Ctez

The Tezos blockchain is built to  evolve continuously. Therefore, Tezos has a unique governance system  that allows the blockchain to upgrade seamlessly, without the need for  inconvenient hard forks. Anyone can participate in Tezos governance,  although voting on protocol upgrades requires ownership of the native  Tezos token tez (XTZ). To stake tez, most users ‘delegate’ their tez to a  baker, meaning that the bakers will vote on protocol upgrades on behalf  of the users.

With the rise of  decentralized finance (DeFi) on Tezos, an increasing amount of tez is  being locked into smart contracts and pooled. This raises the question:  who’s baking? In addition, the pooling of large amounts of tez in a  single smart contract may also introduce the risk of centralization.  This is where ctez comes into play, which is essentially a synthetic  version of tez designed to have the same value. While ctez can be used  for e.g. DeFi purposes, you’ll stay in control of your native tez tokens  for governance and baking rewards.