Satellite - The first decentralized cross-chain asset transfer application on Axelar Network

‣ Introduction
‣ Satellite is not an app
‣ Satellite's mechanics: How tokens are transferred
‣ Axelar Network in Cosmos ecosystem
‣ Using Satellite: Guides & Manuals
‣ Just one satellite of many on Axelar

- After the receipt of an asset to Satellite's one-time deposit address, transaction processing and confirmation will take no more than 5 minutes.

- Satellite has no hidden fees: transferring tokens from a one-time address to the destination wallet costs 0.1% of the transfer amount.

- Satellite will not require you to authorize your wallets to transfer tokens. It is enough to transfer tokens to a one-time address as well as specify the address and network of the recipient. The recipient can be a third party; tokens will reach him automatically, without the need for a digital signature or additional confirmation.

- Satellite is just a graphical interface built on Axelar's technological substrate; even if the interface stops working for some reason, the user can always access the mainnet command line and continue to execute transactions.

- Satellite is just an example of what applications can be developed on top of the decentralized Axelar Network technology stack. The number of satellite-like applications will grow as more and more different assets and blockchains are included in the list of Axelar-supported technologies. Most similar applications are expected to be created by enthusiasts and third-party developers to build their own solutions.

Axelar Network’s Satellite is a new product making tokens transfer between different blockchains easy — without extortionate fees and security problems that are always there when we use traditional bridges and swaps. However, despite the launch of such a breakthrough product, Axelar team considered it as a «small first step», that only shows potential for users and developers. Are they mean that?

The following analytical material provides an answer to this question. A bonus after reading will be an in-depth understanding of the technological features of the Satellite application and its differences from its closest analogs.

The «application» prefix for Satellite has come to be used as the most unified designation, for simplicity, although technically this product is a graphical interface. That’s what, among themselves, Axelar Network developers call it. The interface allows using several commands from the Axelar future SDK. Thus:

Thanks to Satellite, the user can transfer tokens between different ecosystems — those that are already connected, and those that will still be connected to the Axelar pool. The list of assets supported for transfer will also expand. The transfer of LUNA and UST tokens between five networks is currently supported: Terra, Avalanche, Polygon, Ethereum, and Phantom. The Moonbeam blockchain is expected to appear on the list soon.

How popular is the Satellite? According to open data, during the first 40 hours after the launch of the Satellite (which took place on January 22, 2022), about 10,000 transfers worth more than $5 million were made. Today, 3 weeks after the original launch, the figures have increased by more than 7 times: the number of transactions exceeded 70,000, and the volume of transferred assets is already more than $35 million.

First of all, after the user has decided on the basic parameters for the transfer of assets, selected the direction and indicated the address of the recipient, the Satellite will generate a one-time address for the transaction. The system will wait for the receipt of tokens at this address, which will then be sent to the recipient. Everything will happen automatically after the assets arrive at the generated address.

A one-time address belongs to, is generated, and issued by the Axelar network. This is not a wallet or its equivalent, but rather a courier identification number for your transfer. This unusual use of a cryptocurrency address is called an IBC transfer. Created and used within the Cosmos ecosystem, this technology is highly regarded in advanced tech circles and is often compared to the TCP/IP Internet protocol. With the only difference being that all the data it sends is cryptocurrency tokens.

Thus, while other protocols are sharpened for the application tasks of individual networks, developing their effectiveness only within a narrow niche, IBC allows you to work with any unidentified data. This allows us not to overload the protocol with excessive standardization nor to impose additional layers of policies while maintaining all the variety of possibilities of such an architecture. The principle of operation of the IBC protocol will be well demonstrated by an example involving the delivery of a package.

Since Axelar Network has its own unique approach to using tools for developers from Comsos, they also work with IBC transactions in a non-standard way, or rather uniquely: no other blockchain in the Cosmos ecosystem allows you to see the internal data of the forwarded "box" (that is, information about the "envelope" and "letter") in advance. Only Axelar reads and reflects this information at the moment when the tokens have not even reached the recipient yet, providing completely transparent transactions. Data disclosure occurs at the stage when the one-time address receives tokens from the sender’s wallet, since at that time the sender will already have indicated all the information about the recipient.

When it comes to how Axelar Network differs from its "neighbors" in the ecosystem, it is very important to understand that Axelar is significantly different from other blockchains, although a superficial acquaintance with Cosmos may indicate otherwise.

Built on Cosmos, Axelar inherits the best of the ecosystem: IBC data bundling technology and ability to collect and organize such data. But, Axelar also has its own technological stack distinguishes it from other ecosystem blockchains, including Cosmos itself. In particular, Axelar has its own protocol that allows to deploy and then interact with "gateways" - very special smart contracts.

In technical terms, Axelar is a POS system based on the Cosmos SDK. In simple words: the Axelar blockchain acts as a desktop computer's system unit, to which special "devices," - or gateways, - are connected peripherally. Axelar deploys gateways, which are data stores, on different blockchains in order to record and store information about activity within these blockchains. The gateways installed in this way will monitor and accumulate data until the Axelar "system unit" accesses them, extracting the accumulated data. Thanks to the gateway technology - Axelar is able to transfer tokens between any blockchain, some of which, in principle, are not supported by anyone in the entire Cosmos ecosystem (although all blockchains in the ecosystem, including Axelar, are built on the same SDK).

In this elegant way, Axelar can instantly connect to the desired blockchain through the gateway and start working on the transfer of tokens: "wrap" the tokens, converting them to the appropriate format of destination network, collecting validator signatures to confirm the transaction of destination network, and completing the transfer of assets upon transaction confirmation in Axelar blockchain.

Thus, while adopting huge technological capabilities from the Cosmos ecosystem, the Axelar Network does not become its hostage. Thanks to the minimalist yet functional design of technology, Axelar stands apart from repetitive solutions, being unique in its own way. Perhaps this is why Axelar Network soared in the rankings in terms of the number of transactions, despite having only TWO active data transmission channels-in a matter of days after launch, it outperformed the projects that entered the Cosmos ecosystem more than a year ago in terms of the number of transactions and active wallets.

Although the token transfer between different networks occurs automatically when using Satellite, the user must be careful about the addresses of the contracts: an error when entering the destination address will lead to an irretrievable asset loss. In other words, if you send Ethereum tokens to the Avalaunche address, then the Satellite will not throw an error and will make the transfer as if all the data you specified were correct. Therefore, correct data entry is still a human authority.

There you will also find up-to-date information on minimum transaction sizes. You will also find out that the commission for transfers through the Satellite is only 0.1% of any transfer amount. At the same time, it should be borne in mind that the standard network commission for sending tokens from the original wallet to the Satellite’s deposit address does not go away; you must be ready to pay it too.

The most useful source of information for a novice Satellite user will be the official interface guide right on the application page. All of the necessary information is available there, including a text instruction on how to perform a token transfer as well as a detailed video guide created by an Axelar team member:

The Satellite is a graphical interface that allows you to send wrapped versions of token between different blockchains, and is built on Axelar Network technology stack. What did the members of the Axelar team have in mind when they positioned the breakthrough product from all sides - in a small step? The possible meaning is follows:

Satellite is just the first star in Axelar's sky. Blockchain developers have to wait for the release of the API documentation and SDK, then using the API to connect their applications simultaneously to all blockchains supported by Axelar. Imagine the variety of solutions that we will see after the official release of the Axelar toolkits, when anyone can deploy their own application for transferring tokens between different blockchains.

Those wishing to contribute to the Axelar Network project and personally participate in the creation of the API may apply for one of the temporarily open vacancies for developers.