Despite the fact that there are numerous efforts underway to find a cross-chain solution, Axelar is attempting to find an alternative solution to the problem. In other words, the majority of cross-chain projects only try to link blockchains together through a bridge that allows the transfer of assets between networks. Axelar has a plan to make smart contracts more accessible, instead.
GMP (General Message Passing) technology functions as a common language, allowing smart contracts written in different languages to communicate smoothly. The Axelar platform simplifies and provides tools for application development. This enables new applications and expands the capabilities of cross-chain operations.
Furthermore, Axelar has a variety of blockchain partners, including Avalance, Ledger, Polkadot, and others, as well as investments from leading organizations such as Polychain Capital, Galaxy Digital, Divergence Ventures, etc.
Importance of Cross-chain operations
Cross-chain operations refer to the interaction between two or more blockchains. It is widely known that there are various networks of blockchains nowadays, such as Bitcoin, Ethereum, Cardano, etc. However, the fundamentals of each blockchain differ, whether it is the encryption method, the language used to write smart contracts, block time, or the consensus algorithm.
To visualize this, try to think of blockchains as countries that have different languages, cultures, regulations, and regimes. When traveling abroad becomes common, there are labor exchanges and communication technology to reduce the gap between those differences, resulting in a more free flow of capital, the learning and exchanging of skills, and the import and export of goods. This leads to a leap forward in growth in a global economy in which all countries benefit.
When each blockchain network can work together, the benefits that follow are also plenty. For example:
- Funds can be circulated to various blockchains more easily, increasing the liquidity of the blockchain industry as a whole.
- The community can grow rapidly since the system makes it easier for people from different networks to gain access to the community or transfer assets to certain projects.
- Connecting with other assets, not only cryptocurrencies but also currencies, stock prices, bonds, etc., will make DeFi more diversified in its services.
References
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