Inside the New XYO Layer-1 Blockchain

Key Takeaways

XYO launched its own Layer One blockchain to handle massive amounts of data for DePIN, AI, and real-world asset (RWA) projects.
Staking $XYO tokens is the only way to earn $XL1, the utility token powering XYO Layer One transactions.
The dual-token model keeps $XYO focused on governance, staking, and long-term value, while $XL1 supports gas fees, node rewards, and network operations.
Early stakers benefit from higher emissions, making early participation attractive for those securing the network.

Staking has become one of the most common ways for crypto users to earn rewards while supporting blockchain networks.

XYO, a leading decentralized physical infrastructure network (DePIN) project with over 10 million active nodes (individual devices that act as participants in the network), launched in 2018.

The project has used its Proof of Location and Proof of Origin technologies to verify and secure data, enabling asset tracking, DePIN applications, gaming, and other data-heavy use cases.

The XYO token is listed on major global exchanges, including Coinbase, Kraken, KuCoin, and Bitpanda, with more listings expected in the coming weeks. Kraken added XYO on August 13, shortly after the project reported $8.8 million in 2024 revenue in its Securities and Exchange Commission (SEC) filing.

As of September 16, 2025, XYO has announced a new staking model that allows users to secure its data-focused Layer-1 blockchain and earn its second token, $XL1.

This article explains XYO staking, how it works, and the exact steps users must follow to start staking $XYO and earning rewards.

How Staking Works on XYO Layer One

Staking on XYO Layer One is designed to lock $XYO into the network and reward users with $XL1 tokens. This process helps secure the blockchain and maintain smooth operations for data-heavy use cases.

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Key details about XYO staking:

Stake $XYO to earn $XL1: The process locks $XYO tokens and mints $XL1 rewards over time.
Utility of $XL1: $XL1 is used to pay gas fees, process transactions, reward node operators, and support blockchain functions.
Governance and value retention: $XYO continues to serve as the governance token, aligning incentives and supporting long-term ecosystem growth.
Reward structure: Early stakers receive higher $XL1 emissions, which gradually decline over time.

The Staking Model Follows a Clear Flow

The staking process is designed to keep the network secure and fair for all participants. It works through several key steps.

Staking and delegation: XYO users stake $XYO tokens, which are delegated to validator nodes responsible for validating new blocks.
Block rewards: When a block is produced, $XL1 block rewards are generated and distributed to stakers from the step reward pool.
Gas fees and burning: Gas fees paid in $XL1 are partially burned (base fee), keeping supply balanced and adding a deflationary effect.
System staking option: Users who do not run validator nodes can still stake $XYO through system staking (nodeless staking) and earn $XL1 rewards.
Slashing penalties: Validators or stakers that act maliciously are penalized, with slashed tokens returned to the reward pool to reward honest participants.
Aligned incentives: This design connects network security, rewards, and token value, encouraging honest participation and ecosystem growth.

XYO shared with CCN that, “this model creates a practical blockchain framework capable of supporting DePIN, AI, and other demanding, data-focused applications.”

Step-By-Step Guide To Staking XYO

Staking $XYO on XYO Layer One is straightforward. Users should follow these steps:

Get $XYO tokens: Users can purchase $XYO from major exchanges such as Coinbase, Kraken, KuCoin, or Bitpanda. After purchase, tokens should be stored in a self-custodial wallet that supports XYO staking (to maintain full control of staked assets).
Connect to the XYO staking portal: Access XYO Layer One’s official staking interface and ensure the wallet holding $XYO is supported.

Choose staking amount and duration: Select how many $XYO tokens to lock into the staking contract. The more tokens staked, the greater the $XL1 rewards. Users can stake through validator nodes or system staking (nodeless staking), with system staking earning slightly smaller rewards. Authorize the amount.
Confirm staking transaction: Once staked, users become eligible to earn $XL1 rewards according to the network’s reward schedule.

Why Stake $XYO?

Staking $XYO gives users more than just rewards. It creates a way to support the XYO network while unlocking new opportunities in its ecosystem.

Benefits of Staking $XYO

Passive rewards: Earn $XL1 tokens without trading or selling $XYO.
Support network security: Strengthens XYO Layer One and ensures reliable data validation.
Long-term value: Locked tokens reduce circulating supply, which can reduce circulating supply and potentially limit sell pressure.
Governance participation: Stakers get a voice in shaping the XYO ecosystem’s future.

While staking can be rewarding, it also comes with risks that users should understand before committing their tokens.

Risks of Staking $XYO

Token lock-up: Staked $XYO may be inaccessible for a set period.
Market volatility: $XYO and $XL1 prices can rise or fall, affecting returns.
Smart contract risks: Staking contracts can face technical or security vulnerabilities.
Reward reduction: $XL1 emissions decrease over time, lowering future yields.

These risks mean users should evaluate their time horizon, risk tolerance, and staking strategy before committing funds.

Conclusion

XYO has created a practical solution for data-heavy industries by launching its own Layer One blockchain. This network is designed to process high volumes of real-time data with low latency, supporting applications across DePIN, AI, and tokenized assets.

Staking $XYO allows users to earn $XL1, strengthen network security, and take part in governance decisions. The dual-token model separates long-term value from utility, ensuring $XYO retains its role in governance while $XL1 manages everyday blockchain operations.

For participants seeking both rewards and active involvement in the ecosystem, staking provides a way to align with XYO’s long-term growth while contributing to a scalable, decentralized infrastructure for data validation.

FAQs

Can users delegate XYO to validators?

Yes, users will be able to delegate their $XYO to validator nodes and earn a share of $XL1 rewards.

What happens to gas fees on XYO Layer One?

Gas fees are partially burned, keeping $XL1 supply balanced and adding a deflationary effect.

How does slashing work on XYO?

Malicious validators lose part of their staked $XYO, and the slashed tokens are returned to the reward pool.

Is system staking available for non-validators?

Yes, users can stake without running a node and still earn $XL1, though at slightly lower rewards

About the Author

Dr. Lorena Nessi

Dr. Lorena Nessi is an award-winning journalist and media technology expert with 15 years of experience in digital culture and communication. Based in Oxfordshire, UK, she combines academic insight with hands-on media practice.

She holds a PhD in Communication, Sociology, and Digital Cultures, and an MA in Globalization, Identity, and Technology.

Lorena has taught at Fairleigh Dickinson University, Nottingham Trent University, and the University of Oxford. She is a former producer for the BBC in London, with additional experience creating television content in Mexico and Japan.

Her research focuses on digital cultures, social media, technology, capitalism, and the societal impact of blockchain innovation.

She has written extensively on digital media and emerging technologies, with her work featured in both academic and media platforms. Her Web3 expertise explores how blockchain technologies shape culture, economics, and decentralized systems.

Outside of work, Lorena enjoys reading science fiction, playing strategic board games, traveling, and chasing adventures that get her heart racing. A perfect day ends with a relaxing spa and a good family meal.

[email protected]

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