or B.

Even the gas limit change is glossed over.

Current discussions are around ‘Will decreasing the roll size be better for Tezos adoption?’ and ‘Is voting for something this trivial, the best use of the Tezos Foundation’s resources?’

What the public isn’t discussing or may NOT even know about are the 23 other changes incorporated in the Athens proposals.

The public is currently fixated on 1 out of the 24 proposed changes within the proposals. They are essentially passively accepting the 23 other changes.

For details, refer to Nomadic’s post.

The majority of the public, yes, even Tezos stakers, aren’t experienced in voting on bills and passing laws. We can easily get caught up in sensationalism and hype, and gloss over the important terms of a protocol proposal. The devil is really in the detail.

Anyone can propose a set of changes to the protocol, and hide a malicious or self-serving change behind both a laundry list of changes and controversial changes. A possible attack can occur by submitting two proposals, both having the same target malicious change but one being slightly different and incorporating a controversial change as well. The public will fixate on the controversial topic and thus one proposal, vote on it and pass it while also unknowingly accepting the malicious change.

The general voter is inexperienced in passing bills and laws, and attacks like the example above can occur.

Our proposal is to have a clear, concise, and non-technical manifesto required with each Tezos protocol proposal outlining all of the proposed changes for the public to review and scrutinize. Currently, it is too easy to hide certain proposed changes to the protocol, gain public support, and vote the change into effect.

Similar to what the GDPR has done to clean up complex corporate Privacy Policies, we need to make protocol proposals accessible to the average Tezos holder.

At the time of this writing (6pm, March 11, 2019, Eastern Time), 69.41% of those that have voted have voted for Athens A. 67.6% of the votes (or 35351 votes) hasn’t been cast yet.

And now, to join the party on the discussion of roll size…

While we’ve seen many valid points arguing for and against the reduction of the Tezos roll size, we wanted to summarize some of our thoughts and perhaps offer a few new perspectives.

By reducing the roll size, we could see:

• Increased engagement by the community which may further increase adoption. However, there will also be an increased # of self delegators (i.e. self serve) which may impact existing delegates’ models in a negative way. With fewer delegators, delegates’ bottom lines will be impacted.
• Temporary increased technical overhead for all stakeholders including for the foundation, bakers, and developers. Too small an amount of roll size reduction and the update will likely not result in huge benefits for the network (in terms of increased bakers) but will incur technical costs. Too large of a decrease in rolls size could have the potential to destabilize the existing relationship and dynamic between bakers and delegators.
• An interesting dynamic where with incrementally smaller roll sizes, in theory, there could be less unused XTZ overall. With a roll size of 10,000, 9,999 XTZ can be wasted in a baker’s wallet as it doesn’t form a full role. However, with a roll size of 5,000, only a maximum of 4,999 would be wasted. In practice though, waste is harder to predict.
• Another potential positive is that it’s good to test the ability for Tezos to support relatively large infrastructure changes earlier on. Issues should be detected as early as possible. If successful, it’ll also build confidence in one of the core value propositions of Tezos: self-governance.
• Lastly, it’s important to note that the incentives between different types of stakeholders are not necessarily aligned and at times, completely opposite. A larger baker, for example, would want a higher barrier to entry (i.e. larger XTZ rolls) whereas a self delegator may want a much lower roll size.

What Tezos can learn from GDPR was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

The past holidays, however, has been mostly quiet for Tezos with the exception of us passing the landmark 64th cycle. For those unfamiliar, between the 1st and 64th cycle, the bond requirement for staking increased linearly until it reached the full bond requirements a few days ago. I explain bonding in more detail in the Tezos Baking Economics Guide.

Here are some additional highlights:

• We see that bond as a % of staking has dropped slightly to the range of 10% to 11.5% (as referenced by the blue line in the chart below). This was caused by a sudden relative plateauing of the total frozen XTZ while the total staking XTZ jumped by 7.2M to 486M on January 4.

• The % of XTZ staking has steadily increased from 61% to 65% from December 1 to January 12.

• Correspondingly, the number of XTZ staked has increased from 372M to 388M from December 1 to January 12.

• The number of delegators has steadily increased by 8% (from 10,968 to 11,880) during the same period as Tezos gradually gains more popularity.

• Luckily, there has been no additional cases of double baking from December to January so the total double bakes remain at 92.

The above charts are regularly updated and can be accessed here. For the latest updates and in-depth analyses of Tezos and other PoS based blockchains, follow us on Medium or on Twitter.

As always, feedback and suggestions for changes/corrections are welcome. Thank you Andy, Matt, and Lorien for your review and feedback. If you’d like to learn more about the Figment Networks Baker and our unique approach, please email us at contact@figment.network. If you are looking for our work on Cosmos, please check here.

Tezos’ New Year Update was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

At Figment, we‘ve created internal dashboards for tracking the core metrics of the Tezos network. We believe it’s important to be aware of developing trends and events similar to the above as soon as they occur.

In the spirit of building a more informed and active Tezos community, we’d like to open these dashboards to the general public. If you’re reading this and have suggestions for new ways to visualize the health and adoption of Tezos, please leave a comment below. We’re actively working on adding new metrics and dashboards as part of this effort.

I’m detailing some of the information contained in our dashboards in the next sections.

Tezos Core Metrics

https://public.tableau.com/views/TezosCoreDashboard/TezosCoreMetrics

This set of dashboards contain information relating to delegation, staking, accounts, and frozen XTZ.

On November 14, we’ve started noticing a new trend with a higher rate of new XTZ accounts being created. See below chart. Within a few days, we realized it was likely a spam attack given the abnormal curve and lack of other indicators such as increases in XTZ movement.

In another example, we see that ~8.5% of staking XTZ is currently held in bond whereas ~7% of full balance XTZ is currently frozen. The current sloped trend depicted in the below chart is observed due to the initial ramp-up of the bond requirement along with the percent of XTZ being staked. For more information on bonds and staking, refer to our Tezos Economics Guide.

Double Baking

https://public.tableau.com/views/TezosDoubleBaking/TezosDoubleBaking

This set of dashboards show the top offenders of double baking along with the top denouncers, and the bonds and rewards being lost. We also track double baking over time.

In general, the Foundation Bakers seem to be the dominant force behind the number of double bakers being denounced. See below.

We also took notice when we saw that the baker tz1KksC8RvjUWAbXYJuNrUbontHGor26Cztk double baked twice on November 19, and lost a total of ~39,000 bond and rewards. This was later proved to be the cause of the 90-minute stall of the Tezos network at level 200704 on November 23. We show the top double bakers by XTZ lost below.

Onwards and Upwards

With these and other dashboards in our pipeline, we hope delegators, bakers, and the general Tezos community will become more informed. Our goal is to help the community detect abnormalities within the network with higher efficiency so we can drive towards a stronger adoption of Tezos!

Feedback and suggestions for changes/corrections welcome.

Thanks to Andy, Matt, and Lorien for review and feedback about the above article. If you’d like to learn more about the Figment Networks Baker and our unique approach, please email at contact@figment.network. If you are looking for our work on Cosmos, please check here.

Launch of Tezos Dashboard was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

To our fellow bakers, we have some exciting news! For the past few months, we at Figment have worked hard to set up a secure and scalable infrastructure for our delegators. After having spoken with many other leading bakers and hearing feedback from the general Tezos community, we have decided to open source our reward distribution system. Managing reward distribution manually is both time consuming and very error prone causing delays and potential distrust among the delegator community when mistakes occur.

While the Tezos protocol is decentralized, bakers, for the most part, operate their own proprietary technology stacks. From building our own baking operations, we feel there are certain core elements of our stack and of the baking process that we’d like to share with the broader community. As a side note, if you’re looking to understand the economics of Tezos baking, read our previous post here.

Without further ado, here is the code to our XTZ distribution system: https://github.com/figment-networks/tezos-batch-payments. Note that although it was made with reward distribution in mind, the system can actually be used for any batch XTZ distribution as well. Leave us a note below on how you’re using it!

Here are a few highlights of what’s under the hood:

• Security: XTZ distribution is handled with the creation of a ‘burner’ XTZ account so that the main baking account is not directly used for distributing XTZ. The distribution server just needs the ‘burner’ private keys and never needs to have access to the baking account’s private keys. In addition, the total XTZ on the distribution server is limited to the amount in the ‘burner’ account.
• Error Checking and Simulation: XTZ distribution is simulated and verified for erroneous transactions prior to actual distribution.
• Configurable: The source code is modularized for ease of configurability and extensibility.

Have any suggestions or feedback (or perhaps a high five)? Leave us a comment below!

Announcing Tezos Batch Payments! was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

Fresh from the oven, an abundance of Tezos rewards!

We’re thrilled at Figment to announce the launch of our Tezos staking platform. For months, we’ve been building and testing our enterprise-level infrastructure for Tezos staking. After baking many cycles with our private investments, we’re excited to open this platform to the public.

A Secure Way to Delegate

Our staking infrastructure is built from the ground up with security and reliability in mind. We have a strict set of Standard Operating Procedures that we follow and perform regular audits of our technology stack and facilities.

We take security seriously so you can delegate with ease and peace of mind.

Beyond Tezos, we also provide access to a growing portfolio of new and groundbreaking digital assets. We perform the research and due diligence to ensure the quality and sustainability of the underlying assets, and to continually build the right infrastructure that makes participating in these assets simple.

Technology Enabled Platform for Added Transparency and Scaling

We strongly believe in business transparency. That is why we invest in technology solutions that allow our delegators to have a full 360 view into their staking balance and future rewards. At any time, you can enter your delegation address to check your past transactions and rewards along with projected future rewards.

https://figment.network/tezos/bakery

In addition to surfacing full transaction histories to our delegators, we have also built a secure and automated payout distribution system. We believe in a fast and effective way to distribute rewards to our delegators. Manual payout systems employed by other delegates are both error-prone and slow, sometimes delaying reward payments by weeks. We feel this is simply unacceptable. At Figment, we get paid together.

What is Tezos?

Tezos is a new Proof of Stake blockchain that can evolve by upgrading itself. Stakeholders vote on amendments to the protocol, including amendments to the voting procedure itself, to reach social consensus on proposals. Tezos supports smart contracts and offers a platform to build decentralized applications. By staking in Tezos, you earn rewards in the form of Tezos tokens.

How do I delegate to Figment?

We make delegating easy (and anonymous!). Our delegate address is:

tz1Scdr2HsZiQjc7bHMeBbmDRXYVvdhjJbBh

Want to learn more about delegating? Simply follow these steps here: https://figment.network/tezos/bakery#delegation

Can I delegate other tokens to Figment?

We will provide secure delegation services for Cosmos as well. Subscribe to our newsletter to be updated on the latest crypto research and launch of new delegation services. If you’d like to learn more about the Figment Networks Baker and our unique approach, please email at contact@figment.network and join our Discord.

Stake Your Tezos with Figment Networks! was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

Andrew Cronk (Figment), Meher Roy (Chorus One), and Jake Brukhman (CoinFund) discuss evaluating crypto networks and what it means to have institutional investors paying attention to space. They talk about the unique way that an investment firm participates in the growth of a network in the crypto world and why it’s more important to be a network participant than just a funder.

https://www.spreaker.com/user/10197011/andrew-cronk-and-jake-1

Village Global’s Crypto Stories: “Explain Generalized Mining Like I’m Five”

Andrew Cronk (Figment) goes into generalized mining. He contrasts sending someone money via PayPal with sending someone money via a decentralized network. He talks about whether firms with different approaches in the space can co-exist and what it means to be a validator and why it’s important for a firm to be an active participant in a network. Andrew also explains how and why they’ve set up Figment to be itself a decentralized firm with no office and individuals working around the world.

https://www.spreaker.com/user/10197011/andrew-cronk-on-2018-08-25-1

Figment Podcasts was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

https://docs.google.com/spreadsheets/d/1MTN4ydvjBK2xR_XGZlcgmFiLZS8y5O2LBiH-gLUuXuo/edit#gid=101020874

This guide aims to explain some of the assumptions and caveats relating to the above set of projections modeling the operations and financials of baking in Tezos.

For anyone unfamiliar with the details of Tezos, here’s a good guide from the Tezos Foundation: https://tezos.gitlab.io/master/whitedoc/proof_of_stake.html

Caveats and Explanations of Model

Profit vs XTZ Price Relationship

• Definition: The tab of Annual Profit/Rev vs Price was created to help quickly establish an understanding of how profitable it will be to operate a Tezos node based on XTZ held in relationship to the XTZ price. In the assumptions tab, you will find the re-occuring costs (hardware setup, cloud ops, and marketing/community).
• Significance: Use this chart to assess the potential one-year profitability of operating a Tezos node based on the projected price of XTZ (if the earned XTZ were exchanged for fiat currency at the labeled XTZ price). See the profit vs price tab in the model linked above to dig in further.

Tezos Total Supply

• Definition: The total amount of XTZ supply is currently projected to grow at 5.5% year over year. In other words, the current annual inflation of XTZ is 5.5%. This annual inflation is currently set to decrease over time if reward amounts and other factors stay constant as the annual total new rewards generated as a percent of overall XTZ supply will decrease year over year.
• Significance: The total Tezos supply is assumed by the model to be 763,306,930. The increase in Tezos Supply isn’t currently modeled as there is no authoritative source yet on the current supply to verify correctness. However, the net new Tezos supply should always be the total rewards generated minus the total XTZ burned (due to certain malicious baker activities as punishment) during a period. Given the large current supply and the relatively small number of total new rewards generated since Tezos launch, the impact of not modeling the supply growth is small. However, the impact will grow as the total supply deviates further from 763,306,930.

Average Time Between Blocks

• Definition: The average amount of time to generate a new block in the Tezos blockchain is aimed by the Tezos foundation to be 60 seconds.
• Significance: Data captured by the actual daily performance of Tezos since June 30, 2018 seems to suggest that blocks are on average created every 64 seconds. Since each Tezos cycle contains 4096 blocks, the difference in performance times have a non-trivial impact on number of days required to complete a Tezos cycle.

Staking Percentage

• Definition: Since Tezos operates by Proof of Stake, XTZ holders are expected to stake their XTZ. The Total Network Staking Percentage is the amount of XTZ participating in baking and endorsement either via direct participation or delegation. The staking percentage has a real impact on both bond requirements (defined below) and rewards being generated from baking and endorsing. A lower staking percentage means there are fewer XTZ participating in baking and endorsement thus increasing the probability that XTZ that are being staked to be selected for baking and/or endorsing more frequently. Although this means more rewards for the bakers and/or endorsers, this also means a higher bond requirement given the increased participation.
• Significance: It is generally assumed that with wider adoption given increased PR, the stability of the Tezos infrastructure, and more accessible XTZ marketplaces, that the staking percentage will increase. Given the infancy of Tezos, it is challenging to model the growth of staking percentage. We’ve assumed a plateau in staking percentage of around 55% for now but this is easily changed in the model.

Bond Requirement

• Definition: To discourage bad actors and ensure correctness of new blocks being generated, every time a baker participates in baking or endorsement, she is required to put up a bond (i.e. security deposit) for 5 cycles. For baking, 512 XTZ is required for the bond whereas 64 XTZ is required for endorsing. Assuming no harmful activities have occurred during baking and/or endorsing, the baker gets her bond back at the end of 5 cycles after the bake or endorsement. The baker cannot bake or endorse if she doesn’t have the required bond amount.
• Significance: The current model approximates the bond requirement per cycle by assuming that the total bond of the network is 8.24% of the total XTZ supply. In other words, given that only the active bakers are contributing to the bond, although the number of XTZ in the total bond is the same, the bond required per active baker as a percent of the baker’s total XTZ is higher than 8.24%. For more details, the calculations are reflected in the spreadsheet.

Delegation Amount

• Definition: Holders of XTZ can delegate their XTZ to bakers if the holders don’t want to bake themselves either due to the risks associated with bonding or the complexities of setting up a baking operation. Delegators should be aware that a baker should only take as much delegation as the baker can bond. The current model assumes that the baker operates with a full delegation.
• Significance: To participate in the growth of XTZ, holders of XTZ should choose a credible baker.

Baker Selection Criteria

• Definition: Bakers and endorsers are randomly selected 7 cycles prior to actual baking or endorsing. A snapshot of the number of XTZ rolls (i.e. groups of 10,000 XTZ) owned by each baker (and thus delegate) is taken every 256 blocks, or roughly every 4 hours. This equates to 16 snapshots per cycle. One snapshot is then randomly selected for choosing the bakers and endorsers that will operate 7 cycles later.
• Significance: The current model assumes no selection bias (and therefore a completely random) selection of bakers and endorsers. The model then assumes a probability for the baker being selected for baking and endorsing based on the number of XTZ rolls held as a percentage of total XTZ rolls staked. Rewards are then derived from the number of assumed bakes and endorsements.

XTZ Price

• Definition: The price of XTZ as with any cryptocurrency, fluctuates. For the latest XTZ price, checkout: https://coinmarketcap.com/currencies/tezos/
• Significance: There is a default USD XTZ price included in the model for monetary calculations (e.g. revenue and profit). However, this can easily be modified to other currencies and amounts. The rest of the numbers in the spreadsheet should automatically update once the XTZ price is updated in the Summary tab.

Period of Projections

• Definition: The model projects for 12 months. However, the number of months in the 12 Month Model tab is dependent on the cycle length which is in turn dependent on the average time between blocks. The Dates row in the 12 Month Model tab will dynamically change according to the Average Time Between Blocks input in the Summary tab.
• Significance: The current model assumes that baking starts near October 1, 2018, and ends near October 1, 2019. However, this is adjustable — just ensure that the relevant One Year Summary in the Summary tab is modified accordingly.

Feedback and suggestions for changes/corrections welcome.

Thanks to Andy, Matt, and Lorien for review and feedback about the above article. If you’d like to learn more about the Figment Networks Baker and our unique approach, please email at contact@figment.network

Tezos Baking Economics — Guide was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.