What is XL1 (XL1)?

Preface

(Source: OfficialXYO)

As Web3 and data-driven technologies rapidly converge, XL1—the core token of the XYO Layer One blockchain—has become essential. XL1 not only powers daily transactions and smart contracts within the ecosystem, but also serves as a critical bridge between the digital and physical realms. With a blockchain architecture purpose-built for data, XL1 enables scalable and efficient verification and utilization of ever-growing data requirements.

XYO Layer One: Blockchain Designed for Data

Conventional blockchains often suffer from blockchain bloat when managing large data volumes—nodes are required to store all historical information, driving up operational costs, slowing synchronization, and degrading network performance. XYO Layer One, the foundation for XL1, places data at the core and delivers targeted solutions:

• Modular Architecture & Sovereign Chains: Enables custom applications to launch independent blockchains with full data ownership, supporting enterprise autonomy while maintaining network flexibility.
• Data Rollups & Bound Witness Trees: Compresses data and reduces node workload, while providing comprehensive, auditable data proofs.
• Permanent Data Storage: Uses cryptography to record off-chain data hashes, guaranteeing integrity and immutability.
• Multi-Chain Interoperability: Integrates data from Web2 and Web3 environments, establishing a trusted cross-platform network.

These features equip XYO Layer One to deliver reliable, verifiable infrastructure for AI training, IoT devices, supply chain management, and real-world asset (RWA) tokenization.

DePIN and the COIN App

XL1 is deeply woven into the XYO ecosystem. At the heart of XYO’s philosophy is empowering everyday users through Decentralized Physical Infrastructure Networks (DePIN). The COIN App allows anyone to turn their smartphone into a data node, collecting real-world information and earning rewards. This approach lowers the barrier for decentralized infrastructure and shifts global data supply into the hands of users:

• Over 10 million installs worldwide
• More than 5 billion XYO tokens distributed in total

COIN App allows everyday users to join the global data economy at minimal cost, while driving demand for XL1 utility and forming a robust circular ecosystem.

Fuel for Ecosystem Operations

XL1 is a utility token for XYO Layer One, powering daily network functions:

• Paying transaction fees (gas fees)
• Supporting smart contract execution and DApps
• Incentivizing node participation and data validation
• Enabling high-frequency, low-cost network interactions

Unlike the governance and security focus of the XYO token, the team engineered XL1 for on-chain liquidity and operational throughput. It features moderate inflation (approx. 0.7% annual rate) along with a transaction burn mechanism to counterbalance inflation, helping sustain supply-demand equilibrium and supporting high-volume applications.

Dual-Token Model: Design Principles

XYO Layer One adopts a dual-token structure, each serving distinct roles:

• XYO Token: Deflationary, used for network staking and security, delivering long-term value stability, trust, and decentralization.
• XL1 Token: Utility-focused, fueling on-chain daily operations including smart contracts, transactions, and node rewards.

This layered approach ensures XYO ecosystem stability over time while providing agile support for daily operational needs. Users can stake XYO tokens to earn XL1, creating a complete incentive cycle.

Tokenomics

The XL1–XYO dual-token system clarifies governance versus utility while enhancing network efficiency and economic equilibrium:

1. XL1 Supply & Consumption

• XL1 is the universal token, supporting transactions, smart contracts, and node rewards.
• The protocol burns portions of transaction and base fees to regulate token supply and preserve value.

2. XYO Staking & Security

• XYO is deflationary, used for staking and network integrity.
• Node participants who stake XYO earn XL1 rewards, encouraging active engagement.
• The protocol slashes XYO and permanently burns tokens in response to malicious node actions, safeguarding network honesty.

3. Incentive Loop & Sustainability

• Validators and decentralized nodes can choose to be rewarded in either XYO or XL1.
• Progressive rewards, slashing insurance, and burn mechanisms keep the network resilient and sustain long-term participation.

This economic model ensures XL1 remains highly functional within the ecosystem while supporting ongoing stability and value growth.

XL1 Use Cases

XL1 demonstrates utility in daily operations, supporting a range of data-intensive applications:

• Artificial Intelligence: Verifies training datasets and results, providing trusted data sources and preventing fraud.
• Real-world asset tokenization: Utilizes Proof of Origin and on-chain validation for authentic, reliable asset transactions.
• Supply Chain & Logistics: Tracks goods and device actions, produces auditable records, boosts efficiency, and minimizes disputes.
• Healthcare & Regulated Industries: Validates patient records and pharmaceutical supply chains with transparency and security.

Through these use cases, XL1 and XYO Layer One become the trusted data backbone for enterprises, developers, and users alike.

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Conclusion

XL1 is more than a cryptocurrency. It is the engine of XYO Layer One, the fuel powering decentralized physical infrastructure, and the bridge linking digital and physical realities. By leveraging a dual-token model, innovative chain architecture, and scalable data processing, XL1 delivers efficiency, sustainability, and trustworthiness to the Web3 ecosystem. For users and developers seeking to join decentralized data markets, XL1 offers a stable, flexible operational environment and advances global adoption of trusted data applications.