Question 1

What is XL1?

Accepted Answer

XL1 is XYO Layer One's inflationary utility token, used for routine network activity, including paying Gas, incentivizing block production, and supporting data validation. When users or applications submit transactions, execute contracts, or conduct related data operations, XL1 is the usage token in this network's economic flow. It does not have the same role as the existing XYO token: XYO primarily supports staking, governance, and network-security commitments, while XL1 handles day-to-day usage fees and the corresponding operational incentives.

Question 2

What is XL1 used for in the network?

Accepted Answer

On XYO Layer One, Gas is the unit charged for network resources consumed by a transaction or smart-contract execution, and XL1 is used to pay that fee. After a transaction is submitted, the network processes it according to its resource use; the fee is not merely an application subscription fee, but an entry point for network activity into the protocol's economic system. Public documentation also states that XL1 is used to incentivize block production and data validation. Therefore, fee payment, network participation, and rewards are not separate promotional uses, but different links in the same network operating model.

Question 3

What is the difference between XL1 and XYO?

Accepted Answer

XYO is the staking and governance asset: validator nodes and block-production nodes support network integrity through XYO commitments, and staked XYO can enable participants to earn XL1. XL1, in contrast, is the network-usage and inflationary reward token, used for Gas and incentives for block production and data validation. Therefore, paying an everyday network fee is not the same as staking XYO; conversely, holding XL1 does not automatically confer XYO governance or staking status. The two tokens are connected through the security and usage economy of the same network, rather than being interchangeable.

Question 4

How is XL1 supply created?

Accepted Answer

XL1 issuance has two layers. A fixed 38 billion tokens are minted when the genesis block starts; another 10 billion are minted as initial blocks are created during the Genesis Era, producing a total of 48 billion during that era. The end of the Genesis Era does not mean issuance stops entirely: XL1 continues to be produced with each new block, but the supply growth rate declines along a decreasing curve and approaches an annual inflation rate of about 0.7% in the long term. In other words, the 38 billion, 10 billion, and long-term block issuance respectively correspond to startup minting, Genesis Era minting, and subsequent issuance; they must not be conflated with a fixed total supply.

Question 5

How is XL1 allocated during the Genesis Era?

Accepted Answer

The 48 billion XL1 produced during the Genesis Era is divided into three categories: 26.8 billion tokens for the community and investors, about 56%; 10.6 billion for the team and advisors, about 22%; and 10.6 billion for the XYO treasury, about 22%. These percentages describe the distribution of tokens produced during the Genesis Era, not a cap on the entire long-term supply. The treasury is positioned as a long-term resource that can be used for developer grants, public goods, education, partnerships, bounties, and emergency liquidity; the community and investor portion is intended for participants such as early nodes, capital, testing, and infrastructure. The materials state that team and advisor tokens may be subject to vesting or lockups, but do not provide a single specific schedule on that page.

Question 6

How do transaction fees affect XL1 supply?

Accepted Answer

Of the XL1 fees paid by users, certain base-fee portions explicitly listed in the documentation are burned, meaning permanently removed from circulation; at the same time, XL1 is used as an incentive for block production and data validation and continues to be issued under block-production rules. Burning and issuance are two opposing supply components that can exist at the same time. Therefore, assessing changes in XL1 supply cannot look only at either “there is burning” or “there is inflation”: the actual result depends on the amount of new issuance in a period, the amount of base fees burned, and network activity. The materials do not provide a fixed formula that can be used to lock in net supply change in advance.

Question 7

Who may receive XL1, and why?

Accepted Answer

XL1 rewards correspond to behaviors that contribute to the network's continued operation: official materials list future participation, validation, and node operation, and state that XL1 is used to incentivize block production and data validation. The condition for receiving rewards is not merely holding XL1, but contributing to the network through forms of participation recognized by the protocol. In the dual-token structure, XYO staking can also enable participants to earn XL1; this explains the connection between security commitments and utility-token rewards, but does not mean that all XL1 holders automatically receive rewards.

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