XDC Network Milestone: 5 Years Advancing RWA Tokenization

How XDC has proved itself a pioneer in the RWA movement and beyond

9 min readJun 3, 2024

Saturday, June 1, marked five years since XinFin Fintech (XinFin) launched the XDC Network mainnet — a blockchain specifically developed to support trade finance and the tokenization of real world assets (RWAs).

Since then, the entire blockchain industry has become intensely focused on bringing RWAs on chain, affirming what the XinFin founders knew five years ago — blockchain’s promise lies in digitizing finance and revolutionizing legacy financial processes through tokenization.

Tokenization

Tokenization is a choice. Organizations and enterprises are only willing to make that choice with proof that blockchain can reduce finance’s inefficiencies. In a Coindesk article focusing on the “tokenization boom,” Nils Behling, COO of Tradeteq, a company building on XDC, was quoted calling trade finance “the last frontier in finance.”

Coindesk referred to trade finance as the “arcane world of invoices and receivables” and reported that “companies like Tradeteq are working to tokenize these invoices, which brings more liquidity to the market, gives more borrowing options for small businesses, and provides yet another asset class for investors.”

At XDC Foundation, we believe trade finance is the industry most ripe for blockchain transformation. Behling agrees. He thinks the trade finance market alone is worth over $1 trillion.

Like other businesses, his company is quickly learning that tokenization can address inefficiencies inherent in traditional origination and distribution while increasing access to a traditionally inaccessible asset class.

Over the years, XDC Network has remained the destination for this type of financial innovation, validating XinFin’s initial vision. However, many milestones have occurred along the way, eroding our long-standing expectations of how finance operates and paving the way for true transformation.

Year 1

In year one of the XDC Network, XinFin worked to prepare the blockchain for enterprise usage, establishing proof points that showcased how the network can be utilized to streamline legacy financial processes while simultaneously creating on-ramps for community usage and broad, decentralized participation.

Year 2

During year two, the network found its real foothold in trade finance. It became, and remains, the first and only Layer 1 blockchain to join the International Trade and Forfaiting Association (IFTA). To further support the enterprise use case, the network began working on a bridge to R3’s Corda Network that would start many stages of interoperability within the blockchain industry. This work culminated in the recently completed proof of concept with SBI Group that saw multi-company instant settlement trade transactions across two separate digital ledger technologies — XDC Network and R3 Corda.

Year 3

In year three, the XDC Foundation was established as an independent organization to encourage development within the XDC ecosystem and foster awareness of the XDC Network as a blockchain technology solution.

Furthermore, the XDC Network became the first Layer 1 blockchain — and only, to date — selected as a member of the Trade Finance Distribution Initiative (TFDi), a consortium of trade originators, credit issuers, and institutional funders. A few months later, the network joined the DNI Initiative, an ITFA project to promote the digitization of negotiable instruments in trade finance. At this point, the network was (and still is) firmly positioned within the trade finance industry as the leading blockchain provider.

Year 4

Building on year three’s developments and affiliations, year four brought the world’s first trade finance-based NFT — which featured the tokenization of off-chain real-world trade finance assets in a single token — to the XDC Network. Following this, the trade finance security token, TRADA, launched on the network as an innovation in security token offerings or STOs — a type of RWA tokenization. World Economic Forum member and private credit marketplace Tradeteq orchestrated both transactions and declared the XDC Network their blockchain of choice.

Year four saw steeper increases in network adoption, a broader community commitment to the XDC Network, and deeper patterns of RWA tokenization, particularly in trade finance.

A group of XDC Foundation members and community contributors founded XDC Community to promote further network decentralization. Since then, alongside XDC Foundation, XDC Community has conducted multiple successful hackathons, grant programs, and workshops through various portals like Discord and XDC.dev and on-site events such as ETHDenver and ETHToronto.

Notably, Japan’s SBI Group (SBI) announced its commitment to the XDC Network. Through its subsidiary, SBI VC Trade, SBI partnered with TradeFinex, became a supporter of XDC Network in Japan, and now offers diverse XDC-related opportunities to its customer base. This relationship with SBI VC Trade and TradeFinex brings the XDC Network’s innovative use cases to the Asia-Pacific region, focusing on trade finance and cross-border payments. As noted below, year five saw further expansion of the SBI-XDC collaboration.

Year 5

Recently, the TradeFinex launch has proven to be a significant milestone in the trade finance sector. It established a marketplace for tokenized assets that showcases invoice receivables, letters of credit, guarantees, and electronic bills of lading (eBL). TradeFinex has a firm footing as a global trade finance asset platform.

Also, the network saw an all-time high in social engagements and expanded its community through various educational seminars, meet-and-greet events, and participation in major crypto and fintech conferences. The XDC community is one of the strongest in crypto, with consistently high rankings on Lunar Crush for social media engagement.

Another community initiative has been the establishment of DAOFIN (now called XDCDAO), which will further democratize XDC Network’s governance process. From its earliest days, the network’s co-founders have committed to a decentralized autonomous organization (DAO) as part of its long-term sustainability.

Other year four initiatives included:

TradeTrust integration — the Singapore IMDA platform for connecting governments and businesses
XDC Trade Network — the MLETR compliance and interoperability platform for trade documents
XDC The Stream — the XDC Foundation podcast for broad blockchain conversations
XDC.org — the home of Success Depends on Your Network and all things XDC Network

Year five saw further increases in developer growth on XDC Network and included major integrations, notably:

Securitize — the pioneer in digitization of private market securities on the blockchain. XDC Network remains one of only four blockchains integrated onto the BlackRock-backed platform.

Securitize is also proud to announce our support for the XDC Network blockchain, which joins Avalanche and Polygon as a blockchain of choice for the digitization of new and traditional financial products.
— Securitize Co-founder and President Jamie Finn

$USTY — a tokenized RWA that gives accredited investors access to a BlackRock-managed U.S. Treasury yield fund — was issued by Yieldteq and tokenized by digital asset leader Securitize on the XDC Network.

Other integrations included:

Ankr — an extensive network of RPCs and APIs for blockchain functionality and interoperability.
Elliptic — a compliance and analytics platform, with a focus on risk management.
Coins.ph — a remittance hub and the most established crypto platform in the Philippines with 16M+ users.
Blockdaemon — a leading institutional blockchain infrastructure provider.

These integrations ensure the XDC Network remains in the top tier of enterprise blockchains and maintains its premier position for RWA tokenization. XDC Network is positioned to support a suite of RWA products that will make trade finance assets widely accessible to capital markets while enabling finance-starved MSMEs to access the financing they need.

In December 2023, the SBI VC Trade collaboration expanded with the establishment of SBI XDC Network APAC, which aims to streamline global trade in the Asia-Pacific region through smart contracts and RWA tokenization on the network. This relationship between SBI VC Trade and TradeFinex brings the XDC Network’s innovative use cases to this region, focusing on trade finance and cross-border payments.

The U.K. enacted the Electronic Trade Documents Act (ETDA) through royal assent in July 2023.

This landmark regulatory milestone, which occurred during XDC Network’s fifth year, established that electronic trade documents can be utilized in place of paper documents, which have been the standard for hundreds of years. With 80% of global trade founded on British law, ETDA reduces transaction times from weeks or months to minutes and provides a crucial mechanism for large-scale tokenization of trade finance assets.

The XDC Network is increasingly hosting prominent RWA tokenization projects. As mentioned, Yieldteq’s aforementioned USTY token tracks a BlackRock U.S. Treasury bond fund and positions XDC as a top-five network in market capitalization of tokenized U.S. Treasury bonds, according to RWA.xyz. USTY presents a long-term use case as a conservative financial instrument within XDC’s burgeoning on-chain economy and is an essential bridge to traditional finance.

In year 5, improvements to XDC Network’s DPoS protocol were also underway. Developed by Princeton University’s Dr. Pramod Viswanath, Hash Laboratories’ Fisher Yu, and their team, XDC 2.0 comes along with the rollout of an institutional-grade subnet system on XDC — a compelling solution for organizations that need to maintain a certain level of privacy for their transactions while benefiting from everything the XDC public mainnet provides.

The XDC 2.0 mainnet protocol upgrade brings exceptional security, improved performance, and resource efficiency to this Layer 1 blockchain through a Byzantine fault tolerance consensus mechanism where malicious attackers are immediately recognized and slashed.

Year five closed out with the completion of the official CertiK XDC 2.0 audit. The network is currently preparing for the Ethereum Virtual Machine (EVM) upgrade, which will enable support for Solidity smart contract programming language version 0.8.23. This crucial update will align the XDC Network with the latest Ethereum developments, incorporating new features and security improvements.

With a steady five years of mainnet efficiency, the XDC Network is poised as a destination for RWA innovation.

According to XinFin, since its launch in 2019, the XDC Network has seen strong and steady growth in key measurement areas:

Nodes: 426 (+66 last year)
Accounts: 1.6 M (+777k last year)
Blocks: 75.3M (+13.5M mined last year)
Smart Contracts: 16k (+3000 deployed last year)
Transactions: 563.9M (+149.47M last year)

Look for revolutionary tokenization projects that will firmly establish the next generation of tokenized assets — a generation that can now feature:

Yield payments in non-volatile stablecoins, regardless of the underlying RWA;
New value moving on-chain through user-friendly dashboards and KYC processes;
Compliant profit-sharing processes

The future is on-chain economies. Through innovative solutions, value can move onto blockchain and stay there as organizations use their yield payments to fund ongoing business activities.

The entire industry is talking about real world assets and tokenization, realizing what the founders of the XDC Network realized over five years ago — we don’t need to create problems for blockchain to solve.

Today, we have much to celebrate due mainly to the contributions of the global XDC community — each and every one of you has made an impact. And we thank you. After all, a network thrives not just through the merits of the underlying technology but also by way of the network on the network.

It is through the contributions of those building on and leveraging the blockchain, making it a channel for innovation and exchange, that ensures the motto “Success depends on your network” holds true. #WeAreXDC