From: thepipeline_xyz
Axelar is an interoperability network structured as a blockchain that connects various other blockchains, currently supporting 56 and counting [03:30:19]. It functions as a messaging platform upon which developers can build applications, rather than being a bridge itself [04:30:30]. These applications can range from cross-chain decentralized exchanges (DEXs) to money markets and NFT marketplaces, spanning across different blockchains [04:42:01].
Founding and Inspiration
Axelar was co-founded by Georgios Vlachos and Sergey Gorbunov [00:37:34]. Both met at MIT and were part of the founding team of the Algorand blockchain, which aimed to be faster than Ethereum [00:46:27]. Georgios’s inspiration for entering the blockchain space came from the financial crisis in Greece, where it was difficult to send remittances or access bank funds [01:18:23]. The idea of a censorship-resistant financial system resonated with him, where anyone could seamlessly transact from a cell phone [01:35:05].
At Algorand, Georgios designed the consensus protocol, while Sergey led the standardization of BLS signatures, now a core signature scheme securing Ethereum 2.0 [02:01:21]. Their combined experience in building secure infrastructure spans about seven years [02:22:20].
The impetus for Axelar’s design stemmed from the challenges faced when launching Algorand in late 2019 [07:51:00]. It became clear how difficult it was to onboard users and developers due to existing liquidity being on Ethereum and the lack of easy bridging solutions [07:57:00]. The founders realized that bridging was more than just asset transfers; it was about abstracting away the complexities of Web3 for a better user experience [08:35:28]. This led to the creation of a generalizable message passing platform rather than a simple bridge [08:48:00].
Key Differentiators and Architecture
Axelar stands out from competitors like Wormhole, Chainlink CCIP, and LayerZero due to two primary differentiators [05:11:47]:
- Many-to-Many Connectivity: Axelar’s blockchain-based architecture allows for a single connection point to the Axelar blockchain, enabling messages to be routed to any of the other connected blockchains [05:22:00]. This contrasts with competitors who typically offer pairwise connectivity, making it harder to add new chains and often limiting connections to a subset of chains [05:43:00].
- Decentralization and Security: Designed using the Cosmos SDK, Axelar has a fully decentralized validator set of 75 validators [06:07:00]. To attack the network and steal funds, a majority of these validators would need to be corrupted [06:25:00]. Axelar’s security is comparable to the chains it connects to, and it is considered five times more decentralized than some competitors [06:36:00].
Developer Experience with General Message Passing (GMP)
For developers building on Monad who want to allow users from other networks to interact with their applications, Axelar’s General Message Passing (GMP) simplifies the process [10:06:00]. Instead of redeploying on numerous chains, developers can have the core logic of their application on a fast EVM chain like Monad [10:08:00].
For instance, a decentralized application (dApp) developer would deploy a small piece of code on an origin chain (e.g., Arbitrum) and connect it to Axelar’s endpoint on that chain [10:40:00]. This allows direct interaction between users on the origin chain and the dApp’s core on Monad, abstracting away the bridging step [11:31:00]. Developers can send their first message through Axelar documentation within about 10 minutes [11:46:00]. This approach centralizes logic on one chain, preventing fragmentation and simplifying development [12:17:00].
Evolution and Future of Interoperability
The perception of cross-chain development has drastically changed [15:52:00]. Previously, teams were content with being on a single chain, but now, launching on multiple chains with plans for more is standard [16:01:00]. The rapid shift in liquidity and user bases across chains necessitates a cross-chain building strategy [16:26:00].
While many current interoperability use cases are still focused on asset transfers [13:26:00], this is largely due to the early stage of the industry and high cross-chain gas fees [13:35:00]. As scaling solutions reduce gas costs and chains like Monad offer faster transaction finality, cross-chain transactions will increase exponentially [14:05:00].
Axelar anticipates that every single-chain application will eventually have a cross-chain version, along with entirely new cross-chain use cases [14:59:00]. One of the most exciting products enabling this future is Axelar’s Interchain Token Service (ITS) [18:17:00].
Interchain Token Service (ITS)
The Interchain Token Service, currently in beta, is a code-free, permissionless tokenization and bridging solution [18:30:00]. It allows anyone, from meme coin creators to large projects, to launch a token across multiple chains from day one with the ability to scale to any future chain Axelar supports [19:07:00]. An example is the partnership with Frax, which now relies on Axelar to issue Frax assets on chains not supported by their native Frax Ferry bridge [19:39:00]. This service aligns with the ethos of the space by being fully permissionless, anonymous, and decentralized [20:41:00].
Mitigating Risk in Interoperability
Axelar addresses challenges and solutions in blockchain bridging and the risks of interoperability through multiple layers of security [22:06:00]:
- Decentralization: As a decentralized network, Axelar mitigates the most common attack vector seen in centralized bridges, which have resulted in billions of dollars in losses [23:16:00].
- Rate Limiting: Axelar incorporates rate limiting, a simple code check that minimizes the impact of a hack by limiting the amount of funds that can be moved within a certain time frame [23:46:00]. This can be customized on the Axelar blockchain, containing damage even if a connected chain breaks [24:09:00].
- Multi-Provider Approval: For enhanced security, applications can require approval from multiple independent cross-chain solutions [24:42:00]. For example, Lido’s community voted to work jointly with both Axelar and Wormhole, requiring approval from both validator sets before an asset is minted, creating three layers of security [25:00:00].
Axelars partnership with Monad
Axelar publicly committed early support for Monad due to strong belief in the team and technology [28:09:00]. The founders of Axelar and Monad (Keone and Eunice) connected approximately two years prior to the podcast [28:30:00]. The shared MIT connection and the technical founders’ clear vision for solving scalability issues were key factors [29:07:00].
Axelar recognizes Monad’s instant finality as crucial for cross-chain applications, significantly improving user experience by reducing message passing times from 15-20 minutes on Ethereum to 60-90 seconds [16:57:00]. The excitement within the community and demand from builders to launch on Monad solidified Axelar’s commitment to be available on the chain from day one [29:50:00].
Vision for the Future of Interoperability
Axelar believes that interoperability is not a single “killer use case” but rather a fundamental layer that will integrate with virtually every application in the space, making Web3 as easy to use as Web2 [31:10:00]. The goal is to abstract away the underlying blockchain complexities from the user, allowing them to focus only on assets and applications [31:38:00]. In the future, a wallet might aggregate a user’s total balance of an asset across different chains and use interoperability infrastructure to seamlessly pass messages across networks [31:50:00]. Axelar expects interoperability to be ubiquitous across DeFi, gaming, real-world asset tokenization, and NFTs within the next four years [32:11:00].
Perspectives on the Future of Crypto
In the long term, success in crypto is driven by strong technology and a robust community, rather than fleeting narratives [34:33:00]. Projects like Monad exemplify this combination [34:41:00]. It is crucial for individuals and projects to maintain their convictions amidst market noise and hype, especially as the industry heads into future bull markets [35:59:00].