Dual Token Model Explainer

The dual token model was created to preserve xDai's stable transactional capacity while supporting incentives for stakers (validators & delegators) and governance capacity for the network.

xDai, the stable native coin allows users to predict fees and conduct transactions where prices will not fluctuate by large margins. This is ideal for payments.

STAKE creates incentives for validators and their delegators though token emissions. While there is volatility with this token, it is not a transaction-based asset. Like other tokens, the price is determined by supply and demand in the Ethereum ecosystem.

To provide block rewards, STAKE locked in the protocol accrues a 15% Annual Percentage Rate. The block reward provides incentives for validators and delegators to continue staking. Additional rewards are also provided through separate mechanisms. See rewards in a dual token environment for more details.