How XinFin Network is Solving the Most Complex Problem in the Crypto Space
XinFin Network is a hybrid blockchain platform designed to solve the most complex problems in the crypto space. Today we all know Blockchain is a distributed ledger technology (DLT)1, but unfortunately, we are not aware of the scalability issues of this technology.
In 2009, blockchain emerged in the world’s eyes through the invention of Bitcoin, a peer-to-peer electronic cash system without no one being middleman and more decentralized2. Bitcoin is highly secure and decentralized but lessens scalable, a significant channel facing this entire crypto market. In September 2022, Ethereum was converting its mechanism into Proof of stake (POS) consensus because they wanted to achieve scalability in this network3. Blockchain is the foundation of cryptocurrencies like Bitcoin and the Ethereum network. However, different networks operate on various consensus mechanisms. For instance, Bitcoin uses the Proof-of-Work (POW) mechanism4, while Ethereum has recently shifted to Proof-of-Stake (POS). On the other hand, many cryptocurrencies have different agreements, but most rely on POS mechanisms5.
Blockchain is a technology that enables transparency with the help of the distributing form of data recording. This distributed phenomenon makes cryptocurrency like Bitcoin more decentralized and creates scalability issues in this network. Join us as we explore the core of blockchain technology, how XinFin Network solves its most pressing problems, and the future of the XDC token.
Blockchain and its Version
Blockchain technology using from different perspectives year after year when Bitcoin got hyped in 2009. Now, at this time, we are in the third version of the blockchain. But the issue of scalability becomes a hurdle to accepting this technology.
The first version of Blockchain
In 2008, blockchain technology was used by Satoshi Nakamoto to create Bitcoin, a new currency introduced in 20096. The idea behind Bitcoin was to use the Proof of Work (POW) consensus, which allows for creating “engineering money” through blockchain and cryptography methods backed by energy costs. Bitcoin network solves the double spending issue and is more secure and decentralized.
The second version of Blockchain
In 2013, Vitalik Buterin introduced the Ethereum smart-contract development network. Anyone can create a smart contract and then run into the network, which makes Ethereum more popular. Therefore, many more crypto projects have produced the same as the Ethereum network7.
They address the issues in existing blockchains like scalability, speed, and interoperability. Polygon is a famous scaling solution which handles the second-largest $218 billion Ethereum network. Solana, launched in 2020, is a third-generation blockchain that effectively addresses Ethereum’s network congestion issues and high costs. Solana extends gain in one year from a 75 million market cap to a 75 billion market cap. So, third-generation blockchains address scalability, speed, and interoperability problems in blockchain platforms8.
Correlation of Scalability with Types of Blockchains
There are four different types of blockchains: public, private, hybrid, and consortium. Public blockchains are open to anyone, while private blockchains are exclusive to a specific group. Hybrid blockchains operate publicly and privately, and consortium blockchain, also called federated blockchain, combines the features of private and public blockchains like a hybrid blockchain9.
In a public blockchain, scalability is impossible to achieve. A private blockchain is highly scalable but hard to achieve decentralization. Ethereum founder Burtein introduces the concept of blockchain trilemma in which the one blockchain does not provide three things like decentralization, scalable, and security10. For example, bitcoin has more decentralization but is less scalable. On the other hand, the Binance chain has more scalable but less decentralized.
After ETH 2.0, the project toward the Multi-Chain ecosystems wants to resolve the issue of blockchain trilemma. For example, one blockchain provides data, the second includes scalability like layer-2 solutions, and the Ethereum chain is the main chain. Scalability is a core issue after emerging of cryptocurrency11. That’s why projects in crypto focus on scalability. Bitcoin also has a layer-2 solution, a lighting network that boosts the network speed. On the other hand, Ethereum is a smart-contract platform that also wants scalability, interoperability, speed, and less expensive that’s why they eliminated the proof of work (POW) mechanism and shifted to the POS consensus12.
Consensus and Scalability
Consensus is essential for democracy, decentralization, and technologies like distributed registries. In cryptography, an agreement is a decision-making procedure for all network members to agree on the latest information added to the chain, such as a data block or transaction batch. It prevents one person from controlling the system and encourages everyone to follow the rules. It helps keep the chain accurate and trustworthy. On the other hand, blockchain is a type of ledger not controlled by a central authority and used to manage transactions. This allows any participant to conduct a transaction based on the rules set by a smart contract without needing a third party. However, as more people use Blockchain, there can be delays in processing transactions13.
Scalable consensus algorithms can enhance scalability and transaction throughput. Delegated Proof-of-Stake (DPOS) and Byzantine Fault Tolerance (BFT) are two such algorithms. DPOS functions like a democratic process, where token holders select validators for network transactions, with the number of validators ranging from 10 to 100 and changing regularly. On the other hand, BFT is a reliable tool for addressing the Byzantine General’s Problem, involving continuous consensus despite multiple adversarial participants in the network14.
Scalability with Hybrid Blockchain
We are concentrating on making our blockchain more scalable in the third era. We are doing this by combining public and private blockchain features called a hybrid or consortium blockchain. While public blockchains offer transparency, their open nature can make network efficiency expensive for transactions due to the high gas fees. The more nodes, the less scalability, making them unsuitable for scalability15. Hybrid blockchains have more scope of adoption in the real world for multiple organizations such as:
- Hybrid IoT: Hybrid blockchains can prevent security threats for IoT devices and simplify the integration of different IoT devices
- Trust among Enterprises: Hybrid blockchains can enhance transparency, dependability, and trust for companies.
- Supply Chain: The hybrid blockchain is ideal for supply networks since it is extensive and requires private and public information. Many logistics firms, such as the IBM food trust, are already using it to make the food supply chain more efficient. Everyone from farmers to wholesalers and distributors participates in this network, with Walmart also actively involved.
- Banking: Hybrid blockchains are a good option for finance because banks need to secure user information while resolving internal issues.
- Government Use Cases: Governments can use hybrid blockchains for public identification databases, electoral voting, humanitarian and social aid, medical records, and acquisition processes.
- Global Finance and Trade: XinFin utilizes a hybrid blockchain consisting of Quorum for private information and Ethereum for public data in financial applications. Their objective is to establish a hybrid platform for global trade and finance.
Xinfin Network Approach the Scalability and Regulatory with Hybrid Blockchain
XDC Network and its hybrid approach recognize the benefits of public networks and develop a solution to address this issue. They created a private subnetwork within the shared public ledger, allowing for transactions to be verified while also preserving data privacy. Institutions can establish their private network by running a node, and confidential documents can remain within this network, with only limited data moving to the public network16.
The foundation of XinFin’s products and ecosystem is the XinFin Hybrid Blockchain, which uses an innovative XDPoS consensus. To make it easy for users and master-node owners to interact with the XinFin XDPoS blockchain, the company has created tools like XinFin Scan, Master-node app, XinFin Web Wallet, and XinFin mobile wallet. They plan to keep improving these tools in the long term and also work on developing new and innovative products and technologies to make XinFin an ideal platform for open finance and enterprise-oriented applications.
The XDC Network aims to use blockchain technology to improve global trade and finance by creating more secure and transparent transactions between different parties. The company aims to establish a platform that makes it easy for startups and businesses to transfer funds internationally without any trouble. This will benefit the financial industry by providing instant and real-time settlement through smart contracts.
Trade finance refers to financing global trade involving various actors such as exporters, importers, banks, insurers, customs, and carriers. However, this traditional market faces issues like reliance on paper-based processes with centralized trust and a $1.5 trillion financing gap. Blockchain companies are eager to provide a solution for this issue, with XinFin being a company that designs blockchain solutions tailored to the trade finance sector17.
What is XDC Network
XDC Network has a native token called XDC, which is used as a currency to settle transactions of dApps built on the XDC hybrid blockchain. The XinFin Delegated Proof-of-Stake consensus protocol 2.0 (XDPoS 2.0) sits at the heart of the XDC Network, ensuring that XDC nodes maintain a consistent and secure decentralized ledger (Blockchain) with high performance. It has an integrated wallet solution powered by an advanced XDC protocol, which makes cross-border transactions safe and secure in real-time18.
The network uses dPoS consensus, allowing for faster transactions and making it highly scalable. With its delegated PoS consensus, XDC Network achieves almost zero transaction fees and can process more than 2000 transactions per second. Additionally, the network is built on an advanced BFT consensus protocol, providing military-grade security and performance while using minimal resources. The upgrade is fully backward-compatible regarding APIs, and XDC coins can be staked natively.
XDC has many appealing features, including being an open-source blockchain with data privacy, enabling relay bridges to connect with other ecosystems, supporting instant block finality, and having an architecture allowing asset tokenization and smart contracts. Developers can also test their apps on the Apothem testnet before deploying them on the XDC Network19.
XinFin is the first-ever KYC-enabled blockchain network, which solves the security problem other blockchains like Ethereum face. They have a smart contract for KYC, where every validator needs to add their KYC document while staking XDC tokens. This KYC feature is more friendly to enterprises and regulators. The document will be visible on the public network and can be used to reveal the identity of a validator in case of any malicious behavior or double-spending attempt.
As of April 27, 2023, XDC is trading at 0.041, almost a 100% increase from its December low. However, compared to its peak market cap of $2.25 billion on August 21, 2021, XDC has experienced a significant dip, with the market cap currently sitting at $567 million.
XDC Network with tokenized trade
Digital transformation has dramatically improved various sectors, including digital payments. However, payment technology has also introduced risks to customer data. Tokenization blockchain combination is a reliable approach for protecting data in ecosystems, as it isolates data during digital payments. Additionally, blockchain tokens provide a digital way to show complete or shared ownership of anything valuable. They are mainly used for payments and transactions but can also represent multi-party ownership of indivisible things like art or music videos. Tokens make it easier to transfer ownership through a blockchain network20.
XDC Network aims to tokenize trade finance assets and connect them to the growing DeFi world. XinFin and Tradeteq completed the world’s first trade finance-based NFT transaction using a smart contract on the XDC Network. This digital token represents the value of off-chain assets and can generate yield for institutional investors, with plans to eventually offer similar opportunities to retail investors.
Boston Consulting Group (BCG) and digital exchange for private markets ADDX released a report in September 2022, stating that illiquid assets, including real estate and natural resources, could reach a tokenized total of $16.1 trillion by 203021. The report notes that on-chain asset tokenization, which surpassed $2.3 billion in 2021 and is expected to reach $5.6 billion by 2026, could solve the problem of asset illiquidity. The authors suggest that much of the world’s wealth is locked in illiquid assets due to limited affordability for mass investors, lack of expertise, and regulatory hurdles. By 2030, the report forecasts that the opportunity for on-chain asset tokenization could reach $16.1 trillion, mainly in financial assets, home equity, infrastructure projects, car fleets, and patents. The report also notes that the global digital asset daily trading volume has increased from 30 billion euros in 2020 to 150 billion euros in 2022, indicating the vast potential of illiquid tokenizable assets worldwide.
Additionally, NFTs can turn intangible assets, such as brand loyalty, celebrity time, and shared missions, into tangible holdings by creating a composable, open standard help representing almost anything intangible. Implementing traditional solutions like establishing a market for intangible assets can be difficult and often yield unsuccessful outcomes. NFTs offer a solution by being unique, ownable, verifiable, transferable, and tradable, making them a tangible representation of any asset. NFTs make tokenizing and trading loyalty, skills, potential, and even anonymous personas possible, creating a market for previously inaccessible value. They are a fundamental concept in web3 and offer new opportunities for tokenization.
(XDC) XinFin Network Aims To Enterprise Adoption
Different types of assets represent the inputs for creating tokens with blockchain-based systems. But how can real-world assets be converted into tokens? To understand this, we must examine the technological foundations of implementing tokenization in blockchain, which largely depends on smart contracts or token contracts. These contracts are programs that verify business rules and transfer value between user wallets.
In 2023, the XDC Foundation aims to focus on three main goals: promoting enterprise adoption, creating awareness for various blockchain use cases, and strengthening developer resources through collaboration with the XDC Community. From early 2022 to late February 2023, the XDC Network experienced significant growth in wallets and volume and a large increase in smart-contract deployment.
According to research by SNS Insider, the smart contracts market is expected to exceed $1077.7 million by 2030 due to an increasing need for secure and transparent transactions. Therefore, Xinfin towards the right direction regarding upcoming needs, and its token have a lot of utility in achieving the financing gap in terms of tokenization
XDC Network Tokenomics
Tokenomics combines two words, “crypto” and “economic.” It refers to the factors that make a cryptocurrency valuable to investors, such as token supply, issuance, and utility. It’s essential to consider tokenomics when making investment decisions because projects with well-designed incentives to buy and hold tokens are more likely to succeed and attract new investors over time, leading to increased demand and higher prices. When launching a project, founders and developers must carefully consider the tokenomics of their native cryptocurrency to attract investment and ensure the project’s success22.
Tokenomics defines how a crypto token will be distributed and its utility that affects its demand, which ultimately impacts its price. Projects with the right incentives can experience a significant surge in value. Xinfi has all utilities in terms of attracting investors here, as mentioned below:
Staking: XDC is a delegated proof of stake mechanism, meaning they have specific criteria to stake in this network. Mostly, big organizations do this because approx. Ten million tokens are required for staking, which currently costs 0.4 million dollars. At this time, more than 2 billion tokens were staked in this network.
Yields: The XDC Network uses smart-contract technology to create a digital token representing the value of a package of off-chain assets. This token can generate yield for institutional investors, and in the future, it may offer similar opportunities to retail investors.
Token burns: XDC is a deflationary token, meaning its total supply continuously decreases due to token burns. When burned, tokens are sent to an unrecoverable wallet address, reducing the overall supply and increasing the remaining coins’ value. Currently, the network has burned over 4 billion tokens23.
Limited supply: As of April 2023, the circulating supply of XDC coins is almost 13.8 billion, which accounts for about 36.8% of the capped supply of 37.5 billion.
Token allocations and vesting periods: The 40% founder allotment has a yearly 3% unlocking or vesting schedule, which helps to control sell-off pressure.
Real-world use case: XinFin developed the XDC Network, a hybrid blockchain designed for enterprises. “XinFin” stands for “eXchange inFinite.”
In 2022 After FTX collapsed, US regulators were seriously concerned about the crypto regulations; therefore, SEC strictly took action on anonymous crypto projects. On 17 April 2023, they accused the US-based cryptocurrency trading platform Bittrex Inc. and its former CEO of violating US securities laws by running an unregistered exchange, broker-dealer, and clearing agency. Bittrex Global GmbH, a foreign affiliate of Bittrex, was also charged for not registering as a national securities exchange. The SEC alleges that Bittrex and its CEO advised their clients to remove certain statements that could raise questions from the SEC about whether the crypto assets offered on Bittrex were securities. The complaint seeks injunctive relief, disgorgement of profits, and civil penalties24.
Regulatory challenges and complexity in the crypto world are causing issues for developers. In the middle east, like Singapore, Bahrain, the UAE, and Saudia Arab, laws have been established allowing digitized on-chain alternatives to traditional trade-finance processes and instruments. In the US, there needs to be more precise regulation, and one area of concern is stablecoin regulation. On the other hand, European Parliament has approved comprehensive rules for cryptocurrency markets under the Markets in Crypto Assets (MiCA) regulation, which aims to protect investors and prevent financial crime and market manipulation. The law will take effect after formal approval by member states, making the EU the first primary jurisdiction to implement comprehensive crypto regulations. The rules will cover crypto assets not currently covered by existing financial services legislation and require crypto transactions to be traceable25.
Creating an efficient judiciary system to hold verifying nodes accountable and neutralize bad actors – regardless of the number of malicious nodes – will increase trust more than previous blockchain consensus mechanisms that cannot identify attackers. By developing forensic capabilities for popular BFT protocols and building a systematic approach to accountability and attributability in blockchains, new forensic tools can meet the unique needs of enterprises, making XDC a suitable network for enterprises and regulation.
Smart-contract platforms compete in three key areas: scalability, security, and decentralization. All three things are called blockchain trilemma, and the interesting point is the blockchain can’t give three things in one chain. Ethereum is toward the multichain future in which the Ethereum chain acts as the main chain, layer-2 protocols act as a scalability chain, the data availability layer act to provide data, and also a shading technique which is towards creating more cost, but let’s see what happens in the upcoming years for public blockchain future. On the other hand, XinFi DPos 2.0 is the fourth version of blockchains because it is less expensive but more scalable, has data privacy, and is easy to regulate because they have a KYC feature on the blockchain nodes system and is environment friendly.
XinFi network approaches trillions of dollars in tokenization opportunities with the help of the XDPoS protocol, which is a core focus of this general problem in the real world. The company first constructed enterprise issues because they knew hybrid blockchain would solve the global trade finance problems, which is brilliant. Keep moving, Xinfin.
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