OKX Launches ‘X1’: New Layer 2 Network with Polygon’s Cutting-Edge Tech, Joining Crypto Exchange Innovation Wave
Leading crypto exchange, OKX, has announced the launch of the testnet of its new layer 2 network, known as X1, built in collaboration with Polygon Labs.
X1 is being built using Polygon Labs’ recently released Chain Development Kit (CDK) and will take advantage of zero-knowledge technology to enhance security and scalability while reducing transaction costs.
It follows the launch earlier this year of Coinbase’s layer 2, Base, and reports that Kraken is also considering a layer 2 network, and further establishes exchange-built layer 2s as an emerging trend in the crypto industry.
According to OKX’s roadmap, the X1 mainnet will launch in Q1 of 2024.
OKX Seeking to Innovate, Drive Web3 Adoption
In its announcement OKX claims X1 is being built with a developer-first philosophy, ensuring it’s a platform that’s easy for third-party developers to build on. The exchange says the network will connect its “more than 50 million users with the Polygon and the Ethereum communities.”
OKX also said the network would give developers full access to its on-chain ecosystem, which the exchange hopes will lead to the creation of innovative new dApps and web3 experiences.
According to Jason Lau, OKX’s Chief Innovation Officer, this approach is intended to further drive web3 adoption:
This scalable and accessible network is perfect for developers, who can build on X1 to deliver user friendly world-class consumer Web3 applications, all while maintaining interoperability with other networks and ecosystems. By collaborating with Polygon Labs, we look to bring more builders, more use cases, and ultimately the mass adoption of Web3.
As part of the collaboration with Polygon Labs, OKX’s development team will also become core contributors to the Polygon CDK, which will provide a significant boost to Polygon’s ongoing development efforts.
The gas fees for X1 will be paid using OKX’s own OKB token.
Centralised Exchange Layer 2s Becoming A Trend
X1’s launch is part of an emerging trend in the crypto industry of centralised exchanges creating their own layer 2 networks. In August Coinbase launched its layer 2 built using Optimism’s OP Stack and there’s talk Kraken may be building a layer 2, possibly also on Polygon.
This trend seems to be driven primarily by a desire for centralised exchanges to grow their user bases beyond seasoned crypto users and to find new sources of revenue through network fees and the monetisation of dApps.