Blockchain and cryptocurrencies offer practically limitless options to a wide range of users. However, until recently, many protocols were separate and couldn’t ‘talk’ to each other. This divided the crypto user base without improving the overall user experience and limited what developers could create.
Potential solutions like the IBC (Inter-Blockchain Communication Protocol) have been introduced to address this issue. While the IBC facilitates communication among Cosmos SDK builders, it offers no options to those outside the Cosmos ecosystem.
Developers and application builders must perform extensive engineering work and understand different communication protocols to integrate their dApps across blockchain ecosystems.
In this case, Axelar Network comes in handy. Axelar provides secure cross-chain communication for Web3 to allow developers to create a comprehensive cross-chain experience and enable users to interact with any asset, application, or chain with a single click.
This article comprehensively examines the Axelar network, its operating mechanisms, and its role in the Web3 space.
An Overview of the Axelar Network
Axelar provides Web3 users with secure cross-chain communication. With a single click, dApps users can interact with any asset or application on any chain.
In a nutshell, the Axelar network is a blockchain that connects other blockchains to enable global Web3 interoperability. The network is secured by Proof-of-Stake consensus, and permissionless protocols are used for message translation and routing. Axelar has been dubbed the “Stripe of Web3.”
- A collection of software development kits (SDKs) and application programming interfaces (APIs).
- A decentralized network of validators.
- Secure gateway contracts.
- Consistent translation.
- Routing architecture to support blockchain composability.
This allows developers to build on the platform that is best suited for their use case, in addition to having access to users, assets, and apps in every other ecosystem.
They can leverage a network design that offers a unified code base and governance framework in place of pairwise cross-chain bridges. Axelar’s ultimate objective is to create the foundational infrastructure required to onboard the next billion Web3 users.
To achieve this objective, Axelar will:
- Allow blockchain developers to connect to and interact with other chains easily.
- Allow cross-chain composability for dApp developers.
- Allow for seamless user interaction with applications across ecosystems.
The Axelar SDKs offer a complete package for developing Web3 applications, ensuring that developers have access to the resources they need.
Using these APIs and tools in conjunction with the Axelar network and SDKs, developers can create dApps that are quickly deployable across all ecosystems connected to Axelar. In other words, Axelar streamlines cross-chain interoperability to a minimal number of API queries.
Axelar Project Development
In 2021, the Axelar team made significant progress laying the groundwork for the Axelar Platform. This platform enables all blockchains to collaborate globally by connecting them via a decentralized network and an SDK with protocols and APIs.
The Axelar Testnet for programmers and the Quantum Community Program for non-technical community members were both introduced by the team in 2021. The Axelar Academy was further established by members of the Axelar community.
The Axelar Mainnet Rollout began on January 11, 2022, and Satellite was launched on January 26, 2022. Satellite was one of the first ecosystem apps to run on the Axelar Network. Users can use this decentralized cross-chain asset transfer app to send assets they own on one chain to an address on another.
How Does Axelar Work?
Axelar has implemented the Axelar Gateway, through which a user sends a payload in the language of the originating blockchain (e.g., Solidity in Ethereum).
The payload is recognized by an Axelar network relayer, which notifies the Axelar validators that it is ready for collective signing (e.g., a cross-chain transfer from a user).
At this point, validators have reached an agreement on what to do with the user payload that has arrived at the source chain’s gateway (e.g., Ethereum). The validators unwrap the payload before deciding what to do with it and how to route it (e.g., what network to send the payload to).
The Axelar network’s weighted threshold signature scheme, to which validators adhere, assigns each validator a percentage of the total shares required to generate a signature equal to the amount of AXL (the Axelar network’s token) invested with them.
A gateway, for example, may require a certain number of signatures before signing a payload. If validators representing a minimum portion of the network’s stake sign the payload, a consensus is reached that allows the payload to be processed on a destination chain.
If this is a cross-chain transfer, the destination chain can execute a payload that mints tokens to represent the tokens locked up on the source chain. However, the Axelar network can facilitate more complex interoperability exchanges.
Axelar’s Approach to dApp Development
When we talk about interoperability, it’s important to understand that an entire set of solutions and protocols must be developed. We’re not just talking about the protocol that allows users to deliver assets but rather a variety of protocols.
For instance, some protocols are at the very bottom of the layer and are only responsible for delivering messages and finalizing transactions on one level.
As a result, there are application-level protocols that users can interface with to compose with other ecosystems if they create their applications on one blockchain.
However, Axelar is also considering and developing a set of protocols that applications can directly integrate with.
Axelar is working to create a similar set of protocols and standards at the application level, where an application developer can make calls to interact with assets from other ecosystems or execute a call to perform smart contract functionality on a different blockchain.
How Axelar Works in DeFi
The primary objective of the Axelar token is to create a sustainable ecosystem for all parties. Axelar intends to provide DeFi blockchain developers with more control. Axelar is collaborating with other DeFi projects to provide DeFi blockchain developers with this type of composability, cross-chain support, and liquidity across many ecosystems.
Governance tokens are a natural feature of Proof-of-Stake networks because they offer a mechanism for civil resistance that enables users to pay transaction fees when they transact, use the protocol, and gain various incentives for participating in the Axelar ecosystem.
The Axelar protocol, as a decentralized network, will logically include a governance token that will support the protocol and allow users to stake to run validator nodes, pay transaction fees, and other things.
Axelar will contribute across the entire stack, from the first protocols to tools, to make it as easy as possible for developers to use this multi-chain ecosystem in the future.
Getting Started With the Axelar Network
Here are some resources to help you get started developing cross-chain applications with Axelar:
- Axelar is a decentralized and permissionless interoperability network created with the Cosmos SDK with a combination of features, including many-to-many connectivity, programmability, composability, and Proof-of-Stake security.
- It is currently the most reliable interoperability network currently available to users. Axelar’s native token (AXL) is used for governance and compensating validators to carry out cross-chain intent. AXL is also used to secure the Proof-of-Stake network.
- The use cases that Axelar will open up include interfacing cross-chain with other blockchains that may not speak the same language as the user’s source blockchain and other as-yet-unseen scenarios.
- Since a variety of applications are presently being developed on top of Axelar to take advantage of the powerful features of the interoperability network, the cross-chain user experience promises to be smooth.
- Users who access Web3 through one blockchain can easily access resources and apps on other blockchains, possibly without even being aware of it.
- Axelar employs centralized bridges and interoperability networks to solve problems and provide users with the safest, most secure, and best cross-chain user experience possible.
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