Axelar ushers in the crypto super app 📱

All of crypto finally at our fingertips: thought I’d do something other than galaxy imagery for once

Super apps now

Imma start with a disclaimer that super apps (such as WeChat) in their web2 form are a powerful source of evil centralisation. Quite opposite to the globally permissionless modular ecosystem we’re trying to build.

WeChat: all users’ data in one place — incredible, but as free as the market for supreme leaders

Layer 1s are hyped as if they’re going to be super apps

Up until now, a good part of the narratives and hype driving alt L1 and Rollup valuations has been the same as this dirty TradFi model: the promise that these Layer 1s and 2s will collect and keep users and applications, and charge them rent for living on chain. The reality isn’t as bad as TradFi, but in practice the free market is hobbled.

Stickiness, a sign of a closed market

Liquidity is currently stickier/more sluggish across chains than within chains. Community loyalty accounts for some of this, but I put it down to three technical limitations.

  1. The need to bridge assets (Wormhoooole)
  2. No application modularity across chains (Yearn on Polygon cannot automate Curve on Ethereum)
  3. Different private key types and signature generation algorithms are used on different chains (7 seed phrases and 5 wallet browser extensions needed)
(coyote=retail, road runner=vcs lel)

Axelar unifies crypto

Axelar Network is a decentralised interoperability protocol which has just launched on Mainnet. It uses a combination of smart contracts, a Layer 1 proof of stake network (built with Cosmos) and threshold cryptography to take signed instructions on one chain, and spit out a signature for the same instructions on another chain. Cosmos should be given much credit for this dream, but Axelar brings it to arbitrary consensus layers.

One private key

Mass adoptoors will only need to have one private key. I think this is a big deal, akin to iPhoone was for appliances.

Axelar → accessing all apps on all chains with one key, is like iPhone → walkman, map, bank card, camera, TV, telephone, word processor, Gameboy and heroin all in one pocket sized device.

Get ready for the libertarian super app

As Layer 1s argue about sharding, rollups and multi-chain philosophies, Axelar connects all of them whether they like it or not. I can’t help thinking L1s hoarding users is a bit futile. Axelar will turn all of crypto into one super app, accessible with one private key. A decentralised world, centralised only by a user’s observation point, their public key. Art is in the eye of the beholder. Enter the relativity phase of Blockchain physics. I’ll be building cross-chain and you should too 🌱

ok I mentioned relativity, couldn’t resist a space picture

Post Script

  • Another really interesting project to follow is Entropy, which is a decentralised signing machine with similar implications for crypto. It solves a slightly different problem (decentralised custody), and I can see both Entropy and Axelar existing in harmony. Def check Entropy out too.
  • You may be wondering about LayerZero. LayerZero offers a very similar dream, but its technology is more the application layer, than the infrastructure/protocol layer. I’ll do a piece on LayerZero very soon.
  • Axelar’s technology will become a centralised attack surface for our ecosystem, so it’s worth tracking this. A bug in Axelar’s tech or a game theoretical asymmetry with the proof of stake network could be catastrophic.
  • Two barriers for a user to use an app on another blockchain remain: community, and trust. Lunatics might remain, as they’ve been made rich by the buying LUNA early, but I don’t believe this will be a long term factor. Once blockchain technology matures and we have application devs forking this open source technology for themselves, the L1 may not matter as much, as long as it works and comes from a lineage of good consensus tech and inherits security from a deep, decentralised staking pool. Also, if users don’t need to know which chain an app is running on, the community factor might fade.
  • Axelar only supports 5 chains currently, but its technology is generalisable to most consensus methods. Axelar hasn’t released their SDK for developers to build cross chain apps just yet, but will be doing so very soon. You can try out Axelar’s cross chain asset transfer bridge here.
  • Axelar requires a couple more block confirmations for a signature to be forwarded, so truly snappy UX may require the user having a private key on certain chains. Traders and gamers, for example, will want faster execution.

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0xpostman

0xpostman

Cross chain desperado loose in the wireld