xDai Chain (launched 2019) is an Ethereum sidechain designed for stable payments, fast and inexpensive transactions. The protocol is powered by two tokens xDai and STAKE. xDai is used for transactions, payments, and fees, and STAKE is used to support the Proof-of-Stake consensus. ^[1]

xDai Chain was developed by the cybersecurity company xDAI in 2018.

The company is situated in San Francisco Bay Area, Silicon Valley, West Coast, United States.^[5]

xDai Chain was developed as a sidechain which is compatible with Ethereum blockchain and having main features like 5-second block time (compared to 10-20 Sec of ETH) and low gas prices and a native token called xDai. It was developed through a partnership between POA Network and MakerDAO. It uses Proof of Autonomy consensus which resembles Proof-of-Authority, but in Proof of Autonomy, validators are managed by a decentralized autonomous organization (DAO) instead of a centralized authority.^[6][39][40]

Stable and predictable currencies allow buyers and sellers to exchange value without the risks of volatility.

In the xDai Stable Chain implementation, transactions are conducted using xDai, a stable coin with 1:1 value ratio to Dai.

Because transactions occur on a bridged sidechain, they are fast and inexpensive.

In addition, transactions and fees are paid with a single coin.^[7]

xDai Chain provides users the ability to transfer stable value free of speculative concerns, volatility, or FUD. When DAI is bridged to xDai, it moves to a platform with a transparent purpose; secure and stable transactions on a fast, neutral network. Open governance, open access, and token stability create a trusted environment for users as well as applications built on top of xDai.

Using a RANDAO-based random number generator, validators on xDai produce random numbers used for validator selection. These random seeds are also available for usage by smart contracts deployed to xDai.^[7]

To move to a permissionless structure, the xDai Stable Chain adopted a Delegated-Proof-Of-Stake (DPOS) consensus mechanism which is implemented in Solidity.^[7]

The STAKE token is used by validators and delegators to secure the xDai Chain.

Users will have the opportunity to participate in chain consensus, either as validators running xDai nodes, or delegators placing a stake on those nodes.

While participants place STAKE to secure the chain, they receive rewards in both STAKE and xDai due to unique reward mechanics.

Additional side chains also have the opportunity to secure their chains making it multi-chain staking token.^[7]

Two bridges connect the xDai Stable Chain to the Ethereum blockchain, supporting seamless two-way asset transfer between chains.

Tokens are acquired on the mainnet, then bridged to the xDai Stable Chain sidechain using either the Dai-xDai bridge for transactional tokens or the DPOS bridge for staking tokens.

Once a user is finished transacting or staking, tokens can be bridged back to the mainnet with ease.^[7]

xDai Chain follows Dual Token Model, namely xDai and STAKE.

Native token xDai is used for stable transactions and STAKE is used for protocol protection.^[8]

xDai, the native stablecoin is pegged 1-1 to Dai on Ethereum and indirectly to the United States dollar. So its value always remains stable at ~ $1 US Dollar per xDai. It allows users to predict fees (gas) and conduct transactions where prices will not fluctuate by large margins. ^[28] xDai has the following features:

To create incentives for validators though token emissions, xDAI Chain uses STAKE.

It is a new ERC20-type (implemented as an ERC677) staking token whose price is determined by the market.

It is governed using permissionless delegated proof-of-stake based consensus .

To provide block rewards, STAKE locked in the protocol accrues a 15% Annual Percentage Rate.

The block reward provides incentives for Validators and Delegators to continue staking.

Additional rewards are also provided through separate mechanisms.

^[10][11]

3rd party projects/Dapps deployed on xDai include:

xDai raised $500,000 in seed funding from a string of leading crypto funds.

The seed round was led by B-Tech, the investment arm of BitMax.io and Focus Labs together with blockchain VC firms Bixin Invest and NGC.^[3][4]

On August 17, 2020, xDai team announced that they partnered with Amazon Web Services (AWS) to show how easy it is to create custom ERC20 tokens using BurnerFactory on the xDai Chain and spin up a node on AWS.^[50][51][52]

Founder Igor Barinov has been involved with Ethereum-based projects for quite a long time. He founded POA Network, which surrounds EVM (Ethereum Virtual Machine) blockchain as well as product, development for the entire Ethereum ecosystem. He is a tech and operations lead at xDai.^[45]