On xDai Chain: the New Sidechain Striving to Be a ‘Stable’ Blockchain
October 18, 2018 by William Peaster
Proof of Authority innovators POA Network and Ethereum’s lead stablecoiners MakerDAO have teamed up on xDai Chain, a “USD-stable blockchain.” The blockchain, technically a sidechain, will allow users to use Maker’s Dai stablecoin for in-DApp payments and smart contract executions.
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xDai Chain Puts Dai Front and Center
Developed via a partnership between POA Network and MakerDAO, the xDai Chain sidechain will use Dai as its native currency, an unprecedented dynamic for a stablecoin in the cryptocurrency ecosystem.
We are excited to announce that POA Network has partnered up with @MakerDAO to launch xDai Chain! This new chain will use xDai – a representation of Dai – as its native token, creating the first ever USD stable blockchain!https://t.co/GIxho1zPfw
— POA Network (@poanetwork) October 18, 2018
As the POA Network team clarified in their announcement post, the collaboration will bring new efficiency and flexibility to Dai, with gas costs now capable of being pegged in dollar terms accordingly:
“On xDai Chain, the native coin will be referred to as XDAI, resulting in transaction fees being fixed in Dai, or USD effectively. This new blockchain will leverage POA Network’s technology allowing it to be fast, scalable, and cost-efficient. A five second block generation time will result in transaction speeds of 60 tx/s. With gas costs as low as 1 Gwei per transaction, 500 transactions on the xDai chain will cost less than 1 cent.”
MakerDAO co-founder and chief operating officer Rune Christensen said the partnership provided an opportunity for Dai’s horizons to be expanded and pushed toward improved user experience (UX).
“xDai Chain creates an awesome opportunity for developers to launch DApps with Dai as the medium of exchange,” Christensen noted.
The collaboration also signals another early step forward toward blockchain interoperability, insofar as the Proof of Authority-underpinned xDai sidechain is built on Ethereum and represents the Dai token off its main-chain, suggesting the open possibilities of linking chains together.
Several Recent Developments in Stablecoin Space
For their part, MakerDAO has seen its profile rise considerably in 2018. That profile rose enough for the crypto arm of venture firm Andreessen Horowitz to buy up 6 percent of the total supply of Maker’s proprietary governance token, MKR, in September.
Beyond that, the stablecoin arena has experienced a flurry of developments as of late.
For one, there’s been a recent evolution in the ideas around crypto pegs. For that, look no further than Tiberius, a play that announced earlier this month it’s looking to create a “basketcoin” that is pegged to seven metals.
Also this October came the news that bitcoin payment processor BitPay would start allowing settlements to two stablecoins, Gemini Dollars and USD Coin.
And now the Japanese yen is set to get its own crypto-peg, after the Japanese conglomerate GMO Internet declared just days ago it would be releasing a yen-pegged stablecoin in 2019. Look for similar expansions and advancements to continue for the foreseeable future in the stablecoin niche of the cryptoverse.
What’s your take? Do you think xDai Chain portends similar link-ups to come in the space? Let us know in the comments section below.
Images via Pixabay
