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In this paper, we propose a scalable and adaptive multicast forwarding mechanism based on explicit multicast (Xcast). This mechanism optimizes the allocation of forwarding states in routers and can be used to improve the scalability of traditional IP multicast and source-specific multicast. Compared with previous work, our mechanism needs fewer routers in a multicast tree to store forwarding states and therefore leads to a more balanced distribution of forwarding states among routers. We focus on two problems and formulate each of them as an optimization problem. The first problem, referred to as minstate, minimizes the total number of routers that store forwarding states in a multicast tree. The second problem, referred to as balancestate, minimizes the maximum number of forwarding states stored in a router for all multicast groups, which is proved to be an NP-hard problem. We design a distributed algorithm that obtains the optimal solution to the first problem and propose an approximation algorithm for the second problem. We also prove that the approach adopted by most existing works to allocate forwarding states in the branching routers of a multicast tree is a special case of our mechanism. The simulation results show that the forwarding state allocation provided by previous work is concentrated on the backbone routers in the Internet, which may cause the scalability problem. In contrast, our mechanism can balance forwarding states stored among routers and reduce the number of routers that store the forwarding states for a multicast tree.