Crypto exchange OKX has officially launched its Layer-2 blockchain, X Layer, on the public mainnet. This network is designed to enhance scalability and interoperability within the broader Web3 ecosystem, offering improved efficiency and lower transaction costs for users and developers.
Built using Polygon's Chain Development Kit (CDK), X Layer incorporates zero-knowledge technology to enable developers to create customized, secure chains. The "X" in its name symbolizes openness and cross-chain interoperability, while "Layer" refers to the protocol layers that collectively boost blockchain network performance.
X Layer Technology and Development
X Layer leverages Polygon's CDK, a robust toolkit for building Ethereum-compatible chains. The integration of zero-knowledge proofs ensures enhanced privacy and security for all transactions and smart contracts deployed on the network.
The blockchain will also connect with Polygon's AggLayer, a unified liquidity solution that links multiple chains developed with Polygon technology. This allows seamless asset transfers and improved capital efficiency across connected ecosystems.
Developers from OKX will actively contribute to the CDK codebase, supporting ongoing improvements and innovation within the Polygon ecosystem. This collaborative approach aims to drive broader adoption and technical advancement.
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Industry Context and Exchange-Led L2 Trends
The launch reflects a growing trend of major cryptocurrency exchanges developing their own Layer-2 networks. For example, Coinbase introduced Base, a blockchain utilizing Optimism’s OP Stack, and Kraken is also reportedly exploring a similar initiative.
These efforts are largely motivated by the need to reduce transaction fees, increase throughput, and improve user experience—addressing common limitations of base layer blockchains like Ethereum.
By launching their own L2 solutions, exchanges can offer tighter integration between trading services and decentralized applications, creating more cohesive and efficient ecosystems for their users.
Features and Ecosystem Growth
X Layer initially launched on testnet in November 2023 and now supports over 170 decentralized applications (dapps), with plans to expand further. The network is designed to serve as foundational infrastructure for Web3, enabling seamless access to dapps and self-hosted wallets.
The integration with AggLayer will allow OKX’s 50 million users to easily onboard not only to X Layer but also to other chains within the Polygon-connected ecosystem, fostering greater liquidity and cross-chain activity.
This infrastructure is likened to a highway system that facilitates efficient and secure movement of assets and data, reducing congestion and cost while maintaining high security standards.
Regulatory and Strategic Considerations
OKX’s launch of X Layer aligns with its increased focus on compliance, particularly in the United States. Regulatory agencies like the SEC have emphasized that many cryptocurrencies may be subject to securities laws, though specific rules regarding assets like memecoins remain unclear.
In response to regulatory uncertainties, OKX has taken proactive steps such as delisting USDT from its European services and collaborating with Tether to freeze certain assets. These actions highlight the exchange’s effort to align with global regulatory expectations.
The development of proprietary blockchain technology may also provide exchanges like OKX with greater control over compliance and security mechanisms, potentially offering a more regulated yet decentralized environment.
Frequently Asked Questions
What is X Layer?
X Layer is a Layer-2 blockchain developed by OKX using Polygon’s CDK. It aims to improve scalability and reduce transaction costs while enabling interoperability with other blockchain networks.
How does X Layer improve scalability?
By processing transactions off the main Ethereum chain and using zero-knowledge technology, X Layer increases throughput and lowers fees while maintaining security and decentralization.
What is the AggLayer?
The AggLayer is a liquidity aggregation layer developed by Polygon that connects multiple chains, allowing unified access to liquidity and seamless cross-chain transactions.
Can users access dApps on X Layer?
Yes, X Layer already supports over 170 dApps and is designed to be a user-friendly gateway to decentralized applications and self-custody wallets.
How does X Layer relate to OKX’s compliance strategy?
The development of X Layer allows OKX to incorporate compliance features at the protocol level, supporting its broader effort to align with regulatory standards in various jurisdictions.
Is X Layer open to developers?
Yes, developers can build customized chains and dApps on X Layer using Polygon’s CDK, with OKX actively contributing to the ongoing development of the toolkit.