From: thepipeline_xyz
Interoperability in the blockchain space has undergone a significant evolution, moving from centralized, insecure bridges to decentralized, secure messaging platforms. Axelar Network, founded by Georgios and Sergey, plays a key role in this transformation by connecting various blockchains and enabling seamless cross-chain interactions [00:30:09].
Axelar Network: An Overview
Axelar is an interoperability network structured as a blockchain that connects 56 blockchains and counting [00:30:40]. It functions as a messaging platform upon which cross-chain applications, such as decentralized exchanges (DEXs), money markets, and NFT marketplaces, can be built [00:38:28]. Axelar is not a bridge itself but provides the infrastructure for bridging [00:30:40].
The Problem with Early Bridges
A few years ago, the interoperability landscape was dominated by centralized bridges like Ren Protocol and MultiChain [00:47:00]. These bridges were prone to single points of failure, where a compromised key held by a centralized entity could lead to the loss of all funds [00:47:00]. This centralization was responsible for major hacks in the DeFi space, including the Harmony, Ronin, and MultiChain incidents, which collectively resulted in billions of dollars lost [00:47:00].
Axelar’s Solution: Decentralized Message Passing
Axelar adopted a different approach by designing a blockchain based on the Cosmos SDK, which features a fully decentralized validator set [01:07:00]. To attack the network and steal funds, a majority of its 75 validators, including major validators from Ethereum mainnet, would need to be corrupted [01:18:00]. This makes Axelar almost as secure as the chains it connects to [01:36:00]. Axelar also offers a “many-to-many” connectivity model, allowing a single connection to the Axelar blockchain to route messages to any other connected blockchain [00:52:00]. This contrasts with competitors like Wormhole, Chainlink CCIP, and Layer Zero, which typically offer only pairwise connectivity, making it harder to add new chains [00:52:00].
Genesis of Axelar: Onboarding and User Experience
The inspiration behind Axelar’s design came from the difficulties in onboarding users and developers to new blockchains like Algorand in late 2019 [01:00:00]. A key problem was the lack of easy ways to bridge assets and users from established chains like Ethereum, where most liquidity resided [01:12:00]. This highlighted that bridging was about more than just asset transfers; it was about improving user experience and abstracting away the complexities of Web3 [01:38:00]. Thus, Axelar was designed as a generalized message-passing platform, enabling developers to build robust cross-chain applications [01:48:00].
Practical Application: General Message Passing (GMP)
Axelar’s General Message Passing (GMP) protocol simplifies cross-chain development [09:22:00]. For developers building on a high-throughput EVM-compatible chain like Monad, GMP allows them to deploy the “brain” of their application on Monad while enabling users from other networks (e.g., Arbitrum, Solana) to interact with it seamlessly [10:06:00]. This eliminates the need for users to perform separate bridging steps, as asset locking and message passing occur together [11:31:00]. This approach also combats liquidity fragmentation, bringing users to a single ecosystem and simplifying development [12:09:00].
Evolution of Builder and User Perspective
The perspective of builders and users regarding interoperability has significantly evolved [15:31:00]. A year ago, many teams were content building on a single chain, not seeing enough value in cross-chain expansion [15:52:00]. Today, the conversation has shifted, with teams immediately planning launches on multiple chains and aiming for broader expansion [16:01:00]. This change is driven by the rapid decentralization of liquidity and users across various chains, making it essential to build for a cross-chain world [16:12:00].
Future Use Cases and Trends in Interoperability
While asset transfers remain a primary use case, the future of interoperability is expected to see a cross-chain version of every single-chain application existing today, along with new, unique use cases yet to be imagined [14:50:00]. Cross-chain gas fees are currently a limiting factor, but as scaling solutions and high-performance chains like Monad reduce costs, cross-chain transactions will become more accessible [14:05:00].
The future of interoperability aims to abstract away the underlying blockchain complexities from the user [31:12:00]. Users should not need to know if their asset is on Solana and the application on Arbitrum; the wallet should seamlessly handle balances across chains and use interoperability infrastructure to pass messages [31:40:00]. This means interoperability will become an integral part of virtually every application, including DeFi, gaming, real-world asset (RWA) tokenization, and NFTs [32:11:00].
Addressing Security Risks
Axelar implements multiple layers of security to mitigate risks:
- Decentralization: A fully decentralized validator set eliminates the most common attack vector seen in centralized bridges [23:16:00].
- 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 period [23:43:00]. This can be customized on the Axelar blockchain, allowing damage to be contained even if an external chain breaks [24:09:00].
- Multi-solution Approval: For maximum security, applications can require approval from multiple independent interoperability solutions. For example, the Lido community decided to work jointly with both Axelar and Wormhole, requiring approval from both validator sets before an asset is minted [24:49:00]. This creates three layers of security: two independent implementations plus stackable rate limits [25:29:00].
Axelar’s Interchain Token Service (ITS)
The Interchain Token Service (ITS) is a beta product from Axelar that offers code-free, permissionless tokenization and bridging [18:40:00]. It allows anyone, from meme coin creators to large projects, to launch a token that is cross-chain from day one with robust security [19:07:00]. For instance, Frax, which previously managed its own native bridge, now partners with Axelar to issue Frax assets on chains not supported by Frax Ferry [19:39:00]. This indicates a broader industry trend where projects rely on specialized interoperability providers instead of managing cross-chain asset issuance themselves [20:01:00]. ITS aligns with the ethos of decentralization and permissionlessness, enabling anyone to make their token cross-chain in minutes [20:41:00].
Axelar and Monad Collaboration
Axelar has shown early commitment to supporting Monad, driven by the Monad team’s technical expertise, the community’s excitement, and demand from builders [28:27:00]. Axelar aims to be available on Monad from day one, recognizing that for an interoperability platform, enabling developers on new chains is crucial for capturing new opportunities [30:07:00]. Monad’s EVM compatibility and instant finality are particularly exciting for Axelar, as instant finality is crucial for cross-chain applications [16:50:00]. Chains with instant finality, like Monad, significantly improve user experience by reducing message passing times from 15-20 minutes (on Ethereum) to 60-90 seconds [17:02:00]. This speed will foster the growth of more cross-chain applications [17:38:00].