Axelar Network (AXL)
Axelar is composed of a decentralized network of validators, secure gateway contracts, uniform translation, routing architecture, and a suite of software development kits (SDKs) and application programming interfaces (APIs) to enable composability between blockchains.
Basics
History
Audits & Exploits
"Axelar has had a significant number of audits, particularly recurring audits that review any changes to the protocol. Axelar also offers a $2.25M bug bounty on Immunefi."
Bugs/Exploits
Governance
Admin Keys
"Axelar can use a special command to freeze transfers from one or all chains in cases when a particular chain is under attack, or there is an ecosystem-wide black swan event. This allows Axelar to pause all the incoming and outgoing processing requests related to a specific chain.
Upgrades on the Axelar network are already enforced by an on-chain decentralized governance mechanism. However, smart contract upgrades use a governed multisig. While governed multisigs are a bottleneck for decentralization, this allows Axelar to offer features such as the rate limit functionality. As Axelar progresses on its roadmap, it aims to have the validator set jointly approve smart contract upgrades to decentralize the network further."
DAO
Treasury
Token
Launch
- Full AXL tokenomics can be found here.
Token Allocation
Utility
"AXL is the native token of the Axelar network. The AXL token supports the following critical functions:
- AXL is a medium for transaction fees and any other fees for network usage, paid by users to the validators that run the network.
- AXL is used by holders and their proxies to stake and exercise governance over proposals (such as a parameter change or protocol upgrade).
- AXL enables incentives to support the decentralized Proof-of-Stake consensus that secures the network and validates transactions on chain. Validators receive AXL rewards as incentives to continue to secure the network. These incentive rewards are distributed programmatically, per rules encoded in network protocols, and are inflationary, i.e., each protocol reward increases the total token supply.
- AXL is used to reward ecosystem builders and community contributors."
Other Details
Coin Distribution
Technology
- Whitepaper or docs can be found here.
- Code can be viewed here.
Implementations
- Built on: Cosmos SDK
- Consensus mechanism: proof-of-stake
- Algorithm:
- Virtual Machine:
From Li.Fi (19-9-2022): "Developers can use Axelar gateway contracts and connect to any EVM contract on any chain without having to make any changes to their chains or UIs."
- Development language:
Transaction Details
How it works
"The Axelar Network has two functional layers:
- The Core Infrastructure Layer — This layer consists of Axelar Network itself, which is maintained by a set of validators executing transactions. Additionally, this layer also consists of gateways that act as smart contracts to connect the Axelar Network with the other blockchains. Validators maintain the operations of the gateway protocol. They read incoming transactions from the source chain gateways, reach a consensus, and then write to the gateway on the destination chains to execute a transaction. Once this process is complete, the funds are locked on the source chain, and an equal amount of canonical assets are minted on the destination chain.
- The Application Development Layer — This layer consists of SDKs/APIs, which make the core infrastructure layer of Axelar available for developers to go cross-chain. The APIs enable developers to send generalized messages across chains which opens up a world of possibilities in terms of cross-chain actions. For instance, developers can lock/unlock and transfer crypto assets across chains or execute cross-application triggers.
Here’s how Axelar works at a high level:
- Step 1 — A user requesting a cross-chain transfer of information waits for either the token deposit or action to be confirmed by Axelar Validators on chain A.
- Step 2 — Axelar Validators observe their chain A nodes and cast votes on whether the transaction occurred on chain A.
- Step 3 — If the number of Axelar Validators surpasses the set threshold, the chain A transaction s confirmed by the Axelar Network.
- Step 4 — Using multi-party cryptography, the Axelar validator set signs off on a list of commands confirmed by the votes. If the signatures cross the set threshold by the quadratic voting power of validators, a signed batch of commands is prepared.
- Step 5 — The signed batch of commands is relayed to the Gateway on chain B by Axelar microservices (or anyone else; the service is permissionless), which secures the transportation of tokens/data across chains.
Axelar makes the following trust assumptions:
- External verification by a set of validators — Axelar uses a validator set with 50 validators (48 active at the time of writing) to execute transactions. A message must be signed by ⅔ of the validators to be passed by their quadratic voting power. As a result, the security of an application using Axelar is more secure than Axelar’s consensus. Additionally, Axelar offers application-based security as it allows applications to customize their codebase as per their requirements. For instance, applications’ governance can elect their own permissioned set of validators and relayers, which can then be used for validating transactions by spinning up a fork of Axelar.
- Skewed voting power — Out of Axelar’s 48 active validators, about 10 hold less than 1% of the voting power. If the voting power were to become more concentrated, this could reduce the actual security of a proof-of-stake system such as Axelar, by skewing voting power in favor of an elite group of validators. However, once the AXL token is live, the voting power is expected to be distributed more evenly. Moreover, Axelar has implemented quadratic voting to validate and process cross-chain transactions. Quadratic voting makes Axelar’s network more decentralized and significantly improves the skewed voting power concern. Read more here about quadratic voting and Axelar’s security approach, and view validators’ share of stake and their quadratic voting power on the Axelar block explorer, axelarscan.io.
- Possible liveness issues as validators can choose which chains to support— For a new chain to be added, Axelar requires 60% of the validators by their quadratic voting power to run a node for that chain. While validators have the choice to maintain a certain EVM chain, the vote majority threshold is still 60% of the quadratic voting power of the total validator set. So, if an EVM chain doesn’t have enough supporting validators, only liveness is affected, not security. Moreover, these thresholds can also be increased via on-chain governance.
- From this thread (23-4-2022):
"Axelar is a scalable cross-chain communication platform that allows to plug-in blockchains to all other blockchain ecosystems. Dapp can be hosted on one blockchain and use Axelar’s cross-chain communication to lock/unlock/transfer assets and communicate on any other chain.
Axelar has two decentralized protocols: 1. Cross-chain Gateway Protocol (CGP): which takes care of the cross-chain routing and delivery across blockchains 2. Cross-chain Transfer Protocol (CTP): which enable users to interact with applications on any chain"
- From Citadel (17-3-2022):
"The Axelar SDKs provide a rich suite for developing Web3 applications, ensuring that developers have the tools they need for building. With these tools and APIs, developers can use the Axelar network and its SDKs to write dApps that can be easily deployed across all Axelar-connected ecosystems. In other words, Axelar distills cross-chain interoperability down to a simple set of API requests. This is absolutely central to adoption, as the developer experience around deploying Web3 applications must be like the experience today for Web2 developers, where the underlying networking and ecosystem-specific deployment considerations are largely abstracted away."
Fees
"Users only pay fees in the asset being transferred on the source chain, and all the other fees (finalization, relay) are taken care of in the backend. The Axelar Foundation also subsidized transfer costs in case of gas price fluctuations in the destination chain. Moreover, Axelar uses batched transactions to further reduce costs and plans to add more code-level gas optimizations in the future."
Upgrades
Staking
Validator Stats
"In the current set, there is a maximum of 50 validators. This value can be increased via on-chain governance."
Liquidity Mining
Scaling
"Multiple application or chain-specific forks of Axelar can be spun up. This enables Axelar to scale to an arbitrary number of applications or networks. In the future, all these forks can be secured through Cosmos’ Interchain Security."
Interoperability
"As of September 2022, Axelar supports 23 chains: Ethereum, BNB Chain, Avalanche, Polygon, Fantom, Moonbeam, Aurora, Cosmos, Osmosis, e-Money, Juno, Crescent, Injective, Terra, Secret, Kujira, AssetMantle, Evmos, Fetch.ai, KI, Regen, Stargaze, and, of course, Axelar."
"Axelar already supports many principal chains such as Avalanche, Ethereum, Fantom, Moonbeam, Polygon and Terra."
Other Details
Oracle Method
Their Other Projects
axlUSDC
- From Llama Risk (12-4-2023):
"Axelar's axlUSDC is a wrapped representation of USDC, enabling users to transact the stablecoin across various blockchain networks. Users can access axlUSDC through DEX liquidity pools, cross-chain liquidity routers such as Squid, or via Satellite. The platform aims to enable composable USDC using its General Message Passing (GMP) capability in collaboration with Circle's Cross-Chain Transfer Protocol (CCTP).
It is worth noting that the upgradability of smart contracts through AxelarGatewayProxy.sol is controlled by a 4-of-8 multi-sig, with an intention to replace it with a DAO governed by tokenholders in the future."
Satellite
- From Citadel (17-3-2022):
"On January 26th, 2022, the launch of Satellite was announced. Satellite is one of the first ecosystem applications powered by the Axelar Network. It is a decentralized cross-chain asset transfer application, which enables users to transfer assets they hold on a source chain to an address on a different destination chain."
Roadmap
- Can be found [Insert link here].
Usage
"96 projects integrated Axelar."
Projects that use or built on it
Competition
Pros and Cons
Pros
- "Plug-and-play” integration with simple SDKs and APIs — Axelar takes a universal approach to building and enabling developers to go cross-chain. It offers universal composability of programs with any-to-any cross-chain capability, allowing dApps to tap into different blockchain ecosystems frictionlessly. Moreover, it offers comprehensive documentation and tools like Axelarscan, which make building on Axelar a good experience.
- Axelar as the translation layer — Axelar is consensus agnostic, allowing it to connect with all chains. It is interoperable with EVM chains, Bitcoin, and Cosmos-based chains. The consensus agnostic characteristic of Axelar gives the team the flexibility to add any new chains seamlessly. At the network layer, this enables any new connection to the Axelar Network to benefit from all the previously interconnected ecosystems. Thus, Axelar acts as the translation layer that unifies unique languages of different types of blockchains.
- Axelar Network requires only a single signature to authorize transactions. This signature represents the collective decision of the majority of validators and enables Axelar to scale as it keeps the transactions small, reduces costs, and makes it easier for Axelar to connect and interconnect other chains.
- Reduced costs for users — Users only pay fees in the asset being transferred on the source chain, and all the other fees (finalization, relay) are taken care of in the backend. The Axelar Foundation also subsidized transfer costs in case of gas price fluctuations in the destination chain. Moreover, Axelar uses batched transactions to further reduce costs and plans to add more code-level gas optimizations in the future.
- Scalability through IBC — Multiple application or chain-specific forks of Axelar can be spun up. This enables Axelar to scale to an arbitrary number of applications or networks. In the future, all these forks can be secured through Cosmos’ Interchain Security."
Cons
Team, Funding and Partners
Team
- Full team can be found [here].
- Sergey Gorbunov, CEO and Co-founder. Works on building systems and protocols that protect data and information in untrusted, distributed, and highly adversarial environments. His goal is to enable new types of applications that have built-in trust and security properties and allow users to share, exchange, and compute information without having to trust each other or any third party. Towards this, he designs new cryptographic models, primitives, and systems.
- Georgios Vlachos, Co-Founder. Georgios received his M.Eng. in Computer Science from MIT in 2017, under the supervision of Professor Silvio Micali. He holds a B.S. from MIT, double majoring in Mathematics and Computer Science. In 2011, he was awarded a Gold Medal at the International Mathematical Olympiad (the first Greek student to achieve this distinction). Worked as a Head of Mathematics at Algorand.
Funding
- Zircuit; mentioned a founder was part of their Mainnet Round (22-7-2024).
- Launched a $60M ecosystem startup fund created by:
"Blockchange, Chorus One, Collab+Currency, Cygni Capital, dao5, DCVC, Divergence Ventures, Dragonfly Capital, Lemniscap, Morningstar Ventures, Nima Capital, Node Capital, North Island Ventures, Rockaway Blockchain Fund, SCB 10X and others."
- Turned out (8-12-2022) to have sold $2500k worth of tokens to Alameda.
- From CoinList (1-9-2022):
"At the beginning of the year, Axelar raised its third round of financing, valuing the Axelar network at $1B. The Series B brought Axelar’s total funding to date to $65M. Their backers include Binance, Coinbase, Dragonfly, Galaxy and Polychain."
Partners
- Part of the Cross Chain Coalition (2-11-2022).
- "Axelar is partnering with @0xPolygon to deliver secure cross-chain communication to #PolygonSupernets." (26-10-2022)
- Got a partnership with Anchorage Digital to add the AXL token to their platform (14-9-2022).
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