Xyo has now announced its network transfer from the Ethereum-based layer 2 chain to its own purpose developed layer 1 blockchain. The move marks a determination of evolution for a protocol that has been depicted before the term even in the Crypto Lexicon.
The new launched Xyo layer one (xl1). This strategic shift also introduces a dual-token architecture, pairing the Legacy Deflationary Xyo token with a new inflationary asset, XL1, optimized for high-frequency blockchain operations.
From Ethereum to XL1: Why the move?
Established in 2018, Xyo became one of the first large-scale implementation of a depin network, designed to verify real-world data with more than 8 million nodes already. It pants down mechanisms such as proof of location and proof of origin, and launches the app widely used coin to incentive participation from outside most native natives-more than 80% of its user base today is not native crypto.
But Ethereum’s scalability limitations, even on layer 2 networks, eventually proved to be a bottleneck.
“Having developed a blockchain for many years, I have seen right where the current systems are falling,” said Arie Touw, Xyo co-founder and CEO of XY Labs. “The community is ready for a system that can handle the same high volume of data and maintain real decentralization.”
XL1 was built to meet requests. It supports multichein’s capabilities while introducing an innovative consensus mechanism called proof of perfect. Instead of relying on heavy resources techniques, the proof of perfect allows decentralized nodes to choose the most “perfect” tip of the cadena-determined by the effectiveness, shrinkage, and alignment of the protocol-without processing the entire chain history. This design promises a quick end and measurable consensus suitable for applications with intensive data intensive data.
The performance -driven architecture for data and AI
Unlike traditional blockchains where nodes should store and process the entire history history, XL1 windowing begins with windowing. The drastically trims that actively storing requirements by adhesion of the memory of each node to recent blocks. Older data are archived but still accessible, creating a slender and faster network without compromising data integrity.
This architecture is a boon for applications throughout the AI, DEPIN, and RWA vertical where latency and computational costs often limit factors. Early discussions with prospective data driven data are already underway, the developer’s interest sign on a lightweight but high-performance blockchain infrastructure.
Management meets utility: a dual-token system
Xyo’s move to its own chain of layer 1 also indicates a move to tokenomics. While Xyo’s original token will maintain management, precaution, and long-term function of appreciation of value, a new inflationary-XL1 token-has been introduced as the fuel operation of the new blockchain.
Where Xyo provides protocol alignment and security, XL1 will handle the network’s daily transactional needs. It will be used to pay for gas, conduct smart contracts, and pay validators and efficiency nodes. Importantly, the XL1 develops through the Xyo tokens, thus locking a large portion of the Xyo supply and strengthening its relevance to the long-term management of layer 1.
The dual-token system allows Xyo to decompose high-throughput operational requests from management. This is a clear separation of concerns that optimize the network for both size and maintenance.
The mirrors of the emerging blockchain architectural trends in which base-layer and transactional throughput management are increasingly separated to enhance network design-seen in ecosystems such as cosmos and polkadot, though in Xyo’s unique twist tied to the world’s real data.
Regulated and prepared: a plot dedicated to compliance
Xyo is not a stranger to regulation milestones. This parent of firm Xy Labs, is the first US crypto company to receive the SEC approval for a regulation that offers, enabling both accredited and non-accredited investors to participate. Additionally, it was among the first to token and list its shares, which now trade under the Xylb symbol in Tzero ATS, a system of alternative registered Finra.
This regulation positions Xyo and XL1 as compelling infrastructure for RWA initiatives where compliance and monitoring cannot communicate. As tokenized assets-which came from real estate to the provision of chain-gain traction data in 2025, networks such as XL1 may appear as critical middleware for safe, compliant, and transfer data asset.
What does this mean for AI’s wider depin and ecosystem
Xyo’s move came to an important moment for decentralized physical space on infrastructure. While AI models are increasingly dependent on real-world data sources and physical verification for training, depin platforms draw the institutional attention. However, many existing chains remain unsuitable for the throughput and latency that such applications require.
By pioneering proof of perfect and optimization of storage through Windows Windows, the Xyo layer is a position itself as a layer of infrastructure capable of supporting the next Gen decentralized network. Including a tokenomic model in line with managing performance incentives, the platform offers a blueprint for data-driven ecosystems requesting both size and integrity.
Also Read: Xyo launches Native OS, which has democracy of a Sovereign Internet
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Image credits: Xyo