Axelar heralds the Cosmos vision of a secure, infinitely connected internet of blockchains to all ecosystems. It takes the interchain and includes every chain and rollup into it in a cosmic bear hug. An IBC citizen by birth, Axelar allows every crypto ecosystem to participate, letting them into the Cosmos, and out, providing a fair playing field for IBC to show its stuff. Permissionlessness is the name of the game.
The Internet of blockchains and Axelar’s place in it
Cosmos is the birthplace of the “Internet of blockchains”. It is where cross-chain visions of free-market dynamics at every layer of the blockchain stack have been cultivating for years. IBC is at the core of these visions. It is a cross-chain security and communication protocol which is often hailed as a gold standard, followed with almost religious fervor by members of the Cosmos ecosystem. For some quite technical reasons, it is very difficult to add IBC to existing blockchains, as well as some new consensus types. Thus the Cosmos’ “Internet of blockchains” has started as a small pocket of a wider crypto world, amongst the IBC native Cosmos chains.
Enter Axelar, a born citizen of the Cosmos with a single goal — to make an internet of blockchains undeniable, irrefutable. Axelar is an app-chain for interoperability, which uses IBC wherever possible, but also uses its own fully generalisable Crosschain Gateway Protocol (CGP), and with the ability to aggregate other cross chain protocols in the future to make connections to ANY chain or rollup. The end result of this is that every chain, user and application is a part of the internet of blockchains whether they like it or not.
What is IBC
The Inter-Blockchain Communication protocol (IBC) at its core, is light client verification. This means two blockchains verify data from each other by running a lightweight version of the other’s validator node. The IBC protocol starts with an asynchronous handshake which lets two blockchains get in sync with each other. Each handshake creates a secure cryptographic channel, which can be used to verify messages securely, quickly and cheaply. As long as channels are maintained by relayers, handshake don’t need to occur regularly.
Interoperability means more than just IBC
But, IBC is not an end to end framework for interoperability. IBC is a protocol. A protocol needs to be implemented inside software. Just like the Ethereum protocol is implemented by GETH validator clients, the IBC protocol is implemented inside Cosmos IBC modules.
For Cosmos chains, independent organisations like Interchain (IG) Informal systems and Strangelove build and maintain tools which run the IBC protocol and use the security it provides.
An example of a tool built on top of IBC is cross-chain token transfers, which allow you to e.g. send ATOM from the Cosmos Hub to Osmosis. Another tool built which uses the IBC protocol is Interchain-Accounts, which is used by the Mars Hub to coordinate debt across multiple blockchains.
Axelar, in comparison, is a service network, which leverages multiple protocols like IBC, along with a wide array of tools, including the Cosmos IBC tools mentioned above, to build an efficient network of connected blockchains. Much like the Internet is a multi-layered stack of protocols, comprising hundreds of businesses, and more than just HTTP, the internet of blockchains is the same, more than just IBC.
Check out my article on Overlay Networks for more on how service networks are needed to scale the decentralised web.
Specifics: what services does Axelar provide?
Interoperability protocol aggregation
If a chain has instant finality, and a good light client IBC implementation, then Axelar can connect to it via IBC. If a chain has its own protocol for cross chain verification and tools for transferring messages, Axelar can implement this too. If no secure and decentralised interoperability solution exists yet for a chain, Axelar’s validators can connect via Axelar’s own generic Crosschain Gateway Protocol. This gives the widest possible coverage, while keeping IBC as a first class citizen.
An example of this in the wild is Evmos, where either IBC or Axelar’s CGP could have been used, but Axelar connected to Evmos via IBC. Also worth noting Axelar could connect any two state machines via IBC, not just blockchains.
See Why IBC doesn’t exist everywhere for more details on why we can’t just use IBC in all cases.
Axelar provides a routing hub for interchain messages. Apps and chains need maintain only one channel for cross-chain communication to gain access to every chain connected to Axelar. Squid, the routing protocol in partnership with Axelar, provides a service for apps and users to access this efficient network topology with the least effort. In practice, we will see a combination of some direct channels between major chains along with the use of routing hubs in strategic places to find the optimal point between efficiency, speed and security.
Once there are thousands of app-chains, we will see independent economies form inside network partitions, each economy connected via a routing hub. The Cosmos/EVM economies are already a great example of this effect in the wild, and Axelar is leading the way for this future.
Check out Honk if you like Hub & Spoke for more on this.
Just like in the physical world, where economies speak different languages, have different laws and use different currencies. Axelar Network serves as a message translation layer across the board. Axelar translates security between consensus languages, it prepares, verifies and routes messages destined for EVM, CosmWasm and Move virtual machines. Squid acts as the message encoding and route instruction layer, as well as providing currency conversion between economies. By connecting to Axelar, a chain needs to only speak “one language” to interoperate with all others.
Execution and monitoring
Interoperability needs reliable connectivity, execution of messages, gas payments across chains, monitoring and status of interchain messages. Axelar is built in a way that anyone can permissionlessly provide these services, but it is leading the way with reliable relay software, AxelarScan block explorer, an interchain Testnet, and a gas service for paying gas on any chain from your home chain.
Axelar prepares the world for IBC
Axelar provides many-many routing, message translation, relaying and monitoring of interchain transactions. It starts the long game of building interoperable systems across different virtual machines, ecosystems, user types and consensus types. When IBC does arrive for a chain, we will see elegant migration to use the IBC protocol, while maintaining benefits of Axelar’s services.
Through Axelar, business relationships between apps in the Ethereum and Cosmos are developing today. The siloed users and organisations of various L1s can now access any other ecosystem. Application usefulness can rule user loyalty instead of the tribal antagonism we saw in 2021.
App chains are a core part of the vision of the Cosmos, and Axelar is an App chain for networking and interoperability. As these cross-chain relationships and apps are built, there needs to be a place for the tech that supports these accumulate. Axelar Network provides a decentralised substrate for these technologies to live.