What is XAI (XAI)?

Quick Facts

  • Type: Native utility token of the Xai Network
  • Blockchain: Layer-3 built on Arbitrum (Ethereum)
  • Developed by: Offchain Labs and Ex Populus
  • Key feature: Gasless, wallet-abstracted gaming experience
  • Node type: Sentry Nodes earn esXAI rewards
  • Reward token: esXAI, convertible 1:1 to XAI
  • Focus: Onboarding traditional gamers to Web3

Introduction

XAI is the native utility token of the Xai Network, a Layer-3 blockchain purpose-built for gaming on top of Arbitrum. The project's core mission is to let traditional gamers trade and own in-game items without ever needing to manage a crypto wallet or pay gas fees directly.

By abstracting away the complexities of blockchain technology, Xai aims to make Web3 gaming feel as seamless as conventional video games.

History & Background

Xai was developed by Offchain Labs — the team behind the Arbitrum Layer-2 network — in collaboration with Ex Populus, the labs company serving the Xai Foundation. After evaluating many other L1 and L2 chains, the team concluded that existing infrastructure could not deliver an acceptable gaming experience, so Offchain Labs built a dedicated chain for Xai from the ground up.

In early 2024, the XAI token launched via an airdrop to Sentry Node operators and NFT holders, marking the network's public debut.

How XAI Works

Xai sits as a Layer-3 chain on top of Arbitrum, inheriting Ethereum's security while enabling fast, low-cost transactions tailored for games. The network offers account abstraction, meaning wallets are managed in the background — players simply log in and play.

To secure the network, participants can run a Sentry Node from a laptop, desktop, or cloud system. Node operators require a Sentry Key (a non-transferable NFT credential) and earn esXAI tokens as rewards. esXAI can be staked in pools or converted to XAI on a 1:1 basis.

The Xai Foundation covers gas fees for games built on the network, and offers subsidies to attract new developers.

Tokenomics

XAI is the primary currency within the Xai ecosystem. Its utility spans transaction fee payments, staking, and governance participation. The esXAI token serves as the intermediary reward token for node operators, designed to encourage long-term network participation before converting to liquid XAI.

The token distribution model was designed to prevent excessive concentration and reward active contributors — including node operators, NFT holders, and community members.

Circulating supply ? 277.12 million XAI
Total supply ? 984.64 million XAI
Max supply ? 2.50 billion XAI
Updated 5mo ago

Ecosystem & Use Cases

Xai hosts a growing library of blockchain games, including card-battlers, RPGs, and action titles. Games like Final Form, Tarochi, Lost Glitches, and Savage Tale are built directly on the network. In-game items deployed on Xai become tradable, ownable assets with verifiable scarcity.

Game developers benefit from larger smart contract limits, fast transaction throughput, and financial incentives from the Xai Foundation to bring their projects to the chain.

Team, Governance & Community

The project is steered by the Xai Foundation, with Ex Populus acting as the primary labs entity. Offchain Labs provides core infrastructure support. Community members who stake esXAI tokens can participate in governance decisions, with stakers gaining access to exclusive events and network votes.

The community spans Discord, Telegram, and Twitter, with active node operators forming a decentralized backbone for network security.

Advantages

  • Gasless gameplay: The Xai Foundation subsidizes fees, removing friction for players.
  • Wallet abstraction: Traditional gamers can play without managing crypto wallets.
  • True item ownership: In-game assets are tradable on-chain with verifiable scarcity.
  • Arbitrum security: Inherits Ethereum-grade security through the Arbitrum stack.
  • Decentralized nodes: Anyone can run a Sentry Node and earn rewards.

Risks & Challenges

  • Adoption dependency: Network value relies heavily on attracting and retaining game developers and players.
  • Regulatory uncertainty: Token distribution and tokenomics were subject to regulatory review at launch.
  • Gaming market competition: Competing with established Web2 games and other Web3 gaming chains is an ongoing challenge.
  • esXAI conversion risk: The two-token model adds complexity that may deter less experienced participants.

Long-Term Vision

Xai's stated ambition is to onboard billions of traditional gamers into Web3 by making blockchain gaming indistinguishable from conventional gaming. By continuing to expand its game library, refine its gasless experience, and grow its decentralized node network, Xai aims to become the default home for AAA blockchain gaming on Ethereum.

Frequently Asked Questions

XAI is the native utility token of the Xai Network, used for transaction fees, staking, governance participation, and as the base currency within the ecosystem's in-game economies.

A Sentry Node is a network node that anyone can run on a laptop, desktop, or cloud system. Operators holding a Sentry Key earn esXAI rewards for keeping their node active and helping secure the network.

esXAI is the reward token distributed to Sentry Node operators. It can be staked in pools for additional rewards or converted to XAI on a 1:1 basis.

Xai is a Layer-3 blockchain built on top of Arbitrum, which is itself a Layer-2 scaling solution for Ethereum. This means Xai ultimately inherits Ethereum's security.

Xai was developed collaboratively by Offchain Labs — the creators of Arbitrum — and Ex Populus, the labs company serving the Xai Foundation.

No. Xai uses account abstraction to manage wallets in the background, allowing traditional gamers to play without directly interacting with crypto infrastructure.

The Xai ecosystem includes titles like Final Form, Tarochi, Lost Glitches, and Savage Tale, with more games being onboarded through developer incentive programs run by the Xai Foundation.

The Xai Foundation covers transaction fees for its own games and offers subsidies to external developers, ensuring players enjoy a gasless experience when interacting with games on the network.