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3. Advanced Course

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  1. 1. What is Taproot?
  2. 2. Blockchain bridges – what are they?
  3. 3. What is the 51% attack on blockchain?
  4. 4. Zero-knowledge proof – a protocol that respects privacy 
  5. 5. What is EOSREX?
  6. 6. Mirror Protocol – what it is? 
  7. 7. What is DAO, and how does it work?
  8. 8. What is spoofing in the cryptocurrency market? 
  9. 9. What is digital property rights in NFT?
  10. 10. How to verify a cryptocurrency project – cryptocurrency tokenomics 
  11. 11. What is Ethereum Plasma?
  12. 12. What is Ethereum Casper?
  13. 13. What is Selfish Mining? 
  14. 14. How to create your own NFT? 
  15. 15. Schnorr signatures - what are they? 
  16. 16. What is Zk-SNARK and Zk-STARK? 
  17. 17. What is Proof of Elapsed Time (PoET)?
  18. 18. MimbleWimble - what is it? 
  19. 19. What are ETFs and what role do they play in the cryptocurrency market? 
  20. 20. What are synthetic assets? 
  21. 21. Definition of DeFi, and what are its liquidations?
  22. 22. New identity system - Polygon ID
  23. 23. What is Ethereum Virtual Machine (EVM) and how does it work?
  24. 24. Ethereum Foundation and the Scroll protocol - what is it?
  25. 25. What is Byzantine fault tolerance in blockchain technology?
  26. 26. Scalability of blockchain technology - what is it?
  27. 27. Interchain Security - new Cosmos (ATOM) protocol
  28. 28. Coin Mixing vs. Coin Join - definition, opportunities, and threats
  29. 29. Soulbound Tokens - what are they, and how do they work?
  30. 30. Definition of LIDO - what is it?
  31. 38. What is Web3 Infura?
  32. 39. Mantle - Ethereum L2 scalability - how does it work?
  33. 40. Polygon zkEVM - everything you need to know
  34. 41. What is Optimism (OP), and how do its roll-ups work?
  35. 42. What are RPC nodes, and how do they work?
  36. 43. SEI Network: everything you need to know about the Tier 1 solution for DeFi
  37. 44. Types of Proof-of-Stake Consensus Mechanisms: DPoS, LPoS and BPoS
  38. 45. Bedrock: the epileptic curve that ensures security!
  39. 46. What is Tendermint, and how does it work?
  40. 47. Pantos: how to solve the problem of token transfer between blockchains?
  41. 48. What is asymmetric encryption?
  42. 49. Base-58 Function in Cryptocurrencies
  43. 50. What Is the Nostr Protocol and How Does It Work?
  44. 51. What Is the XDAI Bridge and How Does It Work?
  45. 52. Solidity vs. Rust: What Are the Differences Between These Programming Languages?
  46. 53. What is a Pinata in Web 3? We explain!
  47. 54. What Is a Real-Time Operating System (RTOS)?
  48. 55. What Is the Ethereum Rinkeby Testnet and How Does It Work?
  49. 56. What Is Probabilistic Encryption?
  50. 57. What Is EIP-4337? Will Ethereum Account Abstraction Change Web3 Forever?
  51. 58. What are smart contract audits? Which companies are involved?
  52. 59. How does the AirGapped wallet work?
  53. 60. What is proto-danksharding (EIP-4844) on Ethereum?
  54. 61. How to Recover Cryptocurrencies Sent to the Wrong Address or Network: A Practical Guide
  55. 62. MPC Wallet and Multilateral Computing: Innovative Technology for Privacy and Security
  56. 63. What is decentralised storage and how does it work?
  57. 64. Quant Network: scalability of the future
  58. 65. What is StarkWare, and recursive validity proofs
Lesson 44 of 58
In Progress

51. What Is the XDAI Bridge and How Does It Work?

The XDAI bridge is an integral part of the Gnosis DAO. Gnosis itself appeared on the market back in 2015 in the form of a decentralized predictive marketplace. Initially, the project was intended to be an independent blockchain platform. However, the team behind Gnosis identified another need: to develop tools that can support the Ethereum ecosystem.

This is how Gnosis DAO and XDAI came together and developed the Gnosis Chain. It is a sidechain, or Layer 2 solution, that solves Ethereum’s scaling problem. Gnosis Chain is an executive layer EVM chain. It bases its operation on XDAI stablecoin, which facilitates transactions and fees.

What is the significance of the XDAI bridge for Gnosis Chain? How are the two ecosystems dependent on each other and how do they work together? The following lesson will answer these questions.

Gnosis Chain

Before we move on to discuss XDAI, we need to explain to you what Gnosis Chain is. It is the first blockchain in which XDAI is the main operating currency.

The ecosystem itself uses a dual token model, with XDAI and STAKE tokens. XDAI is used for transaction fees, and the STAKE token is an important element in achieving consensus in the ecosystem. The STAKE token uses the DPoS (Delegated Proof of Stake) consensus in its operation. It is a multichain token. On the other hand, we have the XDAI token, which is a derivative of the DAI token and is pledged at a 1:1 ratio to USD. XDAI runs on the Gnosis sidechain, while DAI runs on the Ethereum mainnet.

Bridges play an important role in the Gnosis chain. The ecosystem uses native bridges to transfer tokens and data. Native bridges, such as Omnibridge and those for XDAI conversion, for example, are an important part of the Gnosis chain architecture.

Moreover, within the Gnosis ecosystem, we have three fundamental types of bridges: native bridges, third-party bridges, and application-specific bridges. Native bridges are developed specifically for the Gnosis chain and play a crucial role in minting and burning native tokens. Third-party bridges facilitate the exchange of tokens for canonical tokens, which are generated on native bridges. Conversely, application-specific bridges are custom bridges provided by certain applications to uphold their unique canonical tokens on the Gnosis Chain.

The two native bridges in the Gnosis chain are the aforementioned Omnibridge and XDAI Bridge. Both of the bridges perform different functions.

What Is XDAI Bridge and How Does It Work?

This is the native DAI bridge between Gnosis Chain and Ethereum. This bridge is crucial for minting and burning XDAI, the native currency of Gnosis Chain.

The process begins with network users minting DAI tokens, which can be done through the Maker protocol or by purchasing DAI on an exchange. These acquired tokens are then deposited onto the XDAI Bridge. The Bridge initiates a notification to the Gnosis Chain contract, which subsequently communicates this notification to the block reward contract. As a result, the consensus algorithm mints XDAI tokens directly to the user’s corresponding Gnosis address, completing the transaction.

The XDAI bridge works on the principle of generating bridge revenue by depositing a certain portion of DAI stablecoins in protocols such as Compound and Aave. At this point, about 1 million DAI has been locked up in reserves, while the remaining stablecoin balance helps generate revenue. The profits generated this way go into the GnosisDAO vault, which are then used to develop Gnosis.

Note that the XDAI chain utilizes the ERC-20 function for the Native Token Bridge in its operations. This functionality offers users fast, cost-effective, and stable transactions. Through this bridge, it is possible to convert DAI, which is an ERC-20 stable token in the core network, into XDAI, which exists within a compatible chain.

XDAI tokens transformed in this way are sent quickly and truly at minimal cost on the XDAI network. The XDAI bridge and the entire chain has been a breakthrough success in the Ethereum ecosystem.


At the beginning of its existence, mainly connected with the Gnosis Chain bridge. It can also be said that XDAI is a very important element in strengthening the entire Gnosis ecosystem. As the native currency of the Gnosis Chain, XDAI is a key element and allows us to determine how the other tokens work in the chain.

In addition, combining DAI on Ethereum with XDAI on Gnosis gives users even more opportunities to use these tokens, as well as the entire ecosystem.

Complete today’s lesson!

  1. What Is Ethereum? [BASIC LEVEL]
  2. Types of Proof-of-Stake Consensus Mechanisms: DPoS, LPoS, and BPoS [MASTER LEVEL]
  3. What Is the Ethereum Virtual Machine (EVM) and How Does It Work? [MASTER LEVEL]