Axelar (AXL) is a decentralised blockchain network designed to enhance interoperability and scalability across different blockchain ecosystems.
Keep reading to learn about how Axelar differs from typical cross-chain bridging platforms and discover the crucial role that the AXL token plays within the project’s broader ecosystem.
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How does Axelar (AXL) work?
Axelar is a decentralised interoperability platform designed to enhance the connectivity and scalability of blockchain technology. It operates as an open source network, allowing developers and builders to easily program cross-chain logic and exchange data seamlessly across various blockchain ecosystems.
In this way, Axelar acts as a bridge, closing the blockchain connectivity gap to facilitate the scaling of Web3 platforms and decentralised applications (dApps). A highly innovative blockchain solution seeking to revolutionise the way users connect across diverse chains, Axelar has the potential to fundamentally disrupt many industries, most notably, decentralised finance (DeFi).
So, how exactly does Axelar work? To operate, the network relies on a unique combination of algorithms and consensus-agnostic protocols:
- Delegated proof-of-stake (DPoS) consensus mechanism: Ensures secure cross-chain interaction. AXL holders delegate stakes to validators, who verify requests from Axelar’s source chain and confirm execution on the destination chain. Validators’ voting power is proportional to their stake, which is used to verify the accuracy of cross-chain transactions.
- Gateway smart contracts: Used to connect the Axelar network to the Layer 1, Layer 2 and other blockchains that are connected to it. Validators use the gateways to find, analyse and confirm transactions on the network, ensuring seamless cross-chain transfer. Connected applications communicate using their individual smart contracts.
- An SDK of developer tools and APIs: For building scalable and interoperable cross-chain dApps across various blockchains and networks. By using Axelar’s General Message Passing (GMP) model, developers can also synchronise their transactions on Axelar.
What makes Axelar unique?
Various networks exist to facilitate the interaction between blockchains that share similar consensus mechanisms. Typically, however, developers seeking a cost-effective and user-friendly method to enhance interoperability across multiple multichain ecosystems are faced with limited opportunities.
Axelar’s unique design tackles this issue. Eliminating the need to connect blockchain networks through two-way bridges, Axelar creates a singular, universal bridge for diverse blockchains to connect and transact seamlessly across.
As such, it offers developers a cross-chain development platform that is easy to access and secure to use, and has resulted in a fast-growing Axelar ecosystem comprised of a range of unique features:
- Connects 50+ blockchains into a one-click network that allows developers to connect, interact, and build dApps. These include popular blockchains such as Ethereum, Polygon, BNB Chain, Arbitrum, Cosmos and Fantom.
- Uses cross-chain intents technology and the Squid application to process transactions in one second.
- Allows developers to build Web3 apps on the Axelar network with no new code. Instead of developing new programming languages, they can leverage the platform’s plug-and-play integration model.
- Uses its gas service contract and one-time deposit addresses to automate gas payments for users. They can pay gas fees in a single transaction on the transaction source chain using their native cryptocurrencies.
AXL: A price analysis
AXL, the Axelar network’s native utility token, is integral to the project’s ecosystem and serves as an asset for network operations, governance, and security.
Since Axelar is a PoS network, validators who produce new blocks and sign-off transactions are incentivised with newly minted AXL tokens. The token also decentralises the ecosystem’s decision-making process by allowing all holders to participate in network governance.
When AXL launched in the open market in 2022, it was trading for around $0.85 a token. But the year’s prevalent bearish trends saw it close the year at around $0.49 per token.
| Year | Start Price | End Price | Percentage Change |
|---|---|---|---|
| 2022 | $0.85 | $0.49 | -42% |
| 2023 | $0.51 | $1.19 | +133% |
For illustrative purposes only. Past performance is not an indication of future results
AXL’s price growth in early 2024 can be understood in line with bullish trends in the broader crypto market throughout Q1 2024, in anticipation of April’s Bitcoin halving event.
Who created Axelar?
The Axelar project was initially developed by Interops Labs; a team of blockchain experts led by Axelar protocol co-founder Sergey Gorbunov. The Axelar Foundation has a mission to promote the growth and adoption of the Axelar network; Axelar protocol co-founder Georgios Vlachos is a director. Before starting Axelar protocol, both founders had worked at Algorand. The Axelar protocol was established in 2020, at a time when multiple blockchain networks could not connect with one another.
Tip: Axelar leads a network of 50+ blockchains. Besides developers, the Axelar ecosystem comprises validators, stakeholders, and numerous contributors.
Members of the vast Axelar community strive to create a more integrated and cohesive Web3 ecosystem, driving the broader adoption of cryptocurrencies and blockchain technology. The project boasts various community-building initiatives across different blockchains in its ecosystem; a pivotal part of Axelar’s development strategy.
Final thoughts on investing in Axelar
Axelar is an upcoming crypto ecosystem solving interoperability issues across blockchain networks. It offers a highly scalable platform on which dApps can operate. The platform’s unique model uses dedicated PoS consensus, developer tools (APIs and SDKs), and gateway smart contracts to increase efficiency and process transactions in a second.
Besides its support for interoperability and scalability, Axelar is a distinct smart contract network with low fees. It is also committed to community-driven initiatives. These factors make the Axelar project promising, as its ecosystem continues to be one of the fastest growing in the crypto market.
FAQs
- What is AXL used for?
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AXL is the native cryptocurrency of the Axelar ecosystem. The token is used for executing transactions, rewarding validators, and participating in network governance.
- How much is AXL worth?
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As of early April 2024, the AXL token was trading for over $1. The coin’s price had increased by over 100% from its initial trading price (when it launched in 2020), offering investors an affordable option in the altcoin market.
- Where can I buy AXL?
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AXL is supported on many exchanges. All you need to do is create a trading account, complete KYC, deposit funds, and purchase AXL on the platform.
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