Axelar Crypto: A Cross-Chain Hub Redefining Web3 Interoperability

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

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

Interoperability Dilemma and Axelar’s Breakthrough

The fragmentation of the blockchain ecosystem has become one of the biggest challenges for industry 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 is contrary to Web3 Principles
• Wrapped Assets introduce an additional layer of risk, such as bridging vulnerabilities.
• Ecosystem-specific hubs (such as Cosmos IBC) make it difficult to achieve cross-chain connectivity.

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

• Cross-chain Gateway Protocol (CGP): similar to the internet’s BGP routing protocol, connecting heterogeneous blockchains
• Cross-chain Transmission Protocol (CTP): similar to HTTP’s application layer protocol, supporting arbitrary function calls

This design allows developers to access cross-chain functionality through a simple API, while users enjoy a seamless “one-click interaction” experience.

Triple Engine of Technical Architecture

Axelar’s competitiveness is built on three major technological pillars, forming a complete interoperability stack.

Programmable Layer: Beyond Asset Cross-Chain

With the Axelar Virtual Machine (AVM) and General Message Passing (GMP) system, developers can not only transfer assets but also trigger smart contract functions across chains. For example, calling on Ethereum. Polygon The lending agreement 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 manual packaging.

Security Mechanism: The Foundation 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 blocks abnormal traffic, preventing single-chain risks from spreading across the entire network.
• Public Audits: The codebase continuously undergoes audits by security agencies, and a vulnerability 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 just once to access the entire network. In 2023, the number of supported chains increased from 30 to 55, with a target of covering 100 Ethereum Layer 2s in 2024.

AXL Token: Economic Model Upgrade and Value Capture

As the network’s native token, AXL completed 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 chain staking threshold: newly added ecological chains must purchase and lock AXL to inject into the reward pool
• Inflation rate reduction: rewards per chain decreased from 0.75% to 0.3%, alleviating selling pressure

Token utility covers the entire process of the network:

• Staking ensures security: Validators need to 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.

As of June 2025, the circulating supply of AXL is 986 million tokens, with a fully diluted market cap of 444 million USD. The burning mechanism and ecological expansion form a dual tightening of supply and demand, building a value moat.

Ecosystem Overview: From DeFi Giants to Wall Street Institutions

Axelar has formed a dual-driven ecosystem of Web3 native applications + traditional financial giants.

Full Coverage in the Web3 Field

• DeFi: 90 projects integrated, including Lido (bringing wstETH through Axelar BNB Chain), 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
• Games/NFT: Immutable uses Axelar to connect multi-chain players, Junkyard realizes NFT cross-chain gamification.

Traditional Institutional Entry Channels

• JPMorgan: Collaborated with Apollo using Axelar for RWA asset cross-chain verification through Onyx
• Deutsche Bank: Built a tokenized fund interoperability platform using Axelar
• Microsoft: Offered Axelar enterprise-level cross-chain solutions through the Azure cloud marketplace

This bilateral expansion confirms Axelar’s positioning: to become the TCP/IP foundation 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 differences are:

• Decentralization: 75 permissionless validators vs competitors’ multi-signature or authority proof models
• 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, cross-chain trading volume increased by 478% year-on-year, and active addresses increased by 430%
• Historical cumulative cross-chain transaction volume surpassed 9.5 billion USD
• Integrated 793 GMP contracts, covering 66 blockchains

As the 2024 roadmap progresses, plans such as the interconnection of the Bitcoin ecosystem and the 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. When users do not need to be aware of the underlying blockchain switch, and developers are freed from the shackles of multi-chain adaptation, the true multi-chain era will have arrived. As Sergey Gorbunov envisioned: “Interoperability should not be an add-on feature, but a default configuration.”

With the accelerated entry of RWA and institutional funds, Axelar, which connects traditional finance and the crypto-native world with its dual genes, may become the most critical “connection layer” in the evolution of Web3.

In the future blockchain wars, the winner may not be a single high-performance chain, but the invisible champion that weaves a network between chains.