DeFi applications need scalability in terms of transactions. So we have xDAI, Ethereum's less decentralized little sister. And xDAI does a good job picking up where Ethereum left off. Anything on Ethereum can be ported to xDAI, so financial apps, DAOs, and non-fungible tokens - anything that needs less security - fits perfectly. xDAI admires and depends on Eth a lot, but feels that Eth can be a little tight at times. Despite their superficial differences, they have the same long-term vision and the same destination, that of a decentralized blockchain future.
How are xDai and Ethereum similar?
Remember that without Ethereum, there is no xDai and the latter is an EVM sidechain. It operates independently of Ether but relies on it for the creation of its native token, the XDAI, as well as its multi-use governance token, the STAKE. The network follows the same protocol updates, block size limits, and EVM settings as Ethereum's mainnet.