From the Ordinals ecosystem to Bitcoin L2, from the Restaking war to the meme wave, various narratives have emerged one after another with the myth of wealth creation of leading tokens, thus leading the entire market in stages. The potential main narrative of the next wave of rotation may be in which track, which becomes the key to ambush and layout the wealth effect of the new stage. As a relatively niche track that is difficult for retail investors to understand, the cross-chain/full-chain interoperability track has been "forgotten" to some extent. So can full-chain interoperability still become a new narrative in this bull market?
The AXL investors in this free speech are strong, such as Polychain, Dragonfly, Coinbase Ventures, Binance, Galaxy, and many top individual investors. They provide strong strategic advice and also provide business development support.
Project introduction: In the full-chain narrative track, AXL is the leader in the blockchain that connects blockchains. As a blockchain, Axelar can build programmability through the Axelar Virtual Machine (AVM), which builders can use to build cross-chain dApps on Axelar and deploy on multiple blockchains. Currently, there are more than 150 dApps being built. Secondly, Axelar is the most decentralized cross-chain interoperability protocol, with 75 validators verifying cross-chain transactions, fully ensuring security.
Token Role: AXL tokens are not just for governance. As a PoS chain, AXL token holders stake their tokens by delegating them to validators to earn staking rewards. The growth of the network comes with more chain integrations and more cross-chain application integrations, increasing the number of cross-chain transactions. All cross-chain transactions will involve AXL fees, although for users, this step is abstracted by the Axelar network service contract to collect GAS fees to provide a better user experience. As the ecosystem grows, there will be more cross-chain transactions, which means that the gas fees collected will also increase. With the upcoming gas burning mechanism, the supply of AXL tokens may become deflationary as more cross-chain transactions are conducted through Axelar. In addition, with the launch of AVM, new chains can be integrated into Axelar without permission, but they will need to own AXL tokens, and AXL's current staking yield is around 7.5, which also provides a considerable underlying yield for DEFI Lego.
In addition, in order to support hundreds or even thousands of chain connections in the future without over-inflating the network, the previous token economics would add rewards for each connected external chain to incentivize validators to add new connections. The first phase of the token economics reform has been voted through, which reduces inflation for each newly connected external chain by more than 50%. In the next phase, a gas burning mechanism will be introduced, which will make AXL deflationary as cross-chain usage increases, allowing both projects and tokens to move towards a virtuous channel of working together.
In addition, the ecosystem is also gradually expanding: the ecosystem includes other L1/L2 chains integrated into the Axelar network, as well as ecosystem applications that use Axelar directly or integrate into Axelar's ecosystem applications (such as Squid). An example of a dApp that uses Axelar directly is Lido, where Axelar is used to introduce stETH to the Cosmos and BNB chains. Another example is that dApp is integrated with a dApp in the Axelar ecosystem, such as dYdX, which uses Squid for cross-chain deposits. All of these integrations are not only critical to the growth of the ecosystem, I am also very excited to see a wave of new cross-chain native applications that have begun to be built in the past 12-18 months, such as Squid, Prime, Interswap, etc. For example, Interswap provides incentivized whitelist testnet access to Axelar users. Osmosis also provides incentivized liquidity pools for AXL assets. As the ecosystem grows, the community will also benefit from it!
Brief summary:
Axelar deployment was upgraded to v0.35 to support the virtual machine (AxelarVM) - developers can write smart contracts on Axelar to achieve the operability of cross-chain tasks, making Axelar break away from the single cross-chain attribute and completely open up the imagination space of multiple narratives;
At the same time, Axelar’s new token economics change proposal is about to be implemented - the final total inflation rate will be reduced from 11.5% to 6.7%, a significant drop of nearly half, and Axelar also plans to change the AXL token from an inflationary token to a deflationary token by implementing Gas burning;
Moreover, on April 10, Axelar and Sui reached a cooperation and will soon integrate Sui on Squid, a cross-chain infrastructure solution based on the Axelar interoperability network, to open up the flow of funds in the Sui network and even the entire Move ecosystem, thereby further promoting the construction of a global liquidity layer.
In addition, with BlackRock creating a new wave of RWA narratives, Axelar’s quiet layout in the field of RWA cross-chain interoperability is also worth noting. In addition to the old RWA leader Centrifuge, Axelar also cooperated with Ondo Finance in November last year to launch Ondo Bridge, an innovative cross-chain liquidity solution for RWA.
Combined with the imagination space for public chains opened up by AVM, from the perspective of value capture, Stake/Gas fee burning/governance, multiple functions are integrated into one, and the substantial drop in inflation rate will undoubtedly directly benefit AXL.
