What Is Axelar?

What Is Axelar?

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Dərc edilmişdir Apr 11, 2024Yenilənib Apr 23, 2024
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Key Takeaways

  • Axelar is the unifying Web3 platform – the fastest way to scale applications across many blockchains.

  • Rich interoperability across multiple networks emerged on the internet in the early 2000s. It enabled a leap forward, supporting new industries like social media and the gig economy. Axelar is that leap forward for Web3 – the connective tissue for a similar phase of value creation.

  • Imagine a powerful layer-one blockchain, running a secure, global transport system that is chain-agnostic, reaching 10X as many active blockchain users. Among cross-chain networks, Axelar stands out with support for smart contracts on a Turing-complete cross-chain layer. Developers can self-plug-in and automate integrations of their chains and host application logic on Axelar network, allowing instant interop and scale across all of Web3.

What Is Axelar?

As a blockchain that connects other blockchains, Axelar stands out among blockchain interoperability networks and cross-chain bridge providers. As a blockchain, it establishes a smart (programmable) transport layer, capable of running smart-contract logic. This allows the Axelar network to automate tasks and abstract away complexities for both developers and end users – sometimes known as chain abstraction.

Cross-chain bridges and other cross-chain networks are dumb pipes. With Axelar network as a smart transport layer, the blockchain layer becomes:

💡 Abstracted for the user. With General Message Passing, applications send any payload & trigger multiple function calls across chains, enabling one-click UX.

💡 Abstracted for the app developer. The Axelar Virtual Machine automates complex tasks involved in managing token supply on multiple chains.

In a recent overview, Messari analyst Red Sheehan summarized Axelar as follows:

  • Axelar goes beyond bridges, delivering a programmable interoperability layer.

  • Axelar VM will expand Axelar’s lead in connected chains by enabling permissionless new-chain connections.

  • Axelar’s Interchain Token Service enables tokens to move natively between blockchains, replacing bridges.

  • New AXL tokenomics support expansion to hundreds of blockchains by decreasing the rate of inflation per added chain.

The Axelar tech stack

The Axelar network tech stack, pictured above, has three key components across two functional layers.

1. Decentralized verification

A dynamic set of 75 validators maintain the network and execute transactions, running the cross-chain gateway protocol – a proof-of-stake consensus overlay that connects various blockchains.

2. Gateway smart contracts

Gateways are smart contracts on each of Axelar’s 60 connected blockchains. Gateways receive incoming transactions on sender chains, and write on receiver chains – once the transaction is approved by validators.

3. APIs and developer tools

Developers interact with Axelar via a simple set of APIs and developer tools in the application-development layer atop the stack. It includes services like:

  • Axelar Gas Services, which automate conversions into AXL and destination-chain gas tokens.

  • One-time deposit addresses, which automate routing, allowing applications to expose a simple deposit address -- the same onramp used by centralized exchanges, but completely decentralized.

  • Developer tool suites such as Interchain Token Service, enabling developers to issue and manage Interchain Tokens, which maintain their fungibility and custom functionality, cross-chain.

Who Uses Axelar?

Top teams trust Axelar for decentralized security and reduced overhead – a “Kubernetes for Web3.” Axelar delivers a simple API and a permissionless ecosystem of tools and services to access multiple blockchains as if they were building on one. Early backers include Binance, Coinbase, Dragonfly, Galaxy and Polychain.

Axelar allows developers to deploy, debug and maintain code easily, while scaling natively to any blockchain, reducing risk and preventing vendor lock-in. Top teams building with Axelar include:

  • Critical DeFi applications like Lido and Uniswap.

  • Groundbreaking platforms like Celestia and Filecoin.

  • Leading blockchain wallets like Ledger and MetaMask.

  • Enterprise and institutional pioneers like Mastercard and Microsoft.

How Does Axelar Compare vs. Other Cross-Chain Networks?

Cross-chain bridges, with their poor UX and security risks, have become synonymous with blockchain interoperability. A new generation of arbitrary message-passing protocols has begun to shift that narrative – e.g., Chainlink CCIP, LayerZero, Wormhole and Axelar’s General Message Passing. How are these platforms different?

CCIP, LayerZero and Wormhole all validate transactions using delegated "proof-of-authority," with multisig setups and a relatively small number of hand-picked signers in place to validate cross-chain transactions. Axelar has a dynamic set of 75 validators – and their participation is truly permissionless. In its recent assessment, Uniswap rejected LayerZero as too centralized to be secure from theft or censorship.

A recent report by Moulik Nagesh and Brian Chen at Binance Research included this table, which helpfully sheds some light on further key distinctions:

Since the publication of this report in November 2023, Axelar has further increased its lead in terms of the number of chains it connects – now more than 60 blockchains are interconnected over the decentralized Axelar network.

Axelar is programmable, secure and scalable

Imagine a powerful layer-one blockchain running a global transport system that is chain-agnostic, reaching 10X as many active blockchain users as the leading Web3 application environment. Axelar is this blockchain: programmable, secure, and scalable.

Axelar is programmable

Axelar is highly programmable. Dumb infrastructure leads to unsustainable developer overhead, plus user experiences (UX) that are disjointed and painful. A blockchain that connects blockchains, Axelar is a smart transport layer, supporting interchain smart contracts to deliver true chain abstraction for both users and developers with minimal overhead.

The Axelar Virtual Machine (AVM) combines the Turing-complete smart-contract development capabilities of Cosmwasm with Axelar’s secure General Message Passing. This smart connective tissue supports developer tooling and even application logic, automating tasks for developers and delivering seamless, fast UX, no matter what blockchain your user is on.

Interchain Token Service

The Interchain Token Service (ITS) is the latest product released to mainnet using Axelar Virtual Machine. Interchain Tokens go cross-chain natively with full fungibility and full ERC-20 custom functionality.

In brief, Interchain Token Service is:

  • No-code: Only Interchain Tokens fully automate permissionless multichain deploy-and-manage.

  • Trustless: Interchain Tokens run on open-source code via smart contracts on a public blockchain secured by a dynamic validator set.

  • Fungible: Issuers choose burn-and-mint or lock-and-mint mechanisms and get canonical versions with the same address.

  • Functional: Interchain Tokens are customizable with features like yield, governance & permissions; they go cross-chain with customizations intact.

As BlockWorks staff writer Macauley Peterson put it in a recent article about ITS:

Referring to a “native chain” in contrast to a “bridged” or “wrapped” version of a token is the status quo today. A new service from general message passing protocol Axelar aims to change that, making it trivially easy to launch tokens on any or all of its supported networks with no coding skills required.

Axelar is secure

Most interoperability solutions operate at a much lower standard of security and decentralization than the chains they connect. Axelar’s cross-chain security approach is open-source and transparent, running battle-tested proof-of-stake verification, plus quadratic voting for further decentralization.

Further layers of risk mitigation include:

Rate limits

Axelar Gateways include a rate-limiting function, which sets an upper bound on the amount of each asset that can be transferred over a set interval of time.

Validator security policies

Axelar has a large validator set in its cross-chain network (75) – setting a high threshold for attackers. Security is further enhanced via key-rotation policies, requiring validators to periodically rotate the keys they use to sign transactions. This prevents persistent attacks.

Public code audits

The Axelar codebase is frequently, thoroughly and publicly audited. Axelar network and contracts are all open-source. We actively encourage comments and revision from white-hat hackers. An active bug-bounty program incentivizes submissions.

Axelar is scalable

Axelar launched to mainnet in January 2022. As of March 2024, Axelar has securely transferred over $8 billion in value and scaled to 60+ blockchain connections.

Comparable cross-chain providers are pairwise, treating each node as a hub – slowing the network’s growth and weakening security. Axelar’s decentralized hub-and-spoke topology allows the network to grow quickly and deliver immediate network effects.

Here’s how BlockCrunch analyst Michaellwy put it in a 2023 article:

Another mental model is to think of Layer Zero as akin to two-way radios, establishing direct connections between two users. In contrast, Axelar operates more like a cellular network, where communication is routed through cell towers (representing the hub) to reach various endpoints. This reflects in its adaptability and configurability.

Today, this infrastructure secures transactions across more connected chains than other interoperability providers. Axelar is truly the shortest path to scale.

The Axelar 2024 roadmap

Axelar is trusted by the top DeFi applications (think Frax and Lido), the top DEXs (think dYdX and Uniswap), the top wallets (think MetaMask, Trust Wallet and blockchain.com) and enterprises leading integration of Web3 (think Mastercard, Microsoft and Onyx by J.P. Morgan).

What’s next for the fast-growing smart transport layer of Web3? Here are some of the developments on the Axelar roadmap for 2024:

  • Axelar Virtual Machine becomes a platform for open-source tools to enable chain-agnostic development, running on decentralized cross-chain infrastructure.

  • Permissionless connections for arbitrary chains via Interchain Amplifier, taking potential network effects out to the 100s of blockchains in the Ethereum L2verse.

  • A gas-burning mechanism is on the AXL token governance roadmap, with the potential to turn the network deflationary, further securing Axelar network.

  • Integrating diverse consensus approaches, including Solana, Stellar, and Move-based chains like Aptos and Sui.

In some ways, 2023 can be seen as just laying the groundwork for what’s to come in 2024. Together, builders in the Axelar network ecosystem are delivering a Web3 that is scalable, programmable and secure – and easier and more powerful than anything that’s come before.

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