The bull market is about to start. Can a dark horse emerge in the cross-chain protocol track?
After the launch of the new technology solution, the token price has been rising continuously. Can Axelar become a leading cross-chain protocol in 2024?Author: DeMan
In the past month, the price of Axelar's token WAXL has continued to rise. According to Bitget market data, the price of WAXL has increased from $0.9 on February 1 to around $1.5 in the past two days, with a growth rate exceeding 1.5 times.
What are the support points for WAXL's recent surge? The following provides a rough outline for readers.
Axelar, which has linked 56 chains, launched a new technical solution called chain abstraction, igniting market sentiment
Axelar is a programmable platform aimed at connecting different blockchains. Through the Axelar virtual machine, it automates and abstracts cross-chain functionalities, creating a unified user and developer experience across multiple blockchains, similar to the scalability brought by SaaS components in the Web2 era.
From the user's perspective, applications can send any payload and trigger multiple cross-chain function calls through universal messaging, achieving a one-click user experience. For application developers, cross-chain token services automate the complex task of managing token supply across multiple chains. For blockchain developers, the cross-chain amplifier automates new chain connections, instantly achieving network effects and arbitrary-to-arbitrary interoperability.
Axelar connects 56 blockchains, more than any other cross-chain network, and plans to further accelerate this advantage through the cross-chain amplifier, allowing more blockchains to connect quickly and easily. This connectivity not only reduces development costs but also simplifies the complexity of cross-chain connections by providing developers with a unified user experience through plug-and-play components across EVM chains.
The cross-chain transfer protocol (CTP) of the Axelar network is seen as a concrete manifestation of chain abstraction. It provides a set of protocols and APIs that enable application developers to deploy their applications on any chain and achieve cross-chain requests, including asset locking, unlocking, and transfer, thereby enhancing interoperability within the blockchain ecosystem.
The reason for Axelar's recent popularity lies in its introduction of the new concept of chain abstraction.
On February 21, Axelar shared the application of chain abstraction in the Ethereum ecosystem on its official platform, particularly its importance in emerging second-layer (L2) and third-layer (L3) solutions. Axelar proposed that chain abstraction not only simplifies user interaction with applications and assets on any EVM-compatible chain but also reduces the workload for developers when connecting new EVM chains. This interoperability expansion goes beyond traditional sequencer and bridging concepts, providing a programmable interoperability layer that achieves scalability for L2-based Ethereum applications and blockchains by abstracting blockchain connections for users and developers.
The concept of chain abstraction proposes an innovative solution aimed at addressing blockchain interoperability issues by building universal smart contracts capable of handling cross-chain communication, asset transfers, and cross-chain smart contract calls. The core of this concept is to provide users with an experience of decentralized application (DApp) services without needing to focus on the underlying blockchain technology, achieving a "non-perceptive" existence of blockchain. Specifically, users interact with DApps without needing to directly handle or understand the different blockchain networks involved.
What are the specific differences in security, universality, and scalability compared to other similar cross-chain protocols?
In the wave of cross-chain technology development, cross-chain protocols based on external verification mechanisms and supporting universal messaging have become the focus of the market. Among the many participants, protocols such as Wormhole, Layerzero, Chainlink CCIP, and Celer are Axelar's main competitors. Through in-depth comparisons, we find that Axelar demonstrates outstanding comprehensive strength in security, universality, and ecosystem development, making it the most competitive cross-chain solution currently available. Here is a comprehensive comparison of various solutions:
The core of cross-chain protocols lies in their security mechanisms, particularly how they establish consensus on trust layers. In this regard, Axelar adopts a DPoS mechanism, while its competitors employ different security mechanisms, such as Wormhole's PoA, Layerzero's dual assurance mechanism, CCIP's oracle network verification, and Celer's combination of DPoS and optimistic verification.
Wormhole has suffered reputational damage due to its PoA mechanism being susceptible to attacks, as reflected in the $226 million loss incident in February 2022, which highlighted the security vulnerabilities of the PoA mechanism under a limited number of verification nodes and lack of economic incentives.
Layerzero established a dual verification mechanism through the separation of Oracle and Relayer; however, its security still relies on trust in these two entities. The technical upgrade of Layerzero V2 introduced DVN, which, while increasing security, still requires trust in core entities, similar to the PoA mechanism, and involves trust assumptions.
Chainlink CCIP relies on its DONs' listening and signing mechanisms for information transmission, with an introduced risk management system adding a layer of security. Although DONs safeguard substantial assets, the development progress of CCIP is relatively slow.
Celer's SGN, built on the Cosmos SDK with a PoS mechanism plus optimistic verification, provides a dual security model. Nevertheless, its validator network is limited in scale, and there are concerns about the same entity running multiple validators.
In this context, Axelar's security mechanism has gained widespread recognition, particularly in Uniswap's assessment, where it is regarded as having an advanced cryptoeconomic mechanism to ensure protocol security. Axelar's PoS verification mechanism is based on a decentralized, permissionless network, providing the lowest trust assumptions, which stands out in comparisons.
Through in-depth security comparisons, Axelar demonstrates its leading position as a cross-chain solution. It has not only established a solid security foundation theoretically but has also proven the reliability and innovation of its protocol in practice, setting a new benchmark for the development of cross-chain technology.
Expanding ecosystem scale and collaborating specifically with Web2: Is Axelar's development layout more robust and diversified?
Through its unique cross-chain technology, the Axelar network has become one of the most notable ecosystems in the crypto space. The depth and breadth of its development and integration demonstrate its position as a leader in cross-chain communication. From connecting multiple Ethereum L2 networks and other significant blockchain networks to collaborating with global financial giants like JPMorgan and Apollo, Axelar's ecosystem expansion shows its technological maturity and market acceptance across multiple dimensions.
In particular, the launch of Squid Router marks Axelar's innovation in cross-chain liquidity solutions, enabling cross-chain swaps and bridging through GMP, which not only enhances network activity but also increases its application potential in the DeFi space. Additionally, integration with Vertex further expands Axelar's capabilities, supporting cross-chain deposits, which will greatly promote asset liquidity across different chains.
Axelar's collaboration with Frax Finance showcases its ability to provide secure and efficient cross-chain infrastructure for DeFi projects. By supporting the issuance of Frax assets across multiple chains, Axelar not only strengthens its ecosystem but also adds value to the entire crypto market.
Moreover, Axelar's enterprise and institutional-level integrations, such as collaborations with Microsoft and Mastercard, as well as integrations with DeFi platforms like Uniswap, Circle, and Lido, demonstrate its broad application scenarios and partnership potential within the industry. These integrations not only validate the practicality and security of Axelar's technology but also highlight its significant role in advancing the development of the crypto industry.
In the Cosmos ecosystem, Axelar's position is particularly prominent. As a major channel connecting the Cosmos ecosystem with EVM chains, especially Osmosis and EVM chains, Axelar captures the value of the Cosmos ecosystem's expansion and becomes an essential target when laying out the Cosmos ecosystem. As the Cosmos ecosystem continues to grow and upgrade, Axelar's role and influence will only further increase.
In summary, Axelar's ecosystem not only showcases its technological innovation and leadership but also reflects its unique ability to connect different chains and market demands in the crypto world. With more integrations and collaboration cases unfolding, Axelar will undoubtedly play a greater role in promoting cross-chain communication and the development of the crypto market.
Will the launch of the 5,000 WAXL bounty program expand its influence among developers? What does the future hold for Axelar?
In recent market dynamics, the Axelar network has highlighted its ambitions in the field of cross-chain technology and its commitment to building the future Web3 ecosystem by announcing a 5,000 WAXL bounty program on the x platform and speaking at the "RockTree OG Talks" roundtable series. Through collaborations with large financial institutions such as JP Morgan and Uniswap, as well as Immutable, Axelar demonstrates its technological application potential and broad market recognition. However, the security of cross-chain technology and market acceptance remain major challenges for Axelar, requiring continuous technological innovation and market promotion to overcome.
Although Axelar has made significant progress in advancing cross-chain technology, the sustainability of its success will depend on ongoing improvements in technological security and optimization of user experience. The potential security risks arising from the complexity of cross-chain operations, as well as the market acceptance process of emerging technologies, require Axelar to not only maintain a technological lead but also focus on market education and building partnerships.
Looking ahead, Axelar faces both tremendous market opportunities and severe challenges. To maintain its leadership position in the cross-chain field, Axelar must continue to focus on technological innovation, deepening partnerships, and adjusting market strategies. For investors and market participants, closely monitoring Axelar's performance in technological development, security enhancement, and market expansion will be key to assessing its long-term market potential.
