Since early 2022the protocol team has been working towards an XDC consensus upgrade that brings unprecedented securityforensic monitoringand a sought-after subnet architecture to the XDC ecosystem.

XDC Network successfully upgraded to XDC 2.0 on MondaySeptember 302024 at block number 80370000.

XDC Network's 2.0 development teamled by Princeton University's Professor Pramod Visawanathhas been working to createtestand implement a defining protocol enhancement. XDC 2.0which has been running on Apothem (testnet) since March 2024is its most impactful upgrade since the XDC mainnet's inception five years ago.

Network security has always been a pillar of XDC's consensus mechanism.

XDC 2.0's consensus mechanism is structured to eliminate network downtime from attacks and other issues. As proven by the ever-present outages of some of the most protectedhighly-used platforms for peer-to-peer transactionseven the slightest opportunity for malevolent actors or systemic failures can upend millions of people's social and economic lives.

Extended and repeated outages of high-volumecentralizedand decentralized Layer 1 blockchains have caused havoc on an industry reliant on its uptime. As cross-chain interoperability becomes mainstreamanother blockchain's outage can adversely affect completely healthy networksdisrupting business and consumer transactions for hours or days.

Even Web2 outagessuch as the 2021 Meta outage or the more recent CrowdStrike outage that affected business operations worldwideshould concern the blockchain industry. As more legacy data and transactions move on-chainnetwork downtime — whether from attacks or systemic issues — will not be tolerated. XDC 2.0 seeks to eliminate this concern for its ecosystem participants and raise the bar for blockchain security in general. 

To that endthe 2.0 upgrade introduces next-level military-grade security and forensic monitoring. The current XDC Network Proof-of-Stake protocol is fortified to resist attacks and has a remarkable uptime record. The upgrade improves upon this. In contrast with XDPoS 1.0where high security is achieved as blocks grow deeperresulting in a longer confirmation delayXDC 2.0 requires only a three block finality. With a new block generated every two secondsmaximum security is achieved six seconds after a block is generatedraising the bar substantially for Layer 1 blockchain security.

XDC 2.0 further improves on its earlier version — taking all blockchain security into unprecedented territory — by implementing a systematic forensic monitoring system that includes slashing rogue nodes.

There is already a very low probability of executing a hostile takeover of the XDC Networkwhich verifies every network transaction through its consensus mechanism. As the Byzantine fault tolerance protocol can theoretically withstand up to one-third of validator nodes going roguea takeover would require widespread collusion between node operators. These node ownerswho are decentralized globallyhave at least 10 million XDC and are paid a percentage of that annually as a reward for validating transactionsmeaning they all have a stake in the network's success.

The XDC 2.0 upgrade takes this security to another levelfeaturing a first-of-its-kind governance platform that can identify malignant nodes with proof and slash them almost immediately—involving burning their 10 million XDC tokens and all rewards that come with being a node owner. Due to Know-Your-Customer requirementsoperators of rogue nodes could be prosecuted.

XDC 2.0's security upgrade will act as judgejuryand executioner regarding malignant node activityadding another obstacle for malicious actors hoping to reach that one-third threshold.

Unprecedented security is critical as the XDC Network continues to add institutional users who may be crypto-adverse. Because business interests worldwide may be wary of blockchain technologythe bar for security is even higher. Ahead of its timeXDC 2.0 meets that mark as the first network protocol to include forensic monitoringoutpacing protocols even in the early stages of development.

A user-friendly architecture for subnets will also launch with XDC 2.0.

Subnets will be a crucial driver for institutional adoption of the XDC Networkand of blockchain in general. The ability to deploy and utilize them on the XDC Network offers opportunities seen on only a handful of other blockchains.

Subnets allow users to build their own smaller replica of the XDC mainnet on the XDC Networkvalidator nodes and all. The subnet's block headers will periodically publish to the XDC Network mainnet while the block body will be validated on the subnet's decentralized private nodes. Subnets will have their own private explorers. By adding privacy functionalitiesXDC is solving the age-old debate over public vs. private blockchains.  

These subnets will be more secure even than the upgraded XDC Networkas a malicious actor would have to compromise both the XDC mainnet and the subnet to revise the subnet ledger. Since the subnet block header only contains metadatathe subnet block bodies are not checkpointedand no account or transaction data will become publiceven if a subnet were compromised.

A series of user-friendly applications will come with the subnet launch on the networkincluding:

The launch of XDC 2.0 comes after a rigorous three-year period of development and testing.

This included testing the individual functions and the integration between components and ensuring the entire system's functionality end-to-end. Finallythe protocol team conducted pressure tests by abruptly expanding the network size before reducing itand turning on and off nodes to ensure the network could recover in all scenarios. "We reconstruct the network to make sure that it can always survive," said Fisher Yu.

In addition to ongoing upgrade testingCertiK — a global leader in smart contract and blockchain security monitoring — completed a rigorous audit on XDC 2.0. The audit concluded with the protocol achieving a AA rating on its security posturing and being placed in the top 10% of crypto projects per CertiK's SkyHarbor reporting. The protocol achieved an "Excellent" rating in several categories: CodeCommunityOperationaland Market. Since the CertiK auditXDC 2.0 has been running on Apothem testnet.

With the 2.0 upgrade on September 30the XDC Network takes a monumental step towards making blockchain more appealing to risk-averse industries through an unprecedented combination of privacy and security.

Along with the 2.0 consensus upgradeseveral other network innovations and improvements have recently occurred or will be implemented soon. These include:

While largely overseen and carried out by XinFin and the protocol teamthe XDC Foundation played an important role in the development of XDC 2.0. The Foundation was involved in the upgrade's marketing plans and the research and development process as a wholeincluding the CertiK audit.

Looking forwardXDC 2.0 will set a new bar for blockchain security. Its subnets architecture also provides the tools for would-be blockchain userswho have previously been wary of the technology and can now confidently explore its benefits. 

From day oneXDC Network was built with the long-term purpose of being a reliablescalableand secure blockchain upon which users of all shapes and sizes can build their projects. XDC 2.0 ensures that this focus is hearty and sustainable. 

Read more from XDC Foundation on Medium.