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docs/learn/xdc-architecture.md

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# XDC Network Architecture
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This document explains the technical architecture of XDC Network, including its hybrid design, consensus mechanism, and key components.
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The XDC Network is a **Layer-1**, **EVM-compatible hybrid blockchain** architecture designed to support both public decentralization and private enterprise requirements.
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**It combines:**
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- Public blockchain transparency
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- Private/permissioned network privacy
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- Enterprise-grade interoperability and compliance
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This hybrid design enables XDC to serve trade finance, tokenization, payments, and regulated financial infrastructure use cases.
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## Overview
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XDC Network is an **enterprise-grade hybrid blockchain** that combines:
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- **Public Network**: Open, permissionless mainnet
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- **Private Subnets**: Permissioned networks for enterprises
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- **Interoperability**: Cross-chain communication between networks
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```mermaid
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flowchart TB
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subgraph "XDC Ecosystem"
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subgraph "Public Layer"
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A[XDC Mainnet]
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B[108 Masternodes]
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end
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subgraph "Private Layer"
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C[Enterprise Subnet 1]
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D[Enterprise Subnet 2]
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end
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subgraph "Bridge Layer"
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E[XDC Zero]
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F[Checkpoint Contract]
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end
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end
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B --> A
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C --> F
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D --> F
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F --> A
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E --> A
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E --> C
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E --> D
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```
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The XDC architecture is built on four foundational principles:
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### 2.1 Hybrid (Public + Private) Architecture
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XDC enables coexistence of public and private states:
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- **Public Layer (Mainnet):**
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- Shared, immutable ledger
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- Global validator participation
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- Transparent transaction verification
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- **Private / Permissioned Layers (Subnets / Enterprise Networks):**
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- Restricted access networks for enterprises
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- Sensitive data remains private
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- Only hashed proofs or checkpoints are anchored to the public chain
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This ensures data privacy + auditability simultaneously, which is critical for regulated industries.
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### 2.2 EVM Compatibility Layer
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The XDC Network is a customized Ethereum-based protocol, enabling:
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- Smart contracts written in Solidity
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- Compatibility with:
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- Web3.js
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- Ethers.js
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- Existing Ethereum tooling
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This allows seamless migration of dApps and developer adoption.
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### 2.3 High-Performance Execution Layer
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The execution environment is optimized for:
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- ~2 second block time
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- Near-instant finality
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- 2000+ TPS throughput
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- Near-zero transaction fees (< $0.0001)
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This performance is achieved through:
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- Efficient validator coordination
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- Optimized block production
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- Lightweight infrastructure requirements
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### 2.4 Enterprise Interoperability Layer
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XDC is designed to integrate with:
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- ISO 20022 financial messaging systems
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- R3 Corda ecosystem
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- Traditional banking and trade systems
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This enables real-world financial system compatibility, not just isolated blockchain execution.
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![image](./image/xdc-architecture1.png)
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## Network Layers
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### Key Features
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```mermaid
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flowchart LR
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A[XDPoS 2.0] --> B[BFT Finality]
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A --> C[Forensic Monitoring]
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A --> D[Penalty Mechanism]
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B --> E[Instant Finality]
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C --> F[Detect Misbehavior]
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D --> G[Slash Bad Actors]
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```
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![image](./image/xdc-architecture2.png)
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| Feature | Description |
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|---------|-------------|
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## Transaction Lifecycle
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```mermaid
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sequenceDiagram
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participant User
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participant Node
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participant Mempool
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participant Validator
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participant Network
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User->>Node: Submit Transaction
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Node->>Node: Validate Tx
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Node->>Mempool: Add to Mempool
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Validator->>Mempool: Select Transactions
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Validator->>Validator: Create Block
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Validator->>Network: Propose Block
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Network->>Network: Validate & Sign
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Network->>User: Transaction Confirmed (~2s)
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```
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![image](./image/xdc-architecture3.png)
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### Transaction Finality
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