Axelar

As a secure interchain communication provider, Axelar allows dApp users to interact seamlessly with any asset or application on any blockchain. It is akin to Stripe for Web3, offering developers a simple API atop a permissionless network that ensures security through proof-of-stake consensus.

The Role of Axelar Network

The primary function of the Axelar network is to connect blockchains securely. This is achieved using proof-of-stake consensus, where network validators produce new blocks, participate in multiparty signing, and vote on external chain states. Tokenholders stake the AXL token and delegate tokens to a validator’s staking pool in exchange for rewards, less the validator's commission.

Uses of AXL Token

The AXL token serves dual purposes - governance and transaction fee payment to validators and tokenholders. Notably, Axelar network users are not required to hold the token. The conversion into AXL tokens and destination-chain tokens are managed on the backend, enabling users to pay gas only once in the source-chain token.

Reward System & Supply Dynamics

Axelar network's reward system is inflationary as it increases the total supply of AXL tokens. However, based on the transaction fee mechanism mentioned above, there's potential for supply deflation over time.

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