The competition for market share among major centralized exchanges (CEX) has expanded from trading and financial services to Layer 2 Solutions. Last year saw the launch of Coinbase’s Base, Binance’s opBNB, and Bybit’s Mantle. To keep pace, OKX announced the plan of its zk-based L2 network, X1, in November last year, further expanding its Web3 ecosystem. What changes will X1 bring to the competition in the L2 space? And how should one interact with X1? This article will answer all these questions!
What is OKX X1?
OKX X1, developed in strategic collaboration between OKX and Polygon Labs, is a Zero-Knowledge (ZK) Ethereum Layer 2 solution created with the Polygon Chain Development Kit (CDK). The goal of X1 is to improve Ethereum’s scalability and security, all while making transactions more cost-effective. It’s designed to be Ethereum-compatible, making it easier for developers to create Web3 apps and connect with various blockchain ecosystems.
The testnet of X1, unveiled in November of the previous year, serves as a bridge connecting the OKX, Polygon, and Ethereum communities. Within the X1 ecosystem, the OKX platform token, OKB, is utilized as the native token for gas fees. As for the launch of the X1 mainnet, it is expected to go live in Q1 of this year.
What Prompted the Launch of OKX X1?
According to OKX Chief Marketing Officer Haider Rafique, the decision to build X1 is rooted in “decentralization and using the architecture of Web3 to create a new internet with more transparency, control, and mobility for all.”
This vision indeed serves as a primary reason for OKX to develop X1. A powerful Layer 2 solution can accelerate the mainstream adoption of Web3. However, we believe there must be additional factors that have driven OKX to join the intense competition in the L2 arena.
1. The Competition Moves from L1 to L2 as the Current Development Trend
Instead, competition among L2 solutions has taken center stage. L2s based on Optimistic-rollup and ZK-rollup technologies each have their supporters and continue to gain greater market share. Last year’s implementation of zkEVM technology has also raised industry expectations for the changes L2 can bring.
Not to mention, OKX’s OKT Chain (OKTC), launched in 2021, has seen dwindling interest. According to DeFiLlama, its TVL is just 15M, ranking 73rd among all blockchains. Launching an L2 solution might be a good strategy to change this situation.
2. Adding More Utility to $OKB and Driving Its Price Up
With the launch of OKX X1, $OKB will be used as X1’s native token for gas fees and in various protocols on X1. This allows $OKB to move beyond its limited function in centralized exchanges and find more applications.
Following OKX’s announcement of a new L2 solution in February last year, $OKB’s price rose quickly. With the imminent official launch of X1, $OKB recently reached an ATH in price.
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3. OKX Continues to Expand Its Web3 Territory, Establishing Its Own Advantages
Since last year, OKX has aggressively ventured into the Web3 space. Its blockchain wallet, OKX Wallet, has become one of the most popular wallets, while OKX DEX offers convenient and fast swap services.
To continue expanding its user base, creating an L2 filled with diverse protocols will undoubtedly attract more potential users and provide a convenient Web3 portal for OKX CEX users.
Moreover, by incubating protocols on X1, the relationship between project teams and the exchange will be strengthened, potentially giving OKX a first-mover advantage when launching new tokens.
4. Not Letting Rivals Steal the Limelight
As mentioned earlier, several of OKX’s main competitors, such as Binance, Bybit, and Coinbase, launched their L2s last year. To maintain its market share and stay at the forefront of the industry, OKX must not fall behind other CEXs in developing new technologie.
Who are The Main Competitors of OKX X1?
CEXs are involved in a wide range of complex and diverse businesses, and the blockchain they launch may not be as good as those developed by specialized teams like Offchain Labs or Matter Labs. However, the main competitors of OKX X1 are not Arbitrum or zkSync. If it can surpass other exchanges’ blockchains in terms of TVL or user numbers, that would be a significant victory.
Here’s the comparison of L2 solutions launched by CEXs:
|Daily Active Users
Based on the data above, after the launch of X1, the first target is to catch up with opBNB, while Base remains the biggest competitor. Leveraging the large user base of OKX CEX and OKX Wallet, whether it can quickly equal the achievements of these L2s is something that time will reveal.
How to Interact with OKX X1?
The testnet of OKX X1 was launched in November last year, and in just two months, the number of apps on the X1 testnet has nearly reached 50. This guide will demonstrate step-by-step how to transfer assets to the X1 testnet.
- Add the OKX X1 Testnet to your wallet through Chainlist.
- Visit the OKX X1 Bridge and follow the links below to collect tokens from faucets.
- Return to the OKX X1 Bridge, where you bridge assets between OKX X1 Testnet and Ethereum Sepolia Testnet as needed.
Once your assets have been successfully transferred, you can start exploring the apps on OKX X1! The official OKX website lists a variety of apps currently available on the X1 testnet, offering a diverse selection.
OKX X1 is Coming Soon on XYFinance
Following the official launch of OKX X1, XY Finance will integrate with it immediately, allowing users to seamlessly bridge assets from over 20 EVM chains to X1 and experience the X1 ecosystem without missing a beat!
(Know more about XYFinance: How to Cross-Chain Swap? Bridge Assets Across 20+ Blockchains)
About XY Finance
XY Finance is a cross-chain interoperability protocol aggregating DEXs & Bridges. With the ultimate routing across multi-chains, borderless and seamless swapping is just one click away.