Over time, the global blockchain industry has evolved manifolds, with multiple ecosystems contesting for users’ attention. While choosing platforms that are best-suited to their needs, users need to compare alternatives by focusing on certain essential parameters. Against this backdrop, we provide a detailed comparative analysis of the Binance Chain and the XinFin Digital Contract (XDC) Blockchain.
Developed by eXchange inFinite (XinFin) in 2019, the XDC Blockchain is an enterprise-ready, public-private hybrid ecosystem. To ensure optimum security, XDC’s decentralized network implements double-validation and node randomization, among other factors. The Binance Chain, on the other hand, is a centralized network developed and governed by Binance, and was launched in 2017.
As compared to other popular alternatives, both XinFin and Binance facilitate faster transaction settlements. Similarly, both are compatible with Ethereum-based Smart Contracts, dApps, and tokens. However, in the case of Binance, speed comes at the cost of centralization, while in XinFin, it’s achieved despite a decentralized architecture. Furthermore, as compared to Binance’s $0.48, transaction fees on the XinFin blockchain is as low as $0.0000000000015.
At the time of writing, Binance’s native BNB coin is priced at $245.69, while XinFin’s XDC coin has a market price of $0.027. Binance’s overall market capitalization is over $46 billion, whereas XinFin has a little over $333 million. Notwithstanding, however, XDC’s total supply is over 37 billion, as compared to BNB’s 170 million.
Arguably, the gap in market capitalization is partly because of the difference in the ecosystems’ purposes, as well as the fact that XinFin began its journey two years after Binance. To acquire a better understanding of this claim, let us now compare the two blockchains by focusing on certain specific parameters.
Blockchain Network Type
As already mentioned, XinFin’s network is decentralized, while Binance’s is centralized. In the greater scheme of things, this is greatly significant, and thus, demands elaboration. In XinFin, around 95% of all nodes are run by the globally-distributed users’ community, while Binance runs most of its network’s major nodes.
To anyone even distantly familiar with the blockchain-cryptocurrency domain, the problems of centralization are well known. Above all, there remain the risks of censorship, de-platforming, and manipulation. Further, the privacy and autonomy of individual users are at stake, which violates the foundational principles of this sector.
In addition to being adequately decentralized and community-governed, XinFin’s hybrid ecosystem combines the best features of public and private blockchains. This makes the platform well-suited to the needs of enterprises that require a blend of confidentiality and transparency.
Despite keeping sensitive information private, enterprises leveraging the XDC Network can access seamless data sharing and auditability, thereby minimizing bottlenecks and enhancing efficiency. Naturally, Binance Chain’s hierarchical and centralized framework precludes its ability to facilitate such functionalities.
Furthermore, XinFin’s robust KYC compliance mechanism ensures that both enterprises and end-users can have reliable, safe, and scam-minimized interactions on the network. Binance, however, doesn’t extend KYC compliance to node owners, which exposes a significant point of risk for its blockchain.
Coin burning is the process of taking digital currencies out of circulation, primarily by sending them to inaccessible, yet auditable, addresses. In general, it serves several purposes — moderating the token’s price, tackling inflation, and over time, making the network robust and agile.
In this regard, Binance adopts a radical strategy of burning BNB coins on a quarterly basis. In Q3 2020, the company burned 2,253,888 BNBs, worth $68 million, thereby recording it’s highest ever token burn in terms of fiat value. Although profitable for existing users, this substantially raises the barriers to the entry of new members, which isn’t essentially desirable.
XinFin, on the other hand, follows an indirect and more sustainable burning strategy. Backed by over 8000 active users, BlockDegree is a XinFin-powered edTech platform. It offers wide-ranging online courseware, which learners can access for free. However, to receive the immutable, blockchain-based digital certificate upon completion, they have to bear a minimal transaction and storage fee, payable in XDC tokens. In turn, BlockDegree burns a part of these payments, thereby consistently strengthening the XinFin network with every certificate. As of early 2021, the platform has issued over 1500 certificates, while the number of courses and learners is steadily on the rise.
To eliminate the need for centralized authority and governance, blockchain networks adopt algorithmic consensus mechanisms. These secure the network by enabling a tamper-proof means of validating transactions and creating new blocks. Contrary to resource-intensive and non-scalable Proof-of-Work (PoW), several progressive blockchains implement the Proof-of-Stake (PoS) consensus mechanism. In short, this method requires users to stake their tokens in special wallets in return for voting rights.
The Binance Chain adopts an ordinary Delegated Proof-of-Stake (DPoS) consensus mechanism. XinFin, however, posits itself several steps forward by implementing novel modifications to PoS consensus. The XinFin Delegated Proof-of-Stake (XDPoS) comes with double validation which strengthens security and randomization, while preventing handshake attacks. Moreover, it also reduces the confirmation time of each transaction.
Minting & Staking
As manifested in its adoption of a resource-optimized consensus mechanism, XinFin prioritizes ecological sustainability. The XDC token is an environmentally-aware Green Coin, striving to minimize energy wastage. Therefore, it is pre-mined or pre-minted, thereby consuming minimal energy, as low as simple word processors. Binance, however, has no such commitments, meaning that there’s no energy-optimizing approach for its network, apart from the PoS consensus mechanism.
Lastly, both XinFin and Binance have methods for incentivizing and rewarding users, although to varying degrees. In XinFin, Master Nodes and Backup Nodes support staking, while Binance has the same for validators. Additionally, XinFin has a range of bounty programs for developers, beta testers, and so on.
As a whole, it’s clearly the case that XinFin is more user-oriented and true to the ideals of the blockchain-cryptocurrency community. Apart from offering a wider scope, the network prioritizes the needs of individuals, while also meeting the demands of enterprises. To explore the XDC Network in further depth, visit the platform’s official website.