XEL: A High-Performance BlockDAG for Private, Instant, and Scalable Decentralized Transactions and Applications

What is XEL

Friends, imagine the internet we use every day—convenient, but often our personal information and actions are like being in a transparent glass house, visible to all. Blockchain technology is like building each of us a private and secure “little room.” The XELIS project (abbreviated as XEL) aims to build, on top of this “little room,” a “super smart house” that not only protects privacy, but also runs extremely fast and can handle all kinds of complex tasks.

Simply put, XELIS is a brand-new Layer-1 blockchain platform, like the foundation for building various decentralized applications (dApps). Its target users are those who want more privacy, faster transaction speeds, and the flexibility to develop all kinds of applications in the digital world.

Its core scenario is to provide a high-performance, high-privacy environment for transactions and applications. You can think of it as a “highway” in the digital world—this highway not only has many lanes (high scalability), fast traffic (high transaction speed), but every car comes with an “invisibility cloak” (privacy protection), and can transport all kinds of customized “cargo” (smart contracts).

A typical usage flow might include: you contribute your computer’s computing power (mining) to earn XEL tokens, then use these XEL tokens for transfers, or to pay fees for using various dApps on the XELIS network. In the future, you can even use your XEL tokens to participate in major decisions for the project, just like being a member of the “homeowners’ committee” of this “super smart house.”

Project Vision and Value Proposition

XELIS’s vision is to build a “utopia” in the digital world, where decentralized applications are no longer limited by the slow speed, high fees, and poor privacy of traditional blockchains. It hopes to break these bottlenecks, allowing developers to freely create powerful applications that also protect user privacy.

The core problem it aims to solve is the “blockchain trilemma” that plagues the industry: it’s hard to achieve decentralization, security, and scalability all at once. XELIS introduces some innovative technologies to find a better balance in this triangle, especially focusing on privacy protection and scalability.

Compared to similar projects, XELIS stands out by deeply integrating both speed and privacy. It doesn’t just provide basic transaction functions like some projects, nor does it focus solely on smart contracts like others; instead, it aims to offer high performance, strong privacy, and smart contract capabilities all on a unified base layer.

Technical Features

XELIS’s technical features are like the high-tech configurations of its “super smart house”:

BlockDAG Architecture

Traditional blockchains are like a one-way street, with blocks lining up one after another for confirmation. XELIS uses a BlockDAG (Directed Acyclic Graph) architecture, turning that one-way street into a multi-lane highway, with lots of on-ramps. This means multiple blocks can be created and confirmed simultaneously, greatly increasing transaction throughput and network capacity, while reducing “orphan blocks” (invalid blocks) caused by “traffic jams.”

Rust Language Development

XELIS is built from scratch using Rust. Rust is known for its memory safety and high performance—like building the “smart house” with the strongest, most efficient materials, ensuring system stability and operational efficiency.

Homomorphic Encryption (ElGamal)

This is a very cool “magic envelope” technology. Imagine putting money in an envelope and handing it to the bank. The bank can add or subtract money without opening the envelope (without seeing the actual amount). XELIS uses this homomorphic encryption (specifically the ElGamal system) to protect the privacy of transaction amounts and account balances. This means your transaction info and asset status are encrypted on the network, but the network can still verify transaction validity—achieving true privacy protection.

Zero-Knowledge Proofs

This is like “proof without revealing the secret.” For example, you want to prove to a friend that you’re of legal age, but don’t want to tell them your exact birthdate. Zero-knowledge proofs let you prove you’re an adult without revealing your birthdate. In XELIS, it’s used to verify the legitimacy of encrypted transactions without exposing their details, further enhancing privacy.

Smart Contracts and XELIS-VM

XELIS plans to support smart contracts in the future—like installing an automated “butler” system in the “smart house.” Developers can write and deploy their own dApps on XELIS. It will have its own virtual machine (XELIS-VM) and programming language (SILEX), giving developers more flexibility. This feature is expected to go live on mainnet on December 13, 2025.

Fair Proof-of-Work (PoW)

XELIS uses a unique PoW algorithm called xelis-hash, allowing ordinary CPUs and GPUs (central and graphics processors) to participate in mining. This means more regular people can become “smart house” maintainers, not just those with expensive specialized equipment, ensuring network decentralization and security.

Kalman Filter Difficulty Adjustment

This is an intelligent mining difficulty adjustment mechanism. Like a precise “weather forecaster,” it adjusts mining difficulty in real time and smoothly, preventing network congestion or attacks due to hash rate fluctuations, ensuring stable network operation.

Account Model

Unlike Bitcoin’s UTXO (Unspent Transaction Output) model, XELIS uses an account model, more like a bank account. This model is more flexible, enables true “fungibility” (every XEL token is identical, with no “history”), and supports “fast sync,” allowing new nodes to catch up with the network state more quickly.

P2P Encrypted Network

All communication between nodes in the XELIS network is encrypted, like nodes using encrypted walkie-talkies. This effectively prevents network traffic analysis, further enhancing user privacy and network security.

Fast Block Times

XELIS generates blocks about every 15 seconds, meaning transactions can be confirmed very quickly, improving user experience.

Tokenomics

XELIS’s token, XEL, is the “currency” and “energy” of the “super smart house.”

Token Basics

• Token Symbol: XEL
• Issuance Chain: XELIS Mainnet
• Max Supply: 18.4 million XEL. This is a fixed cap, meaning the total supply is limited, emphasizing scarcity.
• Current Circulating Supply: As of November 2025, about 4.2 million XEL are in circulation.

Issuance Mechanism & Inflation/Burn

XELIS uses a deflationary issuance model, with mining rewards decreasing dynamically, not in fixed “halving” cycles like Bitcoin. It’s like the “smart house’s” energy supply gradually and smoothly decreases over time, eventually reaching a stable state. In the future, part of the fees generated by smart contracts will also be burned, further reducing total supply and helping maintain long-term value.

Token Utility

• Network Security & Transactions: XEL is the “fuel” for the XELIS network. It’s used to pay transaction fees, like tolls on a highway.
• Mining Rewards: Miners maintain network security by contributing hash power and receive XEL as rewards—like wages for “smart house” maintenance staff.
• Smart Contract “Fuel”: In the future, when smart contracts go live, XEL will be the “gas fee” for executing them.
• Future Governance: XEL holders will have the chance to participate in the project’s DAO, voting and making decisions on the project’s direction—like having voting rights in the “smart house.”

Token Distribution & Unlocking

XEL is mainly distributed through mining, with a gradually adjusting treasury allocation mechanism:

• Initial Phase (about first 1.5 years): 90% of mining rewards go to miners, 10% to the project treasury for development and ecosystem building.
• Expansion Phase: Miners’ share increases to 95%, treasury share drops to 5%.
• Self-Sustaining Phase: Eventually, the treasury share is eliminated, and 100% of mining rewards go to miners, meaning the project will rely entirely on the community and ecosystem for development.

Team, Governance & Funding

Team

XELIS is an open-source project, meaning its code is public and transparent—anyone can view, audit, and contribute. While specific “core team member” info isn’t detailed in public materials, the open-source nature encourages global developer community participation and collaboration.

Governance

XELIS plans to establish a DAO in the future. This is like handing over management of the “smart house” to all XEL token holders. Through the DAO, XEL holders can vote on major proposals, development direction, and protocol upgrades, jointly deciding XELIS’s future.

Funding

In the early stages, XELIS’s funding mainly comes from the portion of XEL tokens allocated to the treasury from mining rewards. This treasury share will gradually decrease as the project develops, and eventually be eliminated. This design aims for the project to become self-sustaining, reducing reliance on centralized funds, and ensuring all mining rewards eventually go to miners.

Roadmap

XELIS’s roadmap is like the construction and upgrade plan for the “super smart house,” clearly showing its development trajectory from past to future:

Key Historical Milestones and Events

• Q2 2023: BlockDAG architecture implemented.
• April 20, 2024: XELIS mainnet officially launched, marking the transition from testing to real operation.
• Q4 2024:
  • Whitepaper released, detailing the project’s technical principles and vision.
  • Multisig wallet support, enhancing asset security.
  • Zero-Knowledge Proof (ZK Proof) feature implemented, further enhancing transaction privacy.
  • Paper wallet, balance proof, and ownership proof features launched.
  • WooCommerce payment plugin released, making it easier for merchants to accept XEL payments.
  • XVM Playground (XELIS VM development environment) and XVM optimization completed.
  • Network upgrade #2 and smart contract testnet launched, preparing for the official smart contract rollout.

Future Key Plans and Milestones

• Q1 2025:
  • Fiat OnRamp Interface planned to go live, making it easier for users to buy or sell XEL with fiat.
  • P2P tracker refactor, optimizing network connection efficiency.
• 2025: Plan to support Ledger hardware wallet, providing a more secure way to store assets.
• Q2 2025: Genesix wallet updated to v0.0.8.
• December 13, 2025: Smart contracts officially launch on XELIS mainnet! This will be a milestone for XELIS, with the XELIS VM (XVM), SILEX programming language, faster blocks, dynamic fees and burn mechanism, and XelisHashV3 all going live, greatly expanding XELIS’s functionality and use cases.

Common Risk Reminders

Friends, any emerging blockchain project comes with certain risks, and XELIS is no exception. Just like any newly built “smart house,” no matter how well designed, you should be aware of potential issues before moving in:

Technical & Security Risks

• Complexity of New Technologies: XELIS uses cutting-edge tech like BlockDAG, homomorphic encryption, and zero-knowledge proofs. Their complexity may lead to unknown bugs or performance issues in practice.
• Smart Contract Vulnerabilities: Once deployed, smart contracts are hard to change. If there are bugs, it could lead to asset loss or instability. Although XELIS has its own VM and language, the security of smart contracts on a new platform still needs time to be proven.
• Network Attacks: Despite PoW and encrypted network protection, any blockchain network may face 51% attacks or other network threats.

Economic Risks

• Token Price Volatility: Crypto markets are highly volatile. XEL’s price may be affected by market sentiment, macroeconomics, competing projects, etc., with risks of sharp rises or falls.
• Market Adoption: As a relatively new project, it’s uncertain whether XELIS can gain widespread user and developer adoption, or if its technology can be widely applied in practice.
• Mining Reward Changes: The dynamic reduction in mining rewards, while aiming for long-term value, may affect miner participation and thus network security.

Compliance & Operational Risks

• Regulatory Changes: Crypto regulations are evolving globally. Any adverse regulatory changes could negatively impact XELIS’s development and operations.
• Open Source Project Challenges: As an open-source project, ongoing development and maintenance rely heavily on community engagement. If community activity drops, it may affect iteration speed and problem-solving.
• Intense Competition: The blockchain space is highly competitive, with new projects constantly emerging. XELIS must keep innovating to stand out.

Please note: The above risk reminders are not exhaustive. Investing in any cryptocurrency carries the risk of capital loss.

Verification Checklist

If you’re interested in XELIS and want to learn more or verify information, here are some official channels and resources you can check:

• Official Website: https://xelis.io
• Whitepaper: https://whitepaper.xelis.io (The most authoritative source for technical details and vision)
• Block Explorer: https://explorer.xelis.io (View all on-chain transactions, block info, and network status)
• GitHub Repository: https://github.com/xelis-project (See code activity, development progress, and community contributions)
• Official Docs: https://docs.xelis.io (For more detailed technical guides and instructions)
• Social Media:
  • X (Twitter): https://x.com/xelis_project
  • Discord: https://discord.gg/xelis
  • Telegram: https://t.me/xelis_io
  • Medium: https://medium.com/xelis-project (Project updates and articles)

Project Summary

In summary, XELIS is an ambitious Layer-1 blockchain project that seeks to solve core challenges in scalability, speed, and privacy by combining BlockDAG, homomorphic encryption, zero-knowledge proofs, and smart contracts.

Its tech stack is highly innovative, especially in privacy protection—using homomorphic encryption and zero-knowledge proofs to let users protect transaction and asset privacy without sacrificing functionality. The BlockDAG architecture also brings higher transaction throughput and faster confirmations.

XELIS’s tokenomics are deflationary, designed to incentivize long-term miner participation and network decentralization through dynamically adjusted mining rewards and a gradually eliminated treasury share. The future introduction of smart contracts and DAO governance also points to a richer, more community-driven ecosystem.

However, like any emerging blockchain project, XELIS’s success will depend on robust technical implementation, ongoing community development, market adoption of its innovations, and the ever-changing regulatory environment. It’s a project worth watching, but as always, this is not investment advice. Please always do your own research (DYOR) before making any decisions.