XDC Network is a hybrid blockchain designed to facilitate global trade and finance sectors. XDC hosts several decentralized applications (dapps).
XDC Network is a hybrid blockchain designed to facilitate global trade and finance sectors. XDC hosts several decentralized applications (dapps) that offer solutions for trade finance, payments, and supply chain management.
Traditional trade and financial systems are often plagued by barriers that affect their efficiencies, such as third-party intermediaries, delays, and overly complicated processes. XDC Network addresses these shortcomings by streamlining processes and enabling real-time tracking and verification of goods and services, fostering a more transparent and efficient global marketplace. Using XDC Network, businesses can improve their record keeping, exchange data and transfer assets more efficiently and more securely.
Its unique architecture leverages an EVM-compatible chain with smart contract capabilities for building dapps and the ISO 20022 messaging standard used by traditional systems which allows the chain to integrate within existing infrastructures.
Further, the XDC Network can transform the trade finance industry by bringing decentralization, liquidity, and tokenization of real-world assets to the forefront.
XDC Network’s native cryptocurrency, XDC token, allows users to participate in staking, governance, and access a growing number of dapps tailored for global commerce.
Using a delegated Proof of Stake consensus mechanism (XDPoS), XDC Network offers a scalable and efficient platform poised to transform how businesses and financial institutions operate across borders.
Who created XDC Network?
XDC Network was developed in 2017 by XinFin, which stands for Exchange Infinite. XinFin is a Singapore-based blockchain technology company that specializes in international trade and finance.
XinFin and XDC Network co-founders Ritesh Kakkad and Atul Khekade have extensive experience in finance and technology. Kakkad is an entrepreneur with a background in cloud hosting and web infrastructure and Khekade co-founded an airline chartering company and was part of a team that created the first permissioned blockchain for Asian banks.
XDC Network is also supported by the XDC Foundation who collaborates with developers, trade experts and content creators to further the growth, development and adoption of the network.
XDC Network went through a token generation event (TGE) where they distributed their tokens to investors at $0.0029 per token. In 2022, XinFin raised an additional $50 million through a funding round led by LDA Capital.
How does XDC Network work?
The XDC Network unlocks a wide range of use cases for businesses and individuals to engage in global trade and finance. Some of its main use cases include:
Trade – Streamlines and digitizes processes like letters of credit with the aim of reducing costs and mitigating risks.
Supply chain management – Provides transparent and more secure tracking of goods as they move through the supply chain, enhancing visibility and reducing fraud.
Remittances – Enables faster, cheaper, and more efficient cross-border payments for global financial inclusion.
Tokenization – Allows for the representation of real-world assets on the XDC blockchain, increasing liquidity and accessibility for a wider range of investors.
In order to operate effectively, XDC Network makes use of several unique features.
Hybrid blockchain architecture
XDC Network’s hybrid architecture is meant to combine the features of public and private blockchains to navigate the complex needs of international trade and finance.
The public aspect ensures transparency and accessibility for anyone who wishes to participate in the network and access the wide list of dapps available. The private component provides an added layer of security and privacy needed for sensitive financial and company data.
Smart Contracts
Smart contracts are self-executing agreements with the terms of the agreement directly written into lines of code.
On the XDC Network, they play a pivotal role in automating trade processes and supply chain management by reducing the need for intermediaries, minimizing human error and accelerating transaction time.
For example, smart contracts can be used to automate escrow agreements by holding funds until the terms of an agreement are met, making international trade faster and more efficient.
Masternodes
Masternodes are users (nodes) that are responsible for validating transactions, proposing new blocks and maintaining the network’s security and integrity. Masternodes are rewarded for their contribution with newly minted XDC tokens.
To become a Masternode, operators must stake a minimum of 10 million XDC, which can be removed if they act maliciously. XDC Network also has Standby Masternodes who are ready to replace any Masternode that drops out. This structure ensures network security, decentralization, and resilience to bad actors.
ISO 20022 Compliance
XDC Network adheres to the international ISO 20022 messaging standard, one that is widely used in traditional banking systems.
By complying with ISO 20022, XDC Network dapps are interoperable with traditional systems thanks to its ability to communicate with the existing financial infrastructure. This makes it easier for businesses and institutions to adopt blockchain technology without disrupting their established processes.
What is the XDC network consensus mechanism?
The XDC Network operates on a unique consensus mechanism called XinFin Delegated Proof of Stake (XDPoS), a hybrid model that combines aspects of Delegated Proof of Stake (DPoS) and masternodes.
Due to the high threshold to become a Masternode (staking10 million XDC), token holders can delegate their XDC tokens to validators of their choice. This approach promotes decentralization while maintaining efficiency, as a limited number of masternodes handle the validation process.
Staking XDC not only supports the network's security but also allows users who run masternodes to earn potential rewards. Those who don't wish to run a masternode (or can’t) can delegate their stake to an existing one, sharing in the rewards while contributing to the network's overall security.
Of note, Masternodes and delegators do not have an unbonding period to withdraw their staked tokens, allowing for greater flexibility for participants.
How does the XDC token work?
XDC, the native cryptocurrency of the XDC Network, helps power the entire network. With a fixed maximum supply of 100 billion tokens, XDC plays a vital role in various aspects of the network, such as:
Transaction Fees: Users pay fees in XDC to process their transactions, driving smooth and efficient operation.
Staking and delegating: Users can stake their XDC tokens to become masternodes or delegate their tokens to existing masternodes, earning rewards in return. This incentivizes participation and maintains the integrity of the network.
Governance: Holding XDC allows token holders to vote on proposals and influence the direction of the network.
XDC tokenomics
XDC’s cryptocurrency was released in 2018 as part of a TGE with a maximum supply limit of 100,000,000,000 tokens.
The initial supply of 37.5 billion XDC was distributed as follows:
- 40% – 15,000,000,000 XDC – Founders/team
- 27% – 10,000,000,000 XDC – Ecosystem development
- 6% – 2,500,000,000 XDC – Treasury
- 27% – 10,000,000,000 XDC – Pre-placement
The remaining tokens are gradually released through block rewards to masternodes and their delegators. A portion of transaction fees is burned, creating deflationary pressure that could counterbalance the inflationary effect of block rewards.
Conclusion
XDC Network is a hybrid blockchain streamlining global trade and finance, offering solutions for payments, trade finance, and supply chains.
XDC Network uses a unique Delegated Proof of Stake (XDPoS) consensus mechanism, where holders delegate tokens to masternodes for transaction validation and network security.
The XDC token, native to the network, is used for fees, staking rewards, governance, and accessing dapps designed for global commerce.