XDai crypto coin is a US dollar-pegged stablecoin in the Gnosis Chain ecosystem and is a derivative of DAI, another cryptocurrency on the Ethereum blockchain.
It is used to process different crypto operations such as buying, selling, sending and receiving this crypto, as well as for staking and maintenance purposes of the Gnosis Chain network. Keep reading and learn more about XDai crypto coin.
What is XDai crypto?
XDai crypto coin was created as the world’s first stable dollar blockchain and was launched in October 2018. It is designed for fast, anonymous and low-cost transactional payments with a fixed fee.
It has a dual token model using a stablecoin called xDai for transactional payments and a second token called STAKE for consensus based on a new delegated Proof-of-Stake (PoS) consensus model called PoSDAO, which is implemented by DAO.
XDai is designed to be a more affordable and user-friendly alternative to Ethereum. It uses a digital currency called “xDai” which has a fixed value of 1:1 with the US dollar (USD). This means that xDai is a stablecoin, which makes it a popular choice for commercial transactions and everyday payments.
The XDai network has been used to host a variety of decentralized applications, including games, voting systems, marketplaces, and more. The XDai community is made up of developers, cryptocurrency enthusiasts and blockchain technology advocates who are working together to create a robust and sustainable ecosystem for decentralized applications.
How does XDai crypto coin work?
XDai runs on the Ethereum sidechain (the Gnosis blockchain). Standard ERC-20 DAI tokens become stablecoins on the xDai blockchain. They can be returned to the Ethereum blockchain at any time. XDai uses the TokenBridge smart contract to create tokens. This technology is called cross-chain bridging. The exchange from DAI to xDai looks like this:
- The user sends a DAI to the TokenBridge smart contract address;
- TokenBridge blocks the DAI on the Ethereum blockchain and creates the same amount of xDai;
- TokenBridge sends the xDai to the user’s Ethereum wallet.
As with all stablecoins, xDai can be used in different ways. For example, you can easily send this coin from one wallet to another or receive this cryptocurrency in your wallet. Also, you can store this token in your wallet without worrying about your rate dropping as it is a well-known practice with highly volatile currencies such as Bitcoin (BTC), Litecoin, (LTC), etc.
Pros and cons of using xDai
Like every cryptocurrency, xDai has its strengths and weaknesses. But, let’s first consider the beneficial sides of the token.
Advantages of xDai:
- Stable payment environment. You only need a single currency for transactions and gas fees. Stable payments for both buyers and sellers.
- Accurate cost planning. Projects can plan for operating costs. Similar to AWS and other pay-per-use models.
- Application expansion. Resource-intensive operations are optimized in xDai. DAO voting, NFT mining, smart contract interaction.
- Project development and support. A rich ecosystem of tools and apps for developers and users.
- Green chain. Extremely small carbon footprint, less than ETH 2.0.
Disadvantages of xDai:
- The complex process of obtaining xDai. The complexity lies in additional efforts – why users must first buy DAI and convert that crypto into xDai token.
XDai Faucet crypto
XDAI Faucet is a service which provides free XDAI tokens for users who want to experience the XDAI network. The XDAI network is a parallel network to the Ethereum network, which uses a stablecoin called XDAI instead of Ether. This network is designed to offer faster and cheaper transactions compared to the Ethereum network.
The XDAI Faucet allows users to request a small amount of XDAI tokens, which are sent to their wallet. These tokens can be used to pay transaction fees on the XDAI network or to try XDAI-based decentralized applications (dApps).
It is important to note that the XDAI Faucet has a daily limit for distributing tokens, and may also impose usage restrictions to prevent abuse of the system. Therefore, users may need to wait a while before getting their free XDAI tokens.
What is xDai Bridge?
xDai Bridge is a cryptocurrency bridge that allows token transfers between the Ethereum network and the xDai network. The Ethereum network is known for its high security and large number of developers, but transactions on the network can be expensive and slow due to high network congestion. On the other hand, the xDai network is a low-cost and high-speed sidechain network based on Ethereum.
The xDai Bridge allows users to transfer ERC-20 tokens (i.e. Ethereum-based tokens) from the Ethereum network to the xDai network and vice versa. Users can transfer their tokens using the bridge and take advantage of the speed and low costs of the xDai network, which is ideal for decentralized applications and everyday transactions. The bridge is managed by POA Network, a company that develops blockchain-based solutions for businesses and governments.
XDai Token
XDai crypto coin is a criptomoeda native stable, allows users to predict rates and perform transactions where prices do not fluctuate by a large margin. This is ideal for everyday payments.
To create incentives for validators by issuing tokens, the xDai network uses STAKE whose price is determined by the market. While this token is subject to volatility, it is not a transaction-based asset. Like other tokens, the price is determined by supply and demand in the Ethereum ecosystem.
Is XDai crypto coin safe?
To properly answer this question, it is worth pointing out that every blockchain, as well as any stablecoin, can include risk. However, the xDai stablecoin has proven its reliability in the market and among many users. The first hint that this token is safe is the fact that it belongs to the stablecoin group. It is pegged to the US dollar and maintains a 1:1 ratio.
Second, the stablecoin implements the STAKE stacking token, which is multi-threadable and is used by multiple validators to ensure the chain is secure. regular. This means that chain owners want to make the chain and its token as secure as possible.
Final Thought
O x Come on, a young project, stands out for being essentially a Lightning Network analogue for Ethereum, featuring a native stackable coin called xDai, which offers users the possibility to earn money by stacking their tokens.
The platform’s differential lies in its proprietary blockchain, which allows for fast transactions and with notably lower fees compared to other blockchains. In this sense, network users pay for their transactions in xDai, and not in Ethereum, which provides greater convenience and savings.
