XDC Network

What is XDC Network?

XDC Network is an EVM-compatible Layer 1 blockchain positioned as “hybrid finance” infrastructure for trade, payments, and real-world asset workflows, attempting to bridge enterprise requirements - identity, governance, and operational predictability - with a public-chain settlement layer.

Its core design premise is that many trade-finance and institutional use cases fail not because blockchains cannot clear transactions, but because production deployments need compliance-oriented controls and integrations that map to existing financial and enterprise rails; XDC addresses this via an enterprise-oriented validator model with KYC requirements for masternodes and a Delegated Proof-of-Stake family consensus called XDPoS described in the network’s own documentation and operator guides on the official XDC docs and masternode requirements.

In market-structure terms, XDC has generally operated as a niche Layer 1 rather than a general-purpose “dominance” chain, with its observable on-chain economy skewing toward stablecoins and RWA-style applications more than consumer DeFi. As of early February 2026, third-party aggregators such as CoinMarketCap place XDC around the low-70s by market-cap rank, while DeFi-focused data sources such as DeFiLlama’s XDC chain dashboard show relatively modest DeFi TVL alongside a stablecoin footprint that is large relative to its DeFi base, a pattern consistent with a network narrative oriented toward payments/settlement and tokenized finance rather than retail yield farms.

Who Founded XDC Network and When?

XDC Network emerged from the XinFin project, commonly described as founded by Atul Khekade and Ritesh Kakkad, with the network’s enterprise/trade-finance positioning developing alongside TradeFinex-related initiatives and institutional pilots. While different community and media sources emphasize different milestones, the project has publicly framed its mainnet history in multi-year terms, and ecosystem communications routinely link its early trajectory to trade digitization and structured finance workflows, including TradeFinex positioning itself as an ISO 20022-oriented protocol for trade finance distribution on TradeFinex’s site.

Over time, the narrative has arguably shifted from “hybrid blockchain for enterprise” as a broad category to a more specific claim: XDC as an institutional settlement and tokenization rail for trade instruments and RWAs, where integration work (custody, compliance analytics, standardized messaging, and interoperability) is treated as the product. That storyline is reinforced by ecosystem disclosures around compliance and institutional tooling, such as the network highlighting integrations and compliance posture in its own editorial hub at xdc.org, and by its participation in structured regulatory-alignment initiatives such as joining the MiCA Crypto Alliance.

How Does the XDC Network Network Work?

XDC is a single-base-layer blockchain running an Ethereum-style execution environment (EVM) but secured by an XDPoS consensus design that concentrates block production in a bounded validator set. In practice, XDC’s validator system uses masternodes (and standby nodes) with staking thresholds and operational requirements; the official documentation explicitly frames XDPoS as a PoS-derived mechanism optimized for throughput by relying on “semi-trusted entities,” and it foregrounds a “self-KYC” feature for validator operators in the protocol’s positioning on the XDPoS overview page and the node-operator docs.

Public technical discussions and repositories have also described a validator set size of 108 in steady-state configurations and the mechanics by which validators are selected and rewarded, as documented in the project’s own governance/engineering channels and the XDPoSChain repository issue.

Technically, the most salient recent change for protocol users and token economics is that XDC has been converging toward upstream Ethereum EVM feature parity. In January 2026 the network activated a major protocol upgrade branded “Cancun” (v2.6.8), described by the developer community as bringing Ethereum Cancun-equivalent EVM features and an EIP‑1559 style fee market to XDC mainnet, including a base-fee burn mechanism, along with other Cancun-era EIPs and modern Solidity compatibility, as outlined in the official developer writeups on xdc.dev and the follow-on technical recap of what went live on mainnet at block 98,800,200 on xdc.dev.

From a security operations lens, XDC also documents validator performance penalties and “slashing” style exclusion rules that remove underperforming operators from block production eligibility for multiple epochs in its slashing mechanism documentation.

What Are the Tokenomics of xdc?

XDC’s supply mechanics are best understood as a combination of a large, long-lived base supply with validator emissions and, as of the Cancun-era upgrade, an explicit burn component tied to gas fees. Public market data venues such as characterize XDC as having no explicit max supply field while reporting circulating and total supply figures that imply a sizable remaining non-circulating balance; this matters because token distribution and unlock governance can dominate marginal supply dynamics more than day-to-day transaction fees on networks where on-chain fee revenue is modest relative to fully diluted value.

On utility and value accrual, XDC is used as the native asset for transaction fees and as the staking collateral for validator security. The network’s on-chain fee model became more economically legible after the v2.6.8 upgrade introduced EIP‑1559-like mechanics - i.e., a dynamically adjusted base fee that is burned - explicitly described by XDC’s developer communications as a “base fee + burn mechanism” designed to improve fee predictability and reduce spam while creating potential deflationary pressure under sufficient usage. In parallel, staking demand is shaped by a high minimum stake for running a masternode in the official model, which tends to concentrate direct validator participation among larger entities, while liquid-staking wrappers aim to broaden participation; for example, PrimeStaking’s psXDC structure markets itself as a liquid representation of staked XDC and has been reported by the issuer and republishers as reaching multi-million-dollar TVL levels in mid‑2025.

Who Is Using XDC Network?

A recurring analytic challenge with XDC is separating speculative token turnover from the economic activity the chain claims to target, because many “enterprise” narratives manifest off-chain (institutional pilots, integrations, procurement) while public blockchains are easiest to measure via on-chain data. On-chain, XDCScan shows the network operating at high raw transaction counts historically, with explorer dashboards reporting totals approaching a billion lifetime transactions and granular daily flows available via its charts portal.

However, DeFi-centric usage appears comparatively small: as of early February 2026, DeFiLlama’s XDC chain dashboard shows DeFi TVL in the low tens of millions of dollars and DEX TVL/volume that is modest by L1 standards, implying that much of the chain’s activity may not be “DeFi TVL heavy” in the way Ethereum L2s or Solana are.

Where XDC does appear to have measurable specialization is in stablecoins and RWA-adjacent deployments. DeFiLlama’s chain dashboard reports stablecoin market cap on XDC materially exceeding its DeFi TVL, and its protocol categorization highlights RWA-style protocols on XDC with meaningful tracked “RWA value,” which is conceptually distinct from DeFi TVL . That said, RWA metrics can be methodology-sensitive, and some protocol TVL figures rely on protocol-reported accounting (for example, DeFiLlama’s methodology notes for specific XDC RWA protocols describe contract calls returning USD-pegged values), which makes independent validation and redemption assumptions a critical diligence step.

On institutional/enterprise adoption signals, XDC emphasizes integrations and pilots rather than mass retail apps. One concrete example in ecosystem publications is a proof-of-concept linking XDC Network settlement with R3’s Corda platform within the SBI group, framed as an inter-business settlement experiment between XDC and Corda. More broadly, the network has positioned itself as actively participating in regulatory-alignment initiatives, such as its formal membership in the MiCA Crypto Alliance, which - while not an approval - signals a strategic emphasis on compliance-facing readiness in the EU policy environment.

What Are the Risks and Challenges for XDC Network?

Regulatory exposure for XDC is less about a single visible enforcement event and more about the general uncertainty that applies to many liquid cryptoassets: whether a token is treated as a security in specific jurisdictions, whether its distribution and marketing history invites scrutiny, and whether its enterprise promises intersect with regulated activity (payments, settlement, tokenized instruments).

As of early February 2026, there is no widely-cited, protocol-defining public event such as a spot ETF approval or a marquee U.S. enforcement case that clearly settles XDC’s classification; instead, XDC’s strategy appears to be “compliance signaling” via initiatives like MiCA-oriented disclosures and alliance participation. Investors should treat those as process indicators, not as substitutes for formal regulatory clarity.

Centralization vectors are material. XDC’s design explicitly relies on a bounded validator set and KYC’d masternodes, which can improve operational predictability but weakens censorship-resistance relative to permissionless validator models; even XDC’s own documentation acknowledges the scalability tradeoff via reliance on “few semi-trusted entities” in XDPoS (XDPoS docs). This concentrates governance and liveness risk, and it can increase vulnerability to coordinated downtime, policy pressure, or correlated operational failures among validator operators, even if slashing and exclusion rules exist to enforce uptime.

Competition is also straightforward: XDC is effectively competing against Ethereum and its L2s for tokenization mindshare, against other “institutional L1s” that emphasize compliance and RWA issuance (and, increasingly, permissioned/permissioning features), and against non-crypto incumbents (bank consortia, private DLTs like Corda) that may offer better governance fit for certain regulated workflows. The core economic threat is that if real-world finance firms decide that tokenized instruments can live on Ethereum L2s, on private DLT, or on bank-managed permissioned rails, XDC’s niche could compress into a small set of use cases that do not generate durable fee burn or staking demand, limiting endogenous value capture even if the network is technically functional.

What Is the Future Outlook for XDC Network?

The near-term technical outlook is anchored by what has already been verified on-chain: the January 2026 v2.6.8 “Cancun” hard fork, which brought EIP‑1559 mechanics and Cancun-era EVM features to XDC mainnet, aligning the chain more closely with Ethereum’s modern tooling and smart-contract expectations.

That alignment matters because enterprise adoption frequently depends on developer familiarity, auditability, and wallet/infrastructure interoperability as much as raw TPS claims. The more structural question is whether XDC can convert “enterprise narratives” into measurable, sticky on-chain activity - either via stablecoin settlement volume, tokenized instrument issuance with real redemption/attestation credibility, or protocol fee generation that is large enough for EIP‑1559 burn to be economically relevant rather than cosmetic.

The principal hurdles are therefore less about shipping an EVM fork and more about distribution and credibility: building repeatable institutional integrations that survive procurement cycles, demonstrating that RWA and trade-finance use cases can scale beyond pilots without relying on heavy incentives, and sustaining a validator/governance structure that can satisfy compliance demands without becoming a point of capture. XDC’s approach - pairing public-chain settlement with compliance-oriented validator requirements and explicit engagement with policy frameworks like MiCA - could be viable, but it also places the network in a narrow corridor where it must simultaneously satisfy crypto-native expectations of neutrality and institutional expectations of control, reporting, and recourse.