Web 3.0 examples. Axelar Network. Part 2

A lot of time has passed since the last episode, and therefore a very brief reminder. Axelar is a network that connects all blockchain ecosystems, applications, and tokens.

Lately Axelar managed to present its bridge between networks — Satellite. They also partnered with Injective — Layer 1 protocol to create DeFi applications, which will help to more easily integrate EVM (Ethereum Virtual Machine) blockchains. Smart contracts of these blockchains conduct transactions in a similar way as in Ethereum, well which is logical. The only difference is that they sometimes offer more speed and lower transaction costs. Some blockchains go further and become more like something really interesting. As an example of popular networks, these are Fantom, Arbitrum, BSC, Moonbeam, Moonriver and many others.

So, in the last episode, we looked at the features of Axelar, namely:

What I call “just plug in”, or “batteries included” if you are familiar with Django web framework.
Support for updates of all blockchains
Unified Application Tier Language
And security is supported by DPOS (Delegated POS)

I also talked about the threshold, digital signatures, and the bridge between blockchains, which just recently came out — it’s called Satellite, which can be considered a kind of demonstration of the possibilities.

There are a couple more points that I didn’t focus on, but I still think are important. Axelar consists of a decentralized network of validators, provides SDK (software development kit) and API. With them you don’t have to reinvent the wheel, trying to somehow combine the interaction of several blockchains. By the way, when writing your solution, you can easily go the wrong way. One-to-one communication is very often implemented with simple multi-signatures, and we, as people who are not far from development, can predict the scalability problem — two-way bridges between N networks will require N squared bridges. Axelar allows you to get rid of these cross triggers.

So, these SDKs + APIs make it much easier to write decentralized applications that can be run on many networks without having to search for some additional service or solution. Simple API requests and the application works. If you are not very strong in the cryptosphere, I will explain in a nutshell why the interaction between networks is an EXTREMELY important task. For the whole last year, a lot of services were closed for you if you didn’t want to spend $100 for a single operation on the Ethereum network (simple transactions cost less, but still). For this reason, other blockchains have become very common.

This is far from the only reason why something like this is sorely needed for WEB 3 to turn from something incomprehensible and unnecessary into a part of the Internet that is popular in its own sector.

Let’s move on to the technical part, which has not yet been considered.

Перейдем к технической части, которую пока не рассматривали.

Cross Chain Transfer Protocol (CTP)

This is an application layer protocol that allows applications to use cross-chain functions. Let’s take Defi as an example, whose main focus is swaps (we will take only this function for now). These applications consist of three components — a GUI, a smart contract, and a node acting as an intermediary that sends transactions between the front end and the smart contracts.

Applications can send CTP requests similar to our HTTP GET/POST methods.

In three steps, the operation on such a platform looks like this:

Register the blockchain which the interaction will take place with
Register assets that will be used
And the execution of the operation itself — withdrawal, exchange and other functions

Suppose we want to make a deposit in a pair of X and Y, which are in different networks. How the transaction is processed:

A key is generated using cryptography and consensus on the respective networks
The public keys are returned to the application. The corresponding secret key is shared by all Axelar validators.
When deposits are confirmed, Axelar updates its own information that the deposits went through.
Validators generate a signature to update the account of the bridge in the original network
The CTP request is then returned to the smart contracts of our DeFi application, which can update its state, exchange rates, and so on.

Throughout the whole process, the Axelar network at a high level acts as a decentralized read/write oracle between chains, CGP (Cross chain gateway protocol, we discussed it in the previous episode) is the routing layer between chains, and CTP is the application protocol.

In conclusion, I will say. This is such a highly contentious time (even without taking into account the real world) when the old world’s order is still greatly affecting our lives. However, there are things like WEB 3 that could potentially change the way we interact with the Internet today. Well, time will tell.

My media: Telegram | Youtube | Podcast | Articles | All links