According to data gathered on Flipside Crypto, Axelar Network marks a boost in new addresses, active users, and transactions. Similarly, we continue to see further usage of Interchain Token Service (ITS), which became the second most popular application on Axelar in just two months of beta release.
Here, we'll explore the Axelar Network, some of the top projects on Axelar, and some upcoming integrations and growth areas.
What is Axelar Network?
The Inter-Blockchain Communication Protocol (IBC) addresses the challenge of blockchain interoperability within the Cosmos ecosystem but does not extend beyond it. For blockchains outside Cosmos, developers often rely on bridges to transfer assets between chains.
Axelar Network facilitates secure cross-chain communication for Web3, enabling developers to create cross-chain experiences. It allows users to interact easily with any asset, application, or blockchain with just one click, streamlining the user experience across multichain environments.
Axelar runs on a Byzantine consensus protocol. The Byzantine consensus protocol allows blockchains to communicate without custom changes, while validators help enable cross-chain requests. Its core protocols are the Cross-Chain Gateway Protocol (CGP) and Cross-Chain Transfer Protocol (CTP).
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The CTP allows for application-level interactions, such as asset transfers and cross-chain requests via simple API calls, enhancing the composability of programs across blockchains. CGP enables easy connectivity without requiring blockchains to make custom changes. These protocols empower developers, dApp builders, and users to interact efficiently across chains.
These protocols facilitate easy integration and interaction across chains, enabling developers to build versatile applications and users to access services directly from their wallets. This approach brings some significant advantages:
- Easily input your blockchain along with existing blockchain ecosystems.
- Host dApps anywhere, lock, unlock, transfer assets, and communicate with applications on any other chain.
- Users can interact with any application across the blockchain space.
Top Axelar projects
Axelar boasts a thriving ecosystem of Web3 projects across multiple departments, including DeFi, cross-chain liquidity, and NFTs. Below, we will highlight some of the hottest projects on Axelar at the time of writing.
General Message Passing (GMP) is a cross-chain messaging solution that works as a translator between blockchain networks. It utilizes self-executing smart contracts to authenticate and validate transactions between chains. GMP simplifies the blockchain bridging process by enabling developers to call functions on other chains, streamlining asset transfers and associated instructions across blockchain networks.
According to Axelarscan, the four most popular contracts are based on GMP transactions. Let's explore some of these popular projects in more depth.
- Squid Router
Squid is a protocol designed to facilitate cross-chain liquidity and swaps which leverages a Javascript SDK to enable seamless transactions across different blockchain networks. Squid utilizes Axelar's GMP capabilities for smart contract interactions and multicall features to execute complex, sequenced transactions on various chains.
This allows one-click interactions with multiple dApps without multiple wallet setups. Squid ultimately focuses on security, utilizing minimum exposure in smart contracts and routing through trusted Automated Money Makers without holding liquidity.
- Interchain Token Service
The Interchain Token Service (ITS) by Axelar allows ERC-20 tokens to maintain their properties and functionalities across multiple blockchains. It supports creating and managing "Interchain Tokens" that are deployable on various chains while preserving their native features and ensuring uniformity in token supply.
ITS uses smart contracts on a public blockchain, enabling tokens to operate with a single EVM address across blockchains. This system is designed to overcome the limitations of traditional token bridges by ensuring fungibility and reducing the costs associated with multichain deployments.
- MintDAO
Mint DAO is an omnichain NFT Launchpad platform using Axelar's GMP technology. It allows NFTs to be transferred seamlessly across all supported blockchains within the Axelar network, facilitating the easy movement of tokens with minimal costs—users only need to cover transaction gas fees.
Mint DAO utilizes Axelar GMP for efficient cross-chain messaging and management of NFTs, including their creation and burning across different chains. This setup enables NFTs to maintain consistency and availability across multiple blockchain environments, making it a significant player on Axelar's mainnet.
- Prime Protocol
Prime Protocol is a multichain DeFi platform that enhances DeFi by enabling cross-chain collateral and loans using Axelar's General Message Passing (GMP). Prime Protocol lets users deposit assets from any supported chain and use them as collateral for loans on any other connected chain.
This approach eliminates the need for traditional cross-chain bridges, providing a more secure and efficient method of leveraging assets across multiple blockchains. Prime Protocol's architecture, which includes a hub-and-spoke model based on Moonbeam, synchronizes and authorizes actions across chains, enhancing the user experience and security in DeFi applications.
Key Areas of Growth
Axelar has seen its fair share of integrations and adoption. Let's cover some areas where Axelar has been growing and upcoming integrations in no particular order.
- Web2.0
In July 2023, Axelar and Microsoft partnered to accelerate blockchain adoption by creating a data integration and interoperability layer to simplify blockchain implementations for businesses and web3 startups. Through the collaboration, Microsoft Azure customers were able to gain access to Axelar's blockchain services, including the GMP and development tools for multichain deployments. The partnership aimed to bridge private and public blockchains and integrate Azure OpenAI services to innovate within the web3 space.
Additionally, in April of the same year, we witnessed Mastercard selecting Axelar to join its Start Path Crypto program, aiming to integrate Axelar's blockchain interoperability solutions with Mastercard's financial network. This partnership focused on developing Axelar's access to Mastercard's extensive customer and channel network, offering both companies opportunities for technical collaboration and knowledge exchange.
- Real-World Assets (RWAs)
In November 2023, it was announced that Axelar worked alongside J.P. Morgan's Onyx Digital Assets and other partners to explore the tokenization of investment portfolios across multiple blockchains. Axelar's role in the partnership centered on key interoperability solutions to enable seamless interactions between different blockchain systems, thereby enhancing asset management across traditional and digital financial networks.
The collaboration involved creating proof-of-concept (PoC) systems to automate and improve the efficiency of managing tokenized assets, highlighting Axelar's role in bridging the gap between decentralized and traditional financial systems. Additionally, as of February 2024, we learned of a partnership with Ripple and the Axelar Foundation. The partnership aims to enhance the interoperability of the XRP Ledger (XRPL) with other blockchain networks.
The collaboration will integrate Axelar's network, allowing secure and efficient cross-chain transactions and extending XRPL's functionalities into decentralized finance (DeFi) and real-world asset tokenization. This strategic alliance will expand XRPL's utility by connecting it with Axelar's network, which links over 50 blockchains, facilitating a broader, more integrated blockchain ecosystem.
- DeFi
In October 2023, The partnership between Axelar and dYdX involves leveraging Axelar's network to enhance dYdX's decentralized exchange, specifically in the launch of their v4. The collaboration aimed to integrate dYdX's platform (the largest perp DEX by volume) more fully into the broader blockchain ecosystem, enabling easier onboarding and management of cross-chain transactions and assets.
Axelar's technology allowed dYdX to build a dedicated blockchain using the Cosmos SDK, supporting the expansion of its decentralized financial services across multiple chains.
A few days ago, we learned about an exciting development between Axelar and Sui. During Sui Basecamp, Georgios Vlachos of Axelar joined the stage and spoke about a global liquidity layer built on Axelar in conjunction with Squid Router and Sui.
Adding more to the upcoming integration, Alonso de Gortari of Mysten Labs spoke further about DeepBook Protocol on Sui: "DeepBook Protocol on Sui is a wholesale liquidity layer for all web3. Axelar is coming to Sui, and they have a cross-chain DEX called Squid Router, allowing users to move assets cross-chain. Squid Router will use DeepBook as their backend to settle trades due to both Sui and DeepBook's high performance and strong liquidity."
Final Thoughts
Many integrations and growth areas exist within the Axelar ecosystem. Axelar's ITS has been out of beta since January of this year, and we're witnessing some potential exciting use cases unfolding, with upcoming collaborations with Sui and existing players like Ripple.
As the Axelar network continues to grow and evolve, we expect to see numerous exciting projects shaping the future of a multichain blockchain ecosystem.
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