Matic

xDai & Matic sidechains

As we compare chains, we see that xDai and Matic share several things in common:

  1. Both are Ethereum-based Proof-of-Stake (PoS) sidechains designed to address Ethereum mainnet issues like slow transactions, high fees, and throughput concerns.

  2. Both are completely compatible with Ethereum 1.0, meaning smart contracts, tokens, and other functionality can be ported over from Ethereum with very few changes, and run with more efficiency on a sidechain.

  3. Both are moving toward full decentralization and delegated staking.

Although both chains fill similar roles as Ethereum scaling solutions, there are also some key differences separating the two.

Key Differences

Under the hood, the PoS consensus process between the two chains is quite different. Matic uses a plasma-based framework with Tendermint BFT consensus to achieve very fast tx and block times. xDai uses POSDAO with Authority Round consensus.

These different algorithms impact how each chain functions, but we will not go into the details here. Please see the links at the end of the article for more on the potential benefits and drawbacks of each.

Here we focus on key differences from a user perspective when interacting and or staking with Matic and xDai.

xDai

Matic

1

Stable Chain

Volatile Chain

2

Dual token

Single Token

3

Bi-directional interoperability for asset transfers and arbitrary messages

7 day wait period for Matic -> Eth transfers

Single direction arbitrary message transfer (Eth -> Matic)

4

5 second blocks, 70 TPS with future scaling plans to meet demand

1 second blocks, 7000 TPS reported

5

Staking Minimums, withdrawals after staking epoch

No staking minimums, 21 day waiting period for validator withdrawals

  1. Stable chain vs volatile chain: xDai is a stable chain, meaning transactions as well as fees are paid with a stable token (xDai, which inherits the Dai peg to the US dollar). On xDai, buyers and sellers know that transactions retain their value, and developers can plan for costs related to micro-transactions. On Matic, users can send stable currencies but fees are still paid with MATIC tokens, and tx costs are low but unpredictable.

  2. Single Token vs Dual Token structure. The Matic token is used for both transactions and as a staking/delegation token. Token prices, supply, and market forces impact chain transactions as well as the underlying Proof-of-Stake consensus. The xDai chain separates these concerns, with a stable transactional coin and market-driven staking coin. The STAKE staking token is a multi-chain staking token, and may be used for staking on other chains.

  3. Asset transfers between chains: Both chains are efficient when transferring assets from the Ethereum Mainnet, it takes a short amount of time to move ERC20 or ERC721 tokens from Ethereum to Matic or xDai. However, moving assets back to the Ethereum Mainnet is a different story. On the xDai chain, assets can be moved in minutes to achieve very quick liquidity. With Matic, transactions must undergo a 7 day waiting period (due to fraud checks) before they are available on Ethereum. Both chains also have allow for arbitrary messages (data calls) to pass between chains. With Matic messages can only be transferred in a single direction - from Ethereum to Matic. The Arbitrary Message Bridge on xDai allows for bi-directional message transfers and contract calls, creating additional interoperability.

  4. Transactions Per Second (TPS) and Block Times. Matic reports extremely fast times, 1 second blocks with 7000 TPS (and theoretically up to 65,000 TPS)! The xDai chain produces 5 second blocks with 70 transactions per second, which aligns with the current volume requirements of the chain. While xDai TPS is much faster than the Ethereum mainnet (15-20 TPS), there is still a wide gap between Matic and xDai. This is not problematic - optimizations can be made to accommodate higher transaction rates as needed. The xDai chain is capable of scaling horizontally (by adding additional chains connected by bridges) or vertically (by optimizing nodes). Because the POSDAO Proof of Stake algorithm allows for a configurable consensus, there are plans to move to HoneyBadger BFT consensus which will increase TPS by a factor of five. Additional research is being done around transaction prioritization, block parameter tuning and other optimizations to make sure tx capacity and usage requirements remain in alignment.

  5. Staking: Both chains offer validator and delegated staking opportunities as well as a UI for staking. However, the functionality and underlying processes differ. With Matic, validators and delegators can stake with just 1 Matic token. Validators take a % of any delegators commission, and the reward pool of 1.2 Billion Matic tokens is designed to support the network for 5 years. After that time, rewards will transition to tx fees. Validators are chosen based on stake amounts, and when they want to exit the protocol, must wait for 21 days before withdrawing their funds. xDai validators must have 20,000 STAKE in order to declare node candidacy, and delegators must have 1,000 STAKE. This makes potential collusion much more costly for any malicious actors. Validators do not charge commission, but are guaranteed 30% of staking rewards. Reward emissions are created continuously as rewards and are based on how much STAKE is staked into the protocol. Validators can submit a withdrawal claim during a staking epoch (7 days) and can withdraw their funds once the epoch is over. Since misbehavior is accounted for during the staking epoch, there is no need to wait for 21 days as with Matic to ensure there was no malicious activity.

Chain Parameters / Features

Component

xDai

Matic

Mainet launch

October 2018

May 31, 2020

Compatibility with Ethereum

100%

100%

Staking Token

STAKE

MATIC

Transactional Token

xDai stable coin

MATIC volatile coin

Tx Stability

Stable

Volatile

Explorer

BlockScout: https://blockscout.com/poa/xdai

BlockScout: https://explorer.matic.network/

Sidechain Structure

EVM sidechain: 100% Ethereum patchset

Matic VM with More Viable Plasma

Block Times

5 seconds, 70 TPS (reported)

1 second, 7000 TPS (reported)

Asset withdrawal / Interoperability

TokenBridge BiDirectional transfers

Matic JS - 7 day withdrawal period from Matic -> Ethereum

Sybil resistance

Phase 1: Proof-of-Stake with selected delegators Phase 2: Public delegated proof-of-stake

Phase 1: Proof-of-Stake with selected delegators Phase 2: Public delegated proof-of-stake

Consensus

AuRa, with roadmap to HBBFT

Peppermint (a forked version of Tendermint BFT)

Staking UI

Yes

Yes

Scalability

Horizontal (Additional chains) & Vertical (node scaling)

Horizontal (additional chains)

Real World Use Cases

Events, Conference Adoption, Burner Wallet

TBD Mainnet just launched

Meta-transactions

Yes

Yes

Validator / Delegator staking minimums

20K STAKE Validator 1K STAKE Delegator

1 MATIC for either

Staking token emission

8,765,000 STAKE + max 15% yearly emission

10,000,000,000 MATIC capped

Exchange based staking

Pre-staking at Bitmax: 36.4% APR

Binance Savings: 10% APR

Micro transactions

Supported, costs in stable currency allow for accurate resource planning

Supported, costs difficult to assess

Randomness

Contained within the protocol

Oracle based

Wallet support

Burner Wallet, Alpha Wallet, Nifty Wallet, Portis, Saturn, TrustWallet, Ledger, Trezor

Matic Wallet, Atomic Wallet, Trust Wallet, Ledger, Trezor

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