Axelar Crypto: Redefining Web3 Interoperability as a Cross-Chain Hub

The world of blockchain was once a series of isolated islands, with users and assets trapped in their own ecosystems. With the emergence of the multi-chain era, cross-chain interoperability has evolved from a "nice-to-have" to the core bottleneck of Web3 development.

Axelar is becoming a bridge network connecting these silos with its programmable, secure, and scalable universal interoperability layer, allowing assets and data to flow freely across more than 60 blockchains.

##The Interoperability Dilemma and Axelar's Breakthrough The fragmentation of the blockchain ecosystem has become one of the biggest challenges for the industry's development. The communication barriers between different chains lead to a fragmented user experience and dispersed liquidity, forcing developers to repeatedly build adaptation solutions for each chain.

Traditional solutions have obvious shortcomings:

• Centralized exchanges rely on trust assumptions, which contradict the principles of Web3.
• Wrapped Assets introduce an additional layer of risk, such as bridging vulnerabilities.
• Ecosystem-specific hubs (e.g., Cosmos IBC) are difficult to achieve cross-system connections.

Axelar's breakthrough lies in the construction of a decentralized star topology network. It achieves full-stack interoperability through a two-layer core protocol:

• Cross-Chain Gateway Protocol (CGP): Similar to the BGP routing protocol of the internet, it connects heterogeneous blockchains.
• Cross-Chain Transfer Protocol (CTP): An application layer protocol similar to HTTP, supporting arbitrary function calls.

This design allows developers to easily access cross-chain functionality through a simple API, while users enjoy a seamless experience of "one-click interaction." ##Three Engines of Technical Architecture Axelar's competitiveness is built on three major technological pillars, forming a complete interoperability stack.

Programmable Layer: Beyond Asset Cross-Chain

Through the Axelar Virtual Machine (AVM) and the General Message Passing (GMP) system, developers can not only transfer assets but also trigger smart contract functions across chains. For example, calling a lending protocol on Polygon from Ethereum achieves true cross-chain collaboration.

Inter-Chain Token Service (ITS) further simplifies multi-chain deployment. Project parties can issue cross-chain fungible tokens with one click, retaining governance, revenue, and other native functions without the need for manual packaging.

Security Mechanism: The Cornerstone of Decentralization

• Dynamic Validator Network: 75 nodes operate based on PoS consensus, using a secondary voting mechanism to prevent power concentration.
• Key rotation and rate limiting: Automatically block abnormal traffic, single chain risks will not spread across the entire network.
• Public Audits: The codebase is continuously subject to audits by security firms, and a bug bounty program incentivizes white hats to participate.

Scalability: Advantages of Star Topology

Unlike the traditional "peer-to-peer" model of bridging, Axelar's star structure allows new chains to connect once to access the entire network. In 2023, the number of supported chains increased from 30 to 55, with a goal to cover 100 Ethereum Layer 2s in 2024.

##AXL Token: Economic Model Upgrade and Value Capture As a network native token, AXL will complete a key economic model transformation after the Cobalt upgrade in February 2025:

• Burning mechanism: 98% of cross-chain transaction fees are permanently destroyed, entering a deflationary cycle.
• New staking threshold for the new chain: Ecosystem new chain needs to purchase and lock AXL to inject into the reward pool.
• Inflation rate reduction: chain rewards decreased from 0.75% to 0.3%, alleviating selling pressure

Token utility covers the entire process of the network:

• Staking guarantees security: Validators must stake AXL to participate in block production.
• Pay transaction fees: Gas fees are settled in AXL (users can automatically exchange any token).
• Governance voting rights: Holders participate in protocol parameter adjustments.

By June 2025, the circulating supply of AXL will be 986 million coins, with a fully diluted market cap of 444 million USD. The burning mechanism and ecological expansion create a dual tightening of supply and demand, building a value moat.

##Ecological Panorama: From DeFi Giants to Wall Street Institutions Axelar has formed a dual-driven ecosystem of Web3 native applications and traditional financial giants.

###Full coverage of the Web3 field

• DeFi: 90 projects integrated, including Lido (bringing wstETH to BNB Chain via Axelar), Frax Finance cross-chain issuance of frxETH, Squid router handling over $9.5 billion in cross-chain transactions.
• Wallets: MetaMask, Trust Wallet, and 17 others support one-click cross-chain interactions.
• Game/NFT: Immutable uses Axelar to connect multi-chain players, Junkyard realizes NFT cross-chain gamification.

Traditional Institutional Access Channel

• JPMorgan: Its Onyx division collaborates with Apollo to use Axelar for cross-chain verification of RWA assets.
• Deutsche Bank: Building a tokenized fund interoperability platform using Axelar
• Microsoft: Providing Axelar enterprise-level cross-chain solutions through the Azure Cloud Marketplace

This bidirectional expansion confirms Axelar's positioning: to become the TCP/IP base layer of Web3, regardless of on-chain or off-chain assets.

##Competitive Advantage: Why Axelar? Compared to competitors like LayerZero and Wormhole, Axelar's core difference is:

• Degree of decentralization: 75 permissionless validator nodes vs competitor's multi-signature or authority proof model
• Programmable Depth: AVM supports cross-chain smart contracts, rather than simple asset transfers.
• Enterprise-level adaptation: Architecture design that meets the compliance requirements of traditional institutions

Market data supports its leading position:

• In Q4 2023, the cross-chain trading volume increased by 478% year-on-year, and the number of active addresses increased by 430%.
• The historical cumulative cross-chain transaction amount has exceeded 9.5 billion US dollars.
• Integrate 793 GMP contracts, covering 66 blockchains

As the 2024 roadmap progresses, plans such as Bitcoin ecosystem interconnection and integration of the Move language chain will further amplify its network effects.

##Conclusion Axelar's ultimate vision is to become the invisible pipeline of Web3. The true multi-chain era will arrive when users can switch between underlying blockchains without awareness, and developers are freed from the shackles of multi-chain adaptation. As Sergey Gorbunov envisioned: "Interoperability should not be an add-on feature, but a default configuration."

As RWA and institutional funds accelerate their entry, Axelar, with its dual genes connecting traditional finance and the native crypto world, may become the most critical "connecting layer" in the evolution of Web3.

In the future blockchain wars, the winner may not be a single high-performance chain, but rather the invisible champions that weave networks between chains.

Author: Blog Team *This content does not constitute any offer, solicitation, or recommendation. You should always seek independent professional advice before making any investment decisions. *Please note that Gate may restrict or prohibit all or part of the services from restricted areas. Please read the user agreement for more information, link: