Symbol (XYM): NEM’s Next-Gen Hybrid Enterprise Chain

The Issue of Cross-Chain Interoperability

Historically, public blockchains and private blockchains have tended to use very different architectures. Data transfers and network interactions between these two types of blockchain have often been challenging. Public blockchain networks are usually built to be very secure in the open web environment, which often means lower speeds and higher transaction costs due to extra security protocols that can affect network processes like block confirmation and propagation. In other words, because public blockchains are open to everyone, they need to dedicate significant resources to mitigating possible damage from a wide array of potentially malicious actors in the public space. Also, they are designed to incentivize users to stake nodes or become miners within the system.

In contrast, private blockchains tend to prioritize speed and low transaction costs. They may have more lenient security practices because they function within more secure internal environments. For example, a bank might use a private blockchain to process the money transfers of its clients, and only a few company employees with specific training and clearance might have access to this blockchain. Also, the entirety of the network is within the organization’s ecosystem, meaning it usually isn’t necessary to provide added incentives to encourage staking or mining participation from the outside world.

Given the significant differences between the structure of public and private blockchain networks, direct communication between internal and external chains is oftentimes impractical and usually requires added layers of programming to enable cross-chain compatibility.

The Purpose of Symbol’s Hybrid Blockchain Platform

Symbol provides a single solution that has been constructed specifically to provide hybrid blockchain capabilities to a wide array of organizations. It seeks to provide businesses with the heightened control of a private network as well as the native ability to migrate assets onto a public blockchain when needed. The goal is to help companies benefit from the speed, security, and low transaction fees associated with private blockchains while leveraging the benefits of a public blockchain to expand the scope of their business.

The purpose of Symbol’s hybrid blockchain structure is to enable easy enterprise onboarding aided by built-in cross-chain compatibility. The security benefits, flexible program compatibility, low latency, and high speed of Symbol’s approach are part of how this network seeks to stand out as a viable solution for addressing businesses’ operational requirements.

Technical Structure of the Symbol Crypto Network

Symbol’s system allows for the streamlined development of hybrid software. To expedite this process, Symbol provides a library of application programming interfaces (APIs) that have already been optimized for their protocol. These tools and other plugins are designed to mitigate the risk of various cyber attacks on an organization's network. They are also designed to be compatible with commonly enterprise-adopted programming languages that can often be simpler to integrate with most systems. This breadth of access allows developers to customize solutions in accordance with the needs of their respective organizations. In contrast to blockchain platforms like Ethereum — which uses its own customized programming language called Solidity — New Economy Movement’s (NEM) compatibility with mainstream programming languages may help boost the network’s appeal among enterprises whose developers might not know niche programming languages. In other words, mainstream programming language support can help drive wider enterprise adoption with fewer resources.

The Symbol crypto protocol is constructed in four layers. This design is meant to increase both the resilience and the speed of the system, because a delay within one level will not directly affect the others. This is similar to running four computers that are each plugged into a separate electrical circuit — if one circuit fails, three out of four computers can still run properly. The four-layer structure is an example of how XYM caters to enterprise use cases. In the enterprise world, systems need to operate 24/7. For example, Google averages only a few hours of non-operational time per year (an infinitesimal percentage of its overall operational time).

Each layer can be altered independently, making the system more adaptable and robust. Organizations can choose to keep any private data completely within their own network, protected by their own firewall.  As a result, businesses that plug into Symbol’s public blockchain do not open up their internal system to potential vulnerabilities. The Symbol blockchain also powers cross-chain interactions with popular blockchain projects such as Ethereum and Bitcoin. Developers can utilize this blockchain interoperability feature for a number of cross-chain use cases, including construction of digital assets that are linked to multiple different cryptocurrencies.

XEM Coin to XYM Coin: 1-to-1 Conversion Program

The Symbol blockchain is essentially the next evolution of NEM's N1S1 platform. XYM is the native currency of the Symbol blockchain, while XEM is that of the original NEM N1S1 blockchain. To kickstart the Symbol economy, NEM N1S1 users received one XYM coin for every XEM coin they held during the release period. This was similar to how NEO’s and Ontology’s parent company OnChain distributed Ontology’s ONT tokens to holders of NEO via an airdrop at Ontology’s inception. In other words, after XYM is distributed to XEM crypto holders, these users will be able to buy, sell, and otherwise engage with both cryptocurrencies. This contrasts with many projects’ conversion programs — for example, VeChain’s — which might discontinue the use of its original currency in favor of promoting its new asset. Approximately 7.3 billion XYM will be distributed in this manner upon the public release of the Symbol project, with 1.7 billion XYM being created as block rewards over the next hundred years or so until the fixed total supply of about 9 billion XYM coins is reached.

The Symbol Blockchain’s DeFi Capabilities

The Symbol blockchain’s built-in cross-chain support for additional cryptocurrencies is designed to support decentralized finance (DeFi) functionalities. In other words, Symbol’s crypto network aims to enable enterprises and their developers to build products that collateralize against an increasingly wider base of currencies, develop broader functionalities, and enhance network stability. These features — plus NEM’s unique consensus methodologies and ongoing projects with various government organizations (some of which are outlined in our NEM blockchain overview article) — provide multiple advantages for large organizations and their developers. Given NEM’s initial traction and the additional steps the project has taken to develop new functionalities, Symbol has established itself as one of the space’s notable names that strives to support enterprise adoption of blockchain technology.