Key takeaways
- Axelar is an overlay network providing uniform routing, translation layers, and security across different blockchain ecosystems without requiring pairwise bridges.
- The network launched mainnet in phases starting with validator onboarding and basic asset transfers, with the Satellite application enabling simple token transfers between chains.
- Axelar closed a $35 million Series B funding round to expand chain integrations, grow the team, and support application developers building cross-chain solutions.
- The platform uses Cosmos SDK with an open validator set model, gradually increasing validator participation as network performance and robustness improve.
- Developers can build on their preferred blockchain platform without learning new languages, with Axelar handling cross-chain interactions through SDKs and documentation.
What Axelar is and how it differs from bridges
Ashton Addison: For viewers new to Axelar, can you give a high-level overview?▶ 00:22
Sergey Gorbunov: Axelar is a blockchain interoperability network designed to connect different blockchain ecosystems, applications and users. The basic problem we're trying to solve is to let users and developers interact and compose across multiple ecosystems in an easy way. So we're building a decentralized network, and a set of SDKs and services around it, to do that.
Ashton: What makes Axelar's cross-chain solution different from the others?▶ 01:03
Sergey: A lot of earlier solutions tried to solve the problem in an ad hoc way, with things like pairwise bridges between ecosystem A and ecosystem B, or other protocols that don't really scale across blockchains. We designed Axelar from the ground up as an overlay network that serves three purposes. One, it provides uniform routing across different blockchains, so there are no more pairwise connections to manage. Two, it provides a translation layer. Going from a chain like Cosmos to an EVM chain means crossing chains that speak very different languages and have different smart contract support, so messages have to be translated. Three is security. If you have lots of blockchains and want to connect them, you have to rely on some intermediate service or protocol. By having a systematic, uniform way to deal with various security threats and attack models, we can improve the security of the overall cross-chain environment.
First applications that start having cross-chain support are just going to have so much advantage compared to the applications that don't.
Mainnet rollout and the decentralization trade-off
Ashton: Where does Axelar stand after the work done in 2021?▶ 03:17
Sergey: Most of 2021 went into building the core pipes of the technology: the Axelar network itself and its core functionality. We ran multiple test networks, with close to 100 validators participating and over a thousand developers experimenting and making cross-chain calls. Last month we announced the start of the mainnet rollout. It will be phased. The initial phases include validator onboarding, turning the network on and basic asset transfer flows. A couple of weeks ago we opened a simple application on top of the network, Satellite, that lets people transfer tokens from one ecosystem to another. Over the coming months we'll open up more functionality, onboard new chains and more validators, and work directly with developers to help them go cross-chain. Our ultimate mission is to allow any application to go cross-chain.
Ashton: How do you balance validators, decentralization and scalability as the network grows?▶ 04:50
Sergey: There's always a trade-off between security, speed of processing and decentralization. Our philosophy from day one has been to look at projects that established successful security models in the past. The only solution we know is a decentralized validator set with an open consensus mechanism. Axelar was designed around the Cosmos SDK, so anybody can join, run a node and participate. We're starting with an initial validator parameter, which will keep increasing as we get more performance and improve robustness features. We carefully observe the network, with tools built on top of it for monitoring, including explorers and dashboards. As we gain confidence and functionality, we'll keep increasing decentralization of the validator set, because ultimately that's the only way to get security in the space.
The Series B and building for developers
Ashton: You're closing a $35 million Series B. What are the next steps with that capital?▶ 06:47
Sergey: We'll expand on three avenues. First, we want to keep growing the number of integrations the network supports. We designed the stack to onboard a new chain very easily. For an EVM chain it's about 10 to 15 commands and that's it. Chains that speak a different consensus language need a bit more work, because we have to build a translation layer for them. Second, we'll keep expanding the team that builds the core project, from engineering to business development, content creation and documentation, which is very critical. Third, we're just starting to work with application builders who want to go cross-chain, so we'll build SDKs and documentation and use part of the funds to scale that as well.
Ashton: How are you helping lower the barriers for developers to build on Axelar?▶ 08:17
Sergey: The first objective was to make sure developers don't have to learn another language. You can build on whichever platform you're most comfortable with, whether that's EVM chains, Solana or Avalanche. You interact with what we call gateway contracts in the same language you write your dapp in. There are some additional function calls from your application to our gateway contracts, but from there the gateway unlocks composability and communication with the rest of the ecosystem. We're also building auxiliary services on top of the network so developers don't have to relay transactions, pay multiple gas fees across different chains or wait on confirmations.
Our ultimate mission is to allow any application to go cross-chain.
Where cross-chain is heading
Ashton: Will there be a 'year of cross-chain', the way 2021 was for NFTs and DeFi?▶ 11:38
Sergey: It's starting to be one of the top topics. This year we'll probably still see a large footprint of bridging technologies, with people explicitly moving assets from chain A to chain B. But a lot of projects are integrating directly, so the bridging is hidden from users and they don't have to move their tokens back and forth. Will there be a moment when we all say we need to go cross-chain? I think so, though I don't know when. Probably over the coming years. First applications that start having cross-chain support are just going to have so much advantage compared to the applications that don't. That means access to more liquidity, more users and more distribution. As soon as the first category, say DEXes, integrates, every other DEX has to do the same or it won't be competitive. Maybe not all projects will embrace this at the same time, but I expect whole categories to embrace it around similar time frames and follow one another.
Ashton: Are bridges still the best technology we have for cross-chain?▶ 15:35
Sergey: A lot of the bridges people have built are either centralized or pairwise, which doesn't let you scale the ecosystem uniformly. As an example, we built a bridging application on top of the Axelar network, Satellite, and it already has lots of advantages. As a user you don't pay multiple gas and transaction fees. It also has uniform routing, so every new chain that gets added is automatically interconnected with all the other chains, which is a huge network effect. But it's just a sample application. I do think bridges will stay in some sense, because some people need to move large amounts of liquidity from chain A to chain B, or rebalance their books on the back end. I think retail users will start accessing cross-chain applications a lot more over the coming year or two.
This interview has been edited for length and clarity. Recorded February 2022.
