Tezos (XTZ) price drops after 'Nairobi' upgrade: here's why

Tezos (XTZ) price had dropped after the ‘Nairobi’ Upgrade, which traders thought would add to the bullish momentum that the token enjoyed for the last seven days. Tezos has declined by about 2% today eating into its 11% gain over the past week.

But why is the price of Tezos dropping after the ‘Nairobi’ upgrade which also coincided with the launch of the Tezos Ecosystem DAO? Well, the most possible reason for the price drop is that the market is letting off some pressure after a week of constant climb.

Increasing Tezos transaction throughput

The Nairobi upgrade, which was jointly developed by several teams including Nomadic Labs, Marigold, TriliTech, Oxhead Alpha, Tarides, DaiLambda, and Functori, brings about a number of mainnet enhancements. The increased transaction throughput, which enables quicker transaction processing and lower transaction fees, is a key feature of these improvements.

Tezos’ throughput has increased eight times since the upgrade, and this increase applies to a variety of operations, including transactions, smart contract calls, and Smart Rollup maintenance operations.

Notably, Tezos now supports Smart Rollup features thanks to the Nairobi update. As a result of new features and internal Layer-2 messages added to the blockchain platform, Tezos is now able to seamlessly synchronize rollup kernels with protocol upgrades in the future. Tezos has also improved its terminology to facilitate communication and understanding. Additionally, improvements for quicker consensus have been made, especially with the accelerated pre-attestation propagation.

Tezos Ecosystem DAO

The Nairobi Upgrade overlapped with the launch of the Tezos Ecosystem DAO, which aims to enhance on-chain funds deployment and treasury management for crucial initiatives within the Tezos ecosystem.

The decentralized autonomous organization (DAO) enables members of the community to submit funding requests for projects connected to Tezos, which are then reviewed, voted on, and awarded XTZ.

A three-out-of-five multi-sig setup will initially govern the DAO, with companies like the Tezos Foundation, the Tezos India Foundation, and Trilitech, holding the keys.