As blockchains gain traction among individuals and institutions, we find ourselves witnessing the remarkable adoption of this nascent technology. Enter the XDC Network, which stands out with some of the most compelling use cases in the Web3 space. This article explores the innovative XDC subnets and the powerful governance framework of the XDC DAO.
Genfinity welcomed Lance Lilly, a key player at the XDC Foundation who immerses himself in a variety of projects and fosters partnerships within the XDC Network. During the livestream, XinFin’s leadership also joined us.
In the Dubai office, Wanwiset Peerapatanapokin, a skilled blockchain developer, focuses on an exciting project centered around the subnet, XDC’s innovative layer-two solution designed to enhance scalability through a private chain. Furthermore, Beny Mohammadkhani helps oversee XDC’s Decentralized Autonomous Organization (DAO), diligently managing governance matters to ensure transparency and collaboration.
Unveiling the Innovative World of XDC Subnets
Wanwiset, a skilled blockchain developer on the XDC network, enthusiastically spoke about his team’s innovative approach to XDC Subnets. He explained that while many solutions on the market offered similar concepts, XDC aimed to elevate security and efficiency beyond its competitors.
The first point of pride was what he referred to as the Sovereign-Rollup, which represented a significant advancement in subnet architecture. Wanwiset detailed how this innovative framework allowed him to run a separate blockchain parallel to the parent network, effectively creating a robust layer-two network.
In contrast to other solutions that merely utilized zero-knowledge proofs or rollup services, which he noted were not true blockchains, XDC’s subnet operated as a fully independent blockchain. This distinction was crucial, as it enabled the team to leverage the security of the parent chain through a mechanism they called the Checkpointing Smart Contract.
He further elaborated on the role of the relayer, a component responsible for managing this checkpointing process. Wanwiset described how the concept of checkpointing functioned by recording only the subnet’s block headers. Once these headers were checkpointed to the minute, they became immutable—no reversals or alterations could occur.
XinFin’s developer emphasized that this design ensured the integrity of the subnet blocks and also enhanced security beyond that of the parent chain. With the combined strengths of both the parent chain’s security and the inherent security of the subnet itself, it offered what could be described as a double layer of protection. In this way, the subnet approach stood as a transformative solution aimed at redefining security standards in blockchain technology.
Exploring the Sovereign-Rollup: Enhanced Control and Customizability for Institutions
We asked Wanwiset for clarification about the concept of the Sovereign-Rollup and how this arrangement might offer institutions greater control, flexibility, and ownership compared to traditional non-sovereign rollups.
Wanwiset excitedly described the potential of XDC subnets, revealing that they opened up a wealth of integration possibilities. He noted that each subnet operated fundamentally as another blockchain, allowing for the seamless utilization of EVM compatibility within the existing network. This meant that projects could be redeployed effortlessly, with many tools readily available for integration.
Furthermore, Wanwiset highlighted the focus on customizability, emphasizing that users could decide how many nodes they wanted. They could easily add or remove validators based on their needs, giving them control over who accessed their network. This level of flexibility sets XDC apart from its competitors, particularly when compared to traditional rollups or validator-based layer twos.
In addition, he pointed out that XDC offered superior interoperability, enhanced by its cross-chain framework. With a particular emphasis on privacy, he elaborated that only block headers would be stored, ensuring that the contents of transactions remained confidential. This characteristic made each subnet feel like a private blockchain, allowing users full sovereignty and ownership.
Wanwiset further elaborated on the smooth onboarding process for deploying a subnet. He mentioned a configuration generator tool, which enabled users to start their own subnet in just ten minutes. He confidently asserted that this streamlined approach involved a simple script and Docker-based deployment. Users merely needed to download the necessary files, run a few commands, input their configuration, and, in no time, they would have their own subnet up and running. This ease of use exemplified XDC’s commitment to providing a one-stop solution for blockchain development.
Unlocking XDC Subnets’ Integration Opportunities for Enterprises and Banking Institutions
Moving along in the interview, Genfinity probed further into the topic of interoperability, specifically regarding how enterprises and banking institutions could successfully integrate their XDC subnets and the main blockchain. They were interested in identifying the “easy wins” that would facilitate this crossover, particularly regarding data sharing and customizable auditability.
Additionally, we pointed out the need for enterprises to maintain levels of privacy while also exploring how certain elements, such as liquidity or informational exchange, might play a role in this transition. We sought to understand at what point these institutions would find it advantageous to connect their customized subnets to the public mainnet, reflecting a desire for clarity on the practicalities of this integration process.
The Future of XDC Subnets: Opportunities and Innovations in Blockchain Technology
Sharing his thoughtful insights on the evolving landscape of XDC subnets, Lance from the XDC Foundation acknowledged that the use of subnets would begin to develop organically as more users engaged with the technology. While the concept was new to XDC, it had existed in various forms elsewhere. As adoption increased, he anticipated a fresh wave of challenges and opportunities would emerge, prompting innovative solutions and novel use cases.
For instance, Lance imagined a scenario where XDC subnets could function as dedicated ledgers, particularly in the realm of securities. He explained that, even without blockchain, maintaining a ledger was essential for tracking such assets. In this context, a subnet could serve as a private ledger, allowing institutions or investors to validate information seamlessly. This capability would enable users to record transactions and monitor significant events efficiently.
Moreover, he foresaw potential applications in decentralized finance (DeFi), where the versatility of subnets could foster a variety of developments. With tools like XDC Zero and XDC Swap, users could swap assets between chains and validate data across networks. He believed that as more XDC subnets were deployed, creative and innovative ideas would naturally follow, enriching the ecosystem. Lance also pointed out that prior to the launch of XDC subnets on the mainnet, several entities were already preparing to deploy their own subnets. This proactive approach highlighted the enthusiasm surrounding the technology.
Overall, XDC Subnets offer institutions a valuable opportunity to experiment with blockchain without delving into the complexities of public cryptocurrencies. This feature provides a more comfortable and secure environment for entities concerned about regulatory and compliance issues using public mainnets and native tokens.
Lance’s Vision: Navigating Challenges and Opportunities
Lance reflected on the dynamic nature of the ecosystem and how subnets contributed to its growth. He noted that this development extended beyond merely building on the layer one itself. As new XDC subnets emerged, they simplified the process for individuals and organizations to deploy their own blockchains.
He pointed out a significant barrier many potential blockchain adopters faced: while they often had innovative ideas, financial resources, and strong teams skilled in business development and marketing, they frequently lacked technical expertise — the ability to deploy a blockchain easily changed this dynamic. Even those without extensive development teams could bring their visions to life with the right tools.
Furthermore, Lance emphasized that this capability at XDC represented an additional avenue for ecosystem expansion. As more subnets flourished and their user bases grew, the focus on their unique chains could also generate increased demand for the parent chain. This symbiotic relationship could lead to a robust ecosystem that benefits all participants.
The Evolution of Governance: The XDC DAO Framework
Beny Mohammadkhani spoke passionately about the XDC DAO, which served as the primary governance system for the XDC network. He noted that the concept of DAOs had been evolving within the blockchain space for over six years, with numerous projects setting benchmarks for both on-chain and off-chain governance. The idea for XDC DAO emerged in 2022 when the XDC team and several community members proposed an initial framework. This concept was later rebranded to XDC DAO, emphasizing a commitment to transparency and decentralization in governance mechanisms.
Moreover, Beny explained that XDC DAO comprised three distinct groups: the Masternode Senate, the Judiciary, and the People’s House. Each of these governance bodies played a vital role in the ecosystem. The masternodes were essential for securing the network, validating blocks, and facilitating overall blockchain progress. To become a validator, individuals must complete a KYC process and deposit 10 million XDC tokens into the system contracts, thus joining the masternode community.
Beny then shifted his focus to the Judiciary, which consisted of seasoned experts within the XDC ecosystem. These individuals had either direct experience with XDC projects or held influential roles within the community. Their primary responsibility involved observing and auditing activities and providing guidance and direction to the community.
In addition, he introduced the People’s House, which allowed any holder of a certain amount of XDC tokens to participate in governance. By depositing 10,000 XDC tokens into the XDC DAO platform, individuals could become members of the People’s House, gaining voting power based on a one-token, one-vote ratio. This structure aimed to distribute power across various stakeholders, ensuring that masternodes, judiciary experts, and community members all had a voice in decision-making.
The Role of Inclusivity and Participation in the XDC DAO
Beny emphasized that the governance process was community-driven, focusing on inclusivity. He highlighted the importance of community feedback and involvement, noting that XDC had always prioritized the opinions of its members. To facilitate this, the DAO operated on a voting period, typically occurring once a month for two weeks. During this time, community members could review proposals and cast their votes, shaping the future of the network.
Lastly, he explained the delegation mechanism for masternodes, which was in place for security purposes. Given that the XDC network operated on a Delegated Proof of Stake (DPoS) model, the masternode owner needed to propose a delegate address responsible for governance activities. This structure aimed to enhance security while ensuring active participation in the DAO.
The XDC DAO is a vibrant, community-focused governance system designed to adapt and grow alongside the XDC blockchain ecosystem.
The Future of Brand Engagement: Integrating DAOs and Governance in the Blockchain Landscape
We were curious about the potential integration of DAO and governance aspects within major brands as XDC engaged with consumers in the blockchain space. For example, Nike and Adidas have ventured into NFTs, so we sought Beny’s perspective on the impact of these initiatives on brand-consumer relationships.
XinFin’s blockchain engineer thoughtfully addressed the question regarding integrating DAOs with significant brands, highlighting the XDC DAO as a crucial component for community-driven decision-making. He emphasized that community engagement was central to blockchain success, as the strength and size of the community often determined a project’s viability. He envisioned a future where artificial intelligence, DAOs, and the Internet of Things (IoT) converged, allowing households to utilize local blockchains for managing smart devices securely.
Shaping Consumer Engagement and Global Inclusion
He further reflected on blockchain’s historical focus on assets and tokens, acknowledging that many users were initially motivated by financial gain. While the ecosystem was moving toward smoother user experiences, challenges remained for those unfamiliar with blockchain’s technicalities. Beny pointed out that DAOs could incentivize community participation, noting that users often engaged with new products driven by the prospect of earning rewards, such as through airdrops.
In conclusion, Beny highlighted the global nature of blockchain, which allowed individuals from various backgrounds to participate and earn incentives without the constraints of traditional financial systems. He speculated that brands might implement Know Your Customer (KYC) processes for DAO memberships. Still, he stressed that such decisions would depend on business needs. Ultimately, he conveyed an optimistic vision for the synergy between DAOs, major brands, and XDC subnets believing the technology could reshape consumer interactions in the blockchain space.
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