What is xDAI? How do I use xDAI? A Simple Explanation.

Jared Stauffer
4 min readJun 6, 2019


xDAI, by POA Network

xDAI is a cryptocurrency that is pegged to the US Dollar*, has super low transaction fees, and fast transaction times. These features make it an ideal cryptocurrency to use for every day transactions like retail stores or peer to peer transfers.

*What do you mean by pegged to the US Dollar? xDAI is a derivative of the DAI cryptocurrency (hence the xDAI name). DAI is a cryptocurrency stablecoin that is pegged to the US Dollar. A stablecoin is a cryptocurrency pegged to another stable asset. What this means is that DAI (and therefore xDAI) is supposed to have a value that is as near as possible 1 DAI = $1 USD. You can read more about how this works here. The main point behind stablecoins is to allow people to transact with cryptocurrency without being subject to the volatility of most cryptocurrency prices.

What do you mean by super low transaction fees? The cost to perform a transaction (send xDAI to someone) is about $0.000021 USD. You are reading that correctly, about 21 thousandths of one penny per transactions. In other words you can do about 500 transactions for 1 penny (476 to be exact). And it doesn’t matter the size of the transaction, 1 xDAI or 100,000 xDAI. Contrast this with what it costs to send money in the normal (USD, Euro) financial world (3–5% merchant fees or upwards of 8% for international transfers), or even a typical Ethereum cryptocurrency transaction which costs about $0.15 USD.

What do you mean by fast transaction times? Transactions on the xDAI blockchain occur within five (5) seconds. What this means is that if you send someone xDAI, they will receive it in their wallet in about five seconds or less. Contrast this with the time it takes to send money in the normal (USD, Euro) financial world (credit card transactions take 48 hours to a week for merchants to receive and international transfers can take days), or even a typical Ethereum cryptocurrency transaction which takes about 1–3 minutes.

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Why use xDAI? Why not just use DAI? Great question. Simply: transaction fees and transaction speed. Transaction fees for xDAI = about $0.000021 USD vs. DAI = about $0.15. Transaction speed for xDAI = 5 seconds vs. DAI = about 1–3 minutes. The reason for the difference is because DAI is on the Ethereum mainnet blockchain, so its fees and speed are dependent on that. But when does this really start to matter? Imagine if you did 10 transactions a week for a month (4 weeks) at 5 DAI each. The fee difference would be $0.00084 with xDAI and $6 with DAI. Imagine you live in a country where the national currency is experiencing 55% annual inflation rate year after year — using cryptocurrencies can be extremely helpful.

How do I get xDAI? Sadly, it is not easy, or at least not easy enough. First you have to exchange fiat (USD, Euro) money for DAI, and exchange DAI for xDAI. One of the easiest ways I have found to do this is to use Coinbase to exchange USD for DAI, then transfer the DAI to the Dex Wallet mobile app, and then inside the Dex Wallet you can exchange DAI for xDAI. You can also skip the hassle of creating a Coinbase account and use Changelly or Wyre, but the fees are much higher :(. If anyone knows of a less expensive way to do this, please let me know.

How do I use xDAI? xDAI can be sent or received very easily with the Dex Wallet mobile app or the new Poketto xDAI mobile wallet. Both of these are iOS (iPhone) only, so if you know of other good Android options, please let me know. Poketto bills itself as a “wallet you can actually show to your parents” and is super simple to use. It is in beta right now, but I am hopeful will go to full release soon. Also, DAI can be exchanged for xDAI (and the reverse) right inside the Dex Wallet app. In the app, choose your Ethereum wallet, click Apps on the bottom, then xDAI Bridge. It is called a bridge because when you exchange DAI for xDAI, the blockchain puts the DAI you exchanged in a pooled account and gives you xDAI. Then when you go back the other way, it takes in your xDAI and gives you DAI out of that common pool.

Are there any examples where xDAI has been or is being used more than on a peer to peer basis? Glad you asked- Yes! The burner wallet, a temporary use, in browser xDAI wallet developed by Austin Griffith, was used with great success at conferences in Denver (Feb 2019) and New York (May 2019).

Did I miss anything? Let me know, @jaredstauffer on Twitter.

AND, if this was helpful — don’t forget to clap! 👏👏👏

Need help with any software development? My team and I can help. Come say hi at Utopia Solutions!