Many emerging blockchain ecosystems offer unique, differentiated features that appeal to users and application developers. However, communication between ecosystems is poor and fragmented. To allow applications to communicate across blockchain ecosystems smoothly and seamlessly, I would like to introduce to you a project called Axelar Network.
What is Axelar Network? Axelar Network is a network built using the Cosmos SDK toolkit. Axelar is the basis for building multi-chain dApps and supports cross-chain communication. So what is Axelar Network? Let’s find out in this article!
To understand more about Axelar Network and how it works, you can read the following articles:
- What is LayerZero? LayerZero Cryptocurrency Overview
- Working Mechanism of LayerZero, a New Generation Multi-Chain Bridge
- What is Portal Finance? Overview of Cryptocurrencies Portal Finance
- Bridges: Design, Trade-offs, and Opportunities
What is Axelar Network?
Axelar Network is a network built using the Cosmos SDK toolkit. Therefore, Axelar is a Chain connected to Cosmos and can communicate with projects in the Cosmos ecosystem through the IBC bridge. Axelar operates under the same POS consensus mechanism as Cosmos.
Not only is there connectivity within the Cosmos ecosystem, but Axelar also connects other EVM chains to help those EVM Chains communicate with each other. Communication is through messages transmitted from EVM Chains. Those messages must be agreed upon by Validators to reach the destination chain.
Axelar is the basis for building multi-chain dApps and supports cross-chain communication. Just need the EVM Chains to be connected to Axelar. This is also its weakness when it cannot support platforms such as Solana, Aptos, Near, Sui,… Because of losing that ability, it is difficult for Axelar to compete with LayerZero.
Although it is a message transmission, it applies the Mint and Burn mechanism. This mechanism is still a security problem.
Currently, there are quite a few EVM Chains connected to Axelar such as Ethereum, BNB Chain, Polygon, Avalanche, Fantom, Arbitrum, Moonbeam, Celo, Kava.
The Difference Of Axelar Network
On Axelar there is Stablecoin axlUSDC which is a wrapped asset of USDC on the Ethereum network. When users want to transfer USDC from Ethereum to another network, they need to lock that USDC into a smart contract on Axelar and then mint axlUSDC on the desired network. This is also an intermediary asset for Axelar to transport assets across the chain.
Mechanism of Action
Structure of Axelar Network
Axelar is divided into 3 main parts:
- A Decentralized Network: Powered by a Validator responsible for maintaining the network and executing transactions. It directly operates the cross-chain Gateway, which is a layer above Layer1. They are responsible for performing read and write operations to gateway smart contracts deployed on connected external chains.
- Gateway Smart Contracts: Provides connectivity between the Axelar network and connected Layer1s. The Validator monitors and reads transactions sent from the front-chain Gateway. They then come to an agreement on the validity of that transaction. Once agreed, they transfer the order to the destination chain’s Gateway to perform cross-chain transactions. Validator and Gateway are the core infrastructure layer.
- Developer Tools: Sitting on top of the core layer are APIs and SDKs (libraries and tools that allow developers to access the Axelar network easily). This is the application development layer that developers will use to combine on any two chains in a single step, adding universal interoperability to their blockchains and applications.
Axelar Network’s operating mechanism
Commands or messages transferred from the front-chain dApp will go through the Gateway to reach the Axelar network. Here, Validators will authenticate according to the Pos consensus mechanism. Then pass it to the destination chain dApp through the destination chain’s Gateway.
Overall, the way Axelar works is quite simple. And to support cross-chain asset transfers, Axelar uses the intermediary asset axlUSDC with the Mint Burn mechanism. Specifically, when the user needs to transfer an asset from the start chain to the destination chain. That asset will be converted into axlUSDC, then that amount of axlUSDC will be burned in the first chain to Mint in the destination chain. Finally, it will convert axlUSDC in the destination chain into the asset that the user wants to receive in the destination chain.
With this mechanism, Axelar also supports NFT transportation. But actually this mechanism still has many risks. And especially bridges are always noticed by Hackers.
Development Roadmap
Completed in 2022
- Mainnet Launch: Axelar Network went live in January.
- Series B: Successful Series B funding, closing at a $1 billion valuation.
- Axelar Grant Program: Axelar launched a grant program in March for idea-stage projects with a vision for widespread adoption.
- Cosmos Liquidity: Following the collapse of Terra’s UST stablecoin, Axelar’s infrastructure was used to connect millions of liquid USDC to Cosmos.
- The general message transfer feature launched on the mainnet in May, enabling cross-chain NFT transfers and a one-click cross-chain experience for users.
- Cross-chain NFT: The first cross-chain NFT was minted in Axelar in August.
- Token release: AXL token was released in September.
- Interop Summit: Axelar announced the Interop Summit convening developers who are building for widespread adoption in Web3.
- Strategic partnerships: Axelar has established strategic partnerships with leading blockchain projects and ecosystems in 2022: Arbitrum, Circle, Osmosis, Polygon and Sui,…
- Ecosystem Funding Program: In December, Axelar launched a $60 million ecosystem funding program with leading VCs, to fund Web3 projects under construction.
Plan for 2023
- Interop Summit and lessons about the new ecosystem.
- Axelar Ecosystem Startup Funding Program: There are over 15 Web3 VCs working with the Axelar ecosystem to identify projects being built for mass adoption on the decentralized web.
- New on-chain integration: Axelar has connected 30 of the most dynamic ecosystems in Web3 and will continue to integrate more.
- Universal message passing for Cosmos: Extends universal message passing to the Cosmos chain and dApps, allowing Cosmos and EVM developers to call any function on any chain.
- Combined USDC: Axelar is partnering with Circle to bring liquidity to every application of blockchains on the decentralized Web.
- Integration with non-EVM blockchains: Axelar gateways are being adopted across many different languages: Move, Rust, Solidity, Javascript,… Axelar’s Stellar integration is just the beginning.
Core Team
Sergey Gorbunov: Co-Founder | Engineering
- At the University of Toronto, he successfully obtained bachelor’s and master’s degrees in Computer Science. But he continued to study for a doctorate at Massachusetts Institute of Technology and he completed the course in 2015.
- After completing his doctorate, he started stealthmine. Here he is both Co-Founder and CTO. But he only stayed here for about 2 years.
- After leaving his first startup project, he moved to work as Chief Cryptographer for Algorand. Algorand is a quite famous Layer1 Blockchain in the market. At the same time, he also worked as an Advisor for Private AI.
- In June 2020, he and his colleagues founded Axelar, a Blockchain platform project that supports linking other blockchains.
Georgios Vlachos: Co-Founder
- In 2012, he began studying for a degree in Computer Science at Massachusetts Institute of Technology. Until 2016 he completed his studies. But he did not stop there, he continued to study for a master’s degree in the field at Massachusetts Institute of Technology. And then 1 year later, in 2017, he graduated.
- Immediately after graduating, he was accepted as Head of Mathematics at Algorand. And also here he met Sergey Gorbunov. And the two of them together founded Axelar until now.
Investors
- November 13, 2020: Seed round successfully raised $2.8M from funds such as Coinbase Ventures, Binance Labs, Divergence Ventures, Lemniscap.
- July 15, 2021: Successfully raised $25M Series A round led by Polychain, with participation from a number of other funds such as DragonFly Capital, Galaxy, Lemniscap, Hypersphere Ventures, Divergence Ventures, Robot Ventures, Collab+Currency .
- November 22, 2021: The Strategic round was led by Crypto.com Capital and had participation from Morningstar Ventures, but the amount raised was not announced.
- February 15, 2022: Series B round successfully raised $35M with the participation of DragonFly Capital, Lemniscap, Polychain, Rockaway Blockchain Fund, Blockchange Ventures.
Tokenomics
Overview information about Token Axelar Network
- Token Name: Axelar
- Ticker: AXL
- Blockchain: Ethereum
- Standard: ERC-20
- Contract: 0x467719ad09025fcc6cf6f8311755809d45a5e5f3
- Total supply: 1,040,422,343
Token Allocation
- Company: 29.5% (Core team: 17%, Company operations: 12.5%).
- Backers: 29.54% (Seed: 13.4%, Series A: 12.64%, Series B: 3.5%).
- Community sale: 5%.
- Community programs (insurance fund): 35.96%.
Token Release
Token Use Case
- Security: A consistent incentive model with incentivized staking rewards for operating secure nodes.
- Decentralization: Tokens are distributed across multiple groups of holders who will delegate authority to a decentralized group of validators and contribute to governance decisions.
- Longevity: The token economy is designed to incentivize general maintenance of all important processes related to Axelar (such as block validation).
- Ecosystem growth: The token incentivizes dApp builders to use the Axelar API for cross-chain development.
Exchanges
AXL tokens are traded on many exchanges such as Coinbase, Kucoin, Osmosis, Kraken, BingX.
Axelar Network’s Information Channel
- Website: https://axelar.network/
- Twitter: https://twitter.com/axelarcore
- Medium: https://medium.com/axelar
- Discord:
Summary
Axelar provides solutions for connecting networks, especially EVM Chains. It helps networks come together and interoperate with the Cosmos ecosystem. Axelar’s ecosystem also has the most important pieces of the puzzle. But Crosschain-Bridge technology is still a concern for users.
So I have clarified what Axelar Network is? Axelar Network cryptocurrency overview. Hope this article provides you with a lot of useful information!
