XYO debuts public beta of its Layer 1 blockchain and dual-token system

XYO, one of the oldest decentralized physical infrastructure network projects, announced the launch of a public beta of its own Layer 1 blockchain.

XYO is transitioning away from the Ethereum (ETH) Layer 2 ecosystem, where it previously operated, to a purpose-built Layer 1 blockchain designed to improve the network’s ability to handle large volumes of real-time data with high throughput and low latency.

XYO’s new Layer 1 blockchain introduces a novel consensus mechanism called Proof of Perfect. This system allows decentralized nodes to deterministically identify the correct chain to append a block to by algorithmically ranking chain tips based on their “perfectness,” evaluating each tip’s validity, recency, and protocol alignment. This method eliminates the need to process full chain history, improving efficiency without relying on energy-intensive consensus models.

This is enabled by a lookback windowing mechanism that limits each node’s active memory to recent transactions, while archiving older data for future access.

Dual-token architecture with XL1

XYO also announced a new utility token, XL1. The original XYO token will continue to serve governance and staking functions while XL1 will handle the network’s operational needs, including payment of base and gas fees for transactions and smart contract execution, priority fees, and rewards for active network participants.

This structure is intended to balance long-term governance with real-time operational efficiency, offering tailored incentives for both token holders and active network participants.

“By decoupling governance from transactional utility and designing incentives to drive both performance and security, this next-generation token model lays the foundation for a truly scalable, decentralised infrastructure network that is optimised for the next wave of DePIN innovation,” the company said in the press release.