xDai and The Roadmap Of Crypto Payments – Part 1

Decentralized Finance (De-Fi) has been booming! Projects are implementing new concepts daily. The recently popular decentralized crypto loan system is extremely impressive. DEXs have also come into the forefront. The fundamentals are getting stronger. However, a high yield is not sustainable.

We see that the current stage of De-Fi is not leading to the actual adoption of the masses. Various elements are missing and there is no single solution that solves the bigger picture in a decentralized way. The current De-Fi model is still restricted with a strong focus on loan systems (and nowadays, insurance). We have to understand that the money getting into such systems is an investment and it is not playing the role of payment. Adoption will automatically follow once crypto is used as a true mode of payment.

There has been considerable work going on to solve different areas of the crypto payment system. Many of these works are quite impressive. However, such projects are either working in silos or are under the radar (or both).

Investment vs payment

As per Investopedia, “…an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit.”

Such assets are not the ones we purchase for our daily needs (Groceries, Clothes, etc), hence investments and the adrenaline rush for quick profits will not lead to adoption.

To solve this problem, crypto needs to penetrate the existing payment system/s.

Investopedia defines payments as “…the transfer of one form of goods, services, or financial assets in exchange for another form of goods, services, or financial assets in acceptable proportions that have been previously agreed upon by all parties involved.

In a 2020 report called Global Trends in the Cards and Payments Industry, Global IT behemoth, Infosys, cites that the global cryptocurrency market is expected to grow at 6.2% annually until 2024 to reach US$1.4 Billion. What is more interesting is that it considers cryptocurrency in cards as one of the product innovation-led differentiation in payments offerings.

Now let’s take a more holistic view. What are the different pieces of the puzzle which can finally make a crypto payment solution tick?

xDai Stake on Altcoin Buzz Top Coin Picks

How should an ideal crypto Payment Protocol work?

Most of the De-Fi solutions are currently on Ethereum and is heavily dependent on the same for transactions. All other running blockchains have their drawbacks and they are yet to even start competing with Ethereum. Let’s keep this in mind while designing the ideal crypto Payment Protocol.



  1. Zero-Volatility
    • Purchases through non-stable cryptocurrencies are susceptible to high volatility.
    • Currently, there are no true decentralized Stablecoins. After the Black Swan event, Maker Dao has incorporated USDC as collateral making it less decentralized, but more stable
  2. Low Transaction fees
    • De-Fi is still heavily reliant on Ethereum. Ethereum 2.0 must resolve it’s current problems
  3. Super-Fast Transactions
    • Ethereum Network congestion makes transactions slow
  4. Wallet with user-friendly UI (Preferably Mobile)
    • This area is mostly solved. Wallets like Crypto.com, though centralized, are easy to use
  5. Crypto Debit Card
    • This area is still nascent and often faces turmoil. It is very difficult to get operating licenses. Crypto.com recently faced problems with one of its card providers and had to return money to wallet
  6. Integration with Point of Sale Solutions
    • Hardware PoS solutions are available, however without a favorable cryptocurrency which nullifies the volatility, the adoption is low.
  7. Easy Fiat on and off-ramp
    • Partners like Bitpay are available as payment gateways.

Local Regulation is a horizontal touching all the above 7 verticals.

Good to Have
  • Promotional Discounts and Cash Backs – Crypto.com card
  • Private Payments – None (popular) available
  • Staking rewards – None decentralized
  • Plug and Play processes through smart contracts – Under development (Celo, Fuse)

Maturity of the current crypto payment process

Let’s summarize the previous section by demonstrating the maturity of the existing crypto payment process

  • Green: The current setup works
  • Amber: There is a high scope of improvement
  • Red: It is a huge Pain point


We can see, that we have huge problems in the upstream of the current system. This is the core blockchain area. The downstream has its problem of end to end integration.

The next step in the future of Crypto

There can be 3 ways to solve the upstream problem of cryptocurrency:

  1. Ethereum scales (Ethereum 2.0 is a success).
  2. An Ethereum competitor comes into prominence and resolves existing issues. (Tron and EOS have tried and failed. Tezos and Cardano are trying to work their way up. Polkadot is launching.)
  3. A novel solution appears within the current Ethereum ecosystem.

We found out one such unique solution. This can be an immediate fix to the existing Ethereum payment problem (Point 3).

The solution is known as xDai. This hidden gem has already received raving reviews from Ethereum pioneers like Dr. Gavin Wood, Vitalik Buterin, and Joseph Lubin. It has taken the path highlighted in Point 3. xDai Chain is a stable Ethereum sidechain. It provides fast and inexpensive stable transactions.

(Note: We are not affiliated to this project and neither is this a sponsored article.)

How does xDai work?

The xDai blockchain is a sidechain of the Ethereum blockchain. It has the same properties as Ethereum but plans to work on a different consensus algorithm (Permissionless delegated Proof-Of-Stake based consensus with public POSDAO). This method will make sure that the transactions are valid and consistent across all nodes in the distributed network and give the unique properties to xDai (5-sec blocks, low fees).

In Part 2 of this article, we will deep dive into this project and tell you why the project matters, what is the current maturity of the project, how does it work and what are it’s various use cases.

Also, do watch the Altcoin Buzz youtube video about the Best Cryptocurrencies in 2020 You Can Use Today.


The information discussed by Altcoin Buzz is not financial advice. This is for educational and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided.

Do your own due diligence and rating before making any investments and consult your financial advisor. The researched information presented we believe to be correct and accurate however there is no guarantee or warranty as to the accuracy, timeliness, completeness. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd. All rights reserved.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.