From: thepipeline_xyz
This article discusses the collaboration between Monad Labs and Axelar, featuring guests from both teams. From Axelar, Georgios and Jason join the discussion, while Unice, Monad’s COO, and Joey Anthony, Monad’s BD lead, represent Monad Labs [00:00:06], [00:00:09], [00:00:13], [00:00:17], [00:00:20], [00:00:22].
Georgios, a co-founder of the Axelar Network, previously met his co-founder Sergey at MIT [00:00:34], [00:00:38], [00:00:40], [00:00:46]. They were part of the founding team of the Algorand blockchain, which aimed to be faster than Ethereum [00:00:52], [00:00:54], [00:00:56]. Georgios highlights that Monad is tackling “very similar engineering problems” to those they faced at Algorand [00:01:00], [00:01:02], [00:01:05]. His personal inspiration for entering the crypto space stemmed from witnessing the 2012-2015 financial crisis in Greece, which highlighted the need for a censorship-resistant financial system [00:01:10], [00:01:18], [00:01:21], [00:01:23], [00:01:26], [00:01:35].
Axelar: An Interoperability Network
Axelar is designed as an interoperability network, structured as a blockchain that connects various other blockchains [00:03:28], [00:03:30], [00:03:33]. It currently connects 56 blockchains and is continuously expanding [00:03:35], [00:03:36]. Unlike older centralized bridges, which were prone to security breaches and fund losses, Axelar takes a decentralized approach [00:03:47], [00:03:52], [00:03:55], [00:04:10], [00:04:26].
Axelar is not merely a bridge but a messaging platform upon which cross-chain applications can be built [00:04:30], [00:04:33], [00:04:36], [00:04:38]. This includes cross-chain DEXes, money markets, and NFT marketplaces [00:04:42], [00:04:44], [00:04:46].
Key Differentiators
Axelar stands out with two primary differentiators:
- Architecture (Many-to-Many Connectivity): Its blockchain architecture allows for a single, one-off connection to the Axelar blockchain, enabling message routing to any other connected blockchain [00:05:16], [00:05:19], [00:05:22], [00:05:25], [00:05:30], [00:05:33]. This “many-to-many” connectivity simplifies adding new chains, unlike competitors that primarily offer pairwise connections [00:05:41], [00:05:43], [00:05:45], [00:05:47].
- Security (Decentralization): Built on the Cosmos SDK, Axelar boasts a fully decentralized validator set of 75 validators [00:06:05], [00:06:07], [00:06:09], [00:06:11], [00:06:16], [00:06:18], [00:06:22]. To compromise the network, a majority of these validators would need to be corrupted [00:06:25], [00:06:26]. This level of decentralization makes Axelar almost as secure as the chains it connects to, being five times more decentralized than some competitors [00:06:33], [00:06:34], [00:06:36], [00:06:39], [00:06:55], [00:06:58].
Axelar’s Origin and Developer Experience
The inspiration for Axelar came from the challenges of onboarding users and developers to new blockchains like Algorand, particularly the difficulty of moving liquidity from Ethereum [00:07:42], [00:07:44], [00:07:51], [00:07:54], [00:07:57], [00:08:10], [00:08:13]. Axelar’s goal is to simplify cross-chain interactions and abstract away Web3 complexities for a better user experience [00:08:35], [00:08:40], [00:08:42].
General Message Passing (GMP)
For developers building on a chain like Monad, Axelar’s General Message Passing (GMP) protocol allows the “brain” of an application to reside on a fast EVM chain while enabling users from other networks to interact with it seamlessly [00:10:06], [00:10:08], [00:10:09], [00:10:11], [00:10:15]. Developers deploy a small piece of code on other chains that connects to Axelar’s endpoint, passing messages to the main application on Monad [00:10:43], [00:10:45], [00:10:48], [00:10:51], [00:10:53], [00:10:55], [00:10:57], [00:10:59]. This eliminates the need for an explicit bridging step for users and avoids application fragmentation across multiple chains [00:11:31], [00:11:33], [00:12:09], [00:12:11], [00:12:17], [00:12:19].
Evolution of Interoperability and Use Cases
While asset transfers currently dominate cross-chain activity, the industry is moving towards more complex message passing use cases [00:13:26], [00:13:28], [00:13:30], [00:13:33]. The high cost of cross-chain gas fees remains a barrier, but scaling solutions and chains like Monad are expected to lower these costs, leading to more cross-chain transactions [00:13:44], [00:13:46], [00:13:49], [00:13:50], [00:13:52], [00:13:57], [00:14:05]. The number of chains is growing exponentially, making cross-chain capabilities essential for projects [00:14:27], [00:14:29], [00:14:31], [00:14:33], [00:14:34], [00:14:36], [00:16:12], [00:16:14]. The shift has been dramatic: a year ago, teams preferred single-chain deployment, but now they plan for multiple chains from day one [00:15:52], [00:15:56], [00:15:57], [00:16:01], [00:16:03], [00:16:05], [00:16:07].
Monad’s instant finality is crucial for cross-chain applications, significantly improving user experience by reducing message passing times from 15-20 minutes on Ethereum to 60-90 seconds [00:16:57], [00:16:59], [00:17:02], [00:17:04], [00:17:05], [00:17:07], [00:17:11], [00:17:13], [00:17:14], [00:17:16], [00:17:19], [00:17:22], [00:17:24], [00:17:28].
Axelar’s Interchain Token Service (ITS)
The Interchain Token Service (ITS), currently in beta, is a code-free, permissionless tokenization and bridging solution [00:18:28], [00:18:30], [00:18:32], [00:18:40], [00:18:43], [00:18:45]. It allows anyone to easily launch a token across multiple chains from day one, addressing the issue of liquidity fragmentation [00:18:11], [00:18:13], [0:18:15], [00:19:11], [00:19:14], [00:19:16]. Partners like Frax are leveraging Axelar for issuing assets on chains not supported by their native bridges, realizing that cross-chain asset issuance is Axelar’s core strength [00:19:26], [00:19:28], [00:19:30], [00:19:32], [00:19:34], [00:19:37], [00:19:39], [00:19:41], [00:19:44], [00:19:46], [00:19:47], [00:19:50], [00:19:52].
Mitigating Interoperability Risk
Axelar employs several layers of security to mitigate risks in interoperability:
- Decentralization: As the first and only decentralized network capable of securing assets across different chains, Axelar eliminates common attack vectors that have led to billions in losses [00:23:16], [00:23:20], [00:23:22], [00:23:24], [00:23:27], [00:23:30], [00:23:32], [00:23:35].
- Rate Limiting: A simple but effective code check at the end of every transaction minimizes the impact of a hack [00:23:46], [00:23:48], [00:23:51], [00:23:54], [00:23:56], [00:23:58], [00:24:00]. Axelar’s architecture allows for customizable rate limits on its own blockchain, containing damage even if a connected blockchain breaks [00:24:03], [00:24:04], [00:24:06], [00:24:07], [00:24:09], [00:24:12], [00:24:15]. While rate limits might not always be absolute numbers for high-throughput chains, they can cap potential damage to a small fraction of total funds at risk [00:26:42], [00:26:44], [00:26:46], [00:26:51], [00:26:52].
- Multi-Solution Approval: For maximum security, applications can require approval from multiple decentralized solutions. For instance, the Lido community decided to work jointly with both Axelar and Wormhole, requiring approval from both validator sets before an asset is minted [00:24:49], [00:24:52], [00:24:54], [00:24:56], [00:24:57], [00:25:00], [00:25:03], [00:25:05], [00:25:07], [00:25:09], [00:25:12].
Why Axelar is Excited About Monad
Axelar’s commitment to supporting Monad from an early stage stems from several factors:
- Early Connection: Discussions between Axelar and Monad began almost two years ago, facilitated by a common investor, Dragonfly [00:28:27], [00:28:30], [00:28:33], [00:28:34], [00:28:37], [00:28:50], [00:28:51], [00:28:54], [00:28:56].
- Technical Legitimacy: Georgios quickly recognized the technical expertise of Monad’s founders, noting their focus on scalability and shared MIT connection [00:28:58], [00:29:01], [00:29:03], [00:29:07], [00:29:09], [00:29:11], [00:29:13], [00:29:15].
- Strong Community and Demand: Monad has developed one of the most decentralized and dedicated communities in the space [00:29:30], [00:29:32], [00:29:34]. The demand from builders to launch on Monad has made it evident that Axelar needs to be available there as soon as possible, ideally on day one [00:29:52], [00:29:53], [00:29:55], [00:29:57], [00:29:59], [00:30:02], [00:30:03], [00:30:06].
- Technical Alignment: Monad’s EVM compatibility and instant finality are crucial for building efficient cross-chain applications [00:16:50], [00:16:52], [00:16:55], [00:16:57].
The Future of Interoperability
Axelar envisions interoperability as an invisible layer, integral to every Web3 application across DeFi, gaming, real-world asset tokenization, and NFTs [00:31:12], [00:31:15], [00:31:18], [00:31:21], [00:31:23], [00:31:25], [00:31:27], [00:31:30]. The goal is to abstract away the underlying blockchains, allowing users to focus only on assets and applications, with wallets managing cross-network interactions seamlessly [00:31:38], [00:31:40], [00:31:43], [00:31:44], [00:31:45], [00:31:48], [00:31:50], [00:31:53], [00:31:55], [00:31:57], [00:31:59].
Final Alpha
Jason advises focusing on projects with strong technology and community for long-term success in crypto, ignoring short-term narratives [00:34:21], [00:34:22], [00:34:24], [00:34:25], [00:34:28], [00:34:31], [00:34:33], [00:34:36]. He highlights that Monad embodies both these qualities [00:34:38], [00:34:41]. Unice adds that conviction in founders and their original mission is critical for a project’s success and advises individuals to maintain their own convictions amidst market noise [00:35:27], [00:35:31], [00:35:34], [00:35:41], [00:35:44], [00:35:54], [00:35:56], [00:35:58], [00:36:01], [00:36:03], [00:36:06], [00:36:10], [00:36:12], [00:36:14], [00:36:16], [00:36:18], [00:36:20], [00:36:22].