Tezos has self-regulated governance at all levels within the protocol. In particular, the decision-making process becomes decentralized through a process called baking by which Tezos holders can vote on changes to the network’s future direction. Through testing and agreement by the community, all modifications and updates are then applied to the blockchain.
Delegated Proof of Stake
DPoS is an algorithm used by nodes running the Tezos software to secure the network. Users are staking XTZ to participate in the consensus with the least amount at 8,000 XTZ. In DPoS holders can delegate tokens from another user so that stakeholders can distribute their stake to one or more holders, who can then create blocks and validate transactions on their behalf.
Baking is the act of signing and publishing a block on the Tezos blockchain. They ensure that all transactions in a block are correct, that the order of transactions has been agreed upon, and that no double-spending has taken place.