The cryptocurrency industry is complex and filled with technical jargon, hindering mainstream adoption and industry efficiency. Since the DeFi summer of 2022, there has been an influx of new products and solutions, leading to more complications and fragmentation. The industry needs user-friendly interfaces to increase adoption.
Many founders have started working on projects focused on chain abstraction integrations to connect users, accounts, and ecosystems seamlessly. This is to combat crypto's intricacies and increase industry adoption. A project at the forefront of this is MSV GG partner and Morningstar Ventures portfolio company XION—a Layer 1 blockchain purpose-built for mainstream adoption through Generalized Abstraction.
This month's review will cover the founding team, fundraising, the Layer 1 blockchain solution, XION's recent partnerships, and the upcoming roadmap, concluding with an analysis of the project's strengths and potential challenges.
What is XION?
XION is focused on making Web3 more approachable and accessible. Unlike other projects in the crypto space, the story behind XION is unique and has sparked polarizing reactions. The founder, Burnt Banksy, purchased a piece by renowned artist Banksy called “Morons” and then incinerated it via a live stream. He created a 1-to-1 NFT representation of the artwork and sold it for approximately three times more than the price of the original painting.
This action was meant to illustrate the concept of digital scarcity, as the digital item was valued more highly than the physical item. It is considered a pivotal moment for the industry and has received acclaim from leading publications such as CoinDesk, BBC, Bloomberg, The New Yorker, and more.
The team developed early NFT standards on Solana and no-code products. They realized existing tools made it nearly impossible to reach mass audiences. People had to complete 15 complicated steps over several days just to make a single purchase. This led to developing a Layer 1 blockchain that simplifies crypto barriers for all users.
Generalized Abstraction Infrastructure
XION has developed a Layer 1 blockchain to simplify Web3 for non-crypto users. They have implemented advanced UX features at the protocol level to improve interoperability and user accessibility.
Key Features of the Generalized Abstraction infrastructure:
- Enhanced User Experience: XION's infrastructure enables the development of user-friendly projects for mass adoption with features such as:
- Simplified login methods like email
- Seamless support across various devices
- Fast, gasless transactions
- Global direct credit/debit card purchasing
- Familiar fiat denominations
- Interoperability with over 50 networks
- Generalized Abstraction Layer: This unique protocol-level abstraction covers several features aiming to make Web3 accessible to a broader audience. These include:
- Account Abstraction: Supports easy login methods like email and biometrics, eliminating the need for complex private-public key systems and traditional crypto wallet management.
- Signature Abstraction: Compatible with various cryptographic curves, allowing transactions to be signed using FaceID, Passkeys, EVM curve, Solana curve, and more.
- Fee Abstraction: Transactions on XION are gasless from the user's perspective, simplifying the experience by handling fees in the background and reducing entry barriers.
- Payment Abstraction: Enables token and direct credit/debit card purchase transactions.
- Device Abstraction: Ensures a consistent and secure user experience across all devices, enhancing usability without compromising security.
- Chain Abstraction: This feature facilitates true cross-chain interoperability, extending the seamless user experience to all connected blockchains. It boosts the flexibility and reach of applications built on XION, enabling them to operate effortlessly across diverse blockchain ecosystems.
The infrastructure solution is live and has reached significant usage and ecosystem partners. Since the launch of the Testnet, the team has garnered over 2 million Meta Accounts, processed over 30 million transactions, and welcomed over 150+ projects to the ecosystem.
Use Cases
XION’s technical innovations enable various use cases that enhance user experiences across different sectors. Here are just a few of the many possibilities:
- Digital banking: XION’s Meta Accounts enable advanced security parameters such as session keys and customizable transaction limits for heightened security.
- Creator economy platforms: Onboarding non-crypto-native audiences to enable novel creator economy platforms.
- Enhanced gaming experiences: Enabling smooth on-chain gameplay through many of the benefits of Generalized Abstraction, such as seamless onboarding, gasless transactions, cross-device usage, and more.
- User-friendly DAOs: Allowing non-technical users to engage in decentralized governance seamlessly.
XION also has a large social media following, with over 650,000 Twitter followers and over 550,000 Discord members. In addition, its recent Chain Abstraction launch resulted in over 200,000 interchain accounts created in just a few days—the most ever recorded.
Token Economy - $XION
$XION is the main token used to power the XION ecosystem. The token utility includes;
- Proof of Stake Security (Staking): $XION holders can stake their tokens to support the network's security. In addition, unlike other ecosystems, inflation is only based on staked tokens, which helps reduce overall token inflation and makes the network's economics more sustainable.
- Network Usage Fees: $XION can be used to pay transaction fees. The network's unique fee system allows users to transact using other tokens, with fees converted to $XION to offset inflation.
- Governance (Voting): Holders can propose and vote on network changes.
- Medium of Exchange: $XION facilitates transactions within the ecosystem.
- Collateral & Liquidity: It serves as collateral and liquidity within the ecosystem.
For more details, please refer to the whitepaper: xion.burnt.com/whitepaper
In addition, XION is the first blockchain to integrate USDC as its primary transactional currency, which allows ecosystem users to have a predictable price across various protocol features.
Team, Fundraising, and comprises
The XION project is led by Anthony Anzalone, or Burnt Banksy. The project is supported by Injective, a leading Layer 1 blockchain designed for building Web3 finance applications. The team comprises experienced crypto experts, full-stack engineers, and developers with credentials from Morgan Stanley, Ubisoft, and Harvard University.
In April 2024, XION secured $25M in funding with backing from Multicoin Capital, Animoca Brands, Laser Digital, Mechanism Capital, The Spartan Group, and Morningstar Ventures. The new capital will allow XION to accelerate its development further and expand its global ecosystem.The team raised $3M in its pre-seed round in May 2021 and $8M in January 2022, with participation from The Spartan Group, Multicoin Capital, HashKey, and Morningstar Ventures – raising a total of $36M since its inception.
XION recently introduced its novel chain abstraction technology to several key ecosystems, including Injective, BNB Chain, SAGA, and Avalanche. Through XION’s Generalized Abstraction, these integrations will enable users to seamlessly engage with applications across ecosystems without navigating complex Web3 processes like cross-chain bridging or browser plugins. XION's Meta Accounts enable easy onboarding across different chains using familiar methods like emails. The integration also manages complexities such as gas fees and transaction signing, aiming to enhance liquidity and user engagement and support innovative cross-ecosystem applications.
Project Analysis
Strengths:
- Generalized Abstraction aims to enhance the cryptocurrency experience for all users and developers. The team's mission is to drive mainstream adoption and make crypto accessible to non-native users. They have a large and growing ecosystem with over 660,000 Twitter followers and 590,000 Discord members.
- The project has strong backing from leading Web3 VCs like Circle, Multicoin Capital, The Spartan Group, Arrington, and Animoca Brands, as well as close partnerships with top-tier crypto projects like Injective and Omni Network.
- The project has an array of crucial features that help onboard users seamlessly. For example, XION’s Meta Accounts eliminates the complexity around key management and enables frictionless device usage. Through these solutions, XION solves significant pain points for first-time Web3 users to facilitate mass adoption.
- XION is the first blockchain project to integrate USDC as the primary transaction currency with backing from Circle Ventures. The collaboration allows XION to accelerate mainstream adoption and onboard users with a familiar currency. Read more about the partnership here.
Challenges:
- XION needs flagship apps to drive adoption. The crypto industry is constantly evolving, creating new products and solutions. Staying updated and integrating all issues into the product requires effort. The challenge is to attract users and developers and compete with other blockchains for liquidity.
- To continue driving adoption, it is vital to attract quality projects that appeal to both Web3 and Web2 audiences.
What’s Next for XION
XION is now live and has already gained significant usage and ecosystem partners. Since the launch of the Testnet, the team has acquired over 2 million Meta Accounts, processed over 30 million transactions, and welcomed over 150 projects to the ecosystem.
XION is soon transitioning to mainnet, and its ecosystem is expanding rapidly. Additional Abstractathons, an ecosystem fund, and an incubation program are on the horizon as its extensive ecosystem of integrations, partners, and deployments continues to grow. Furthermore, the team is continuously innovating with its Generalized Abstraction infrastructure developments as it aims to be the leading L1 for consumer adoption and drive the industry toward mainstream adoption.
Learn more about XION
🌐 Official website: xion.burnt.com
🐦 Official Twitter: twitter.com/burnt_xion
🕹️ Discord channel: discord.gg/burnt
📖 Whitepaper: xion.burnt.com/whitepaper.pdf
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