We’re happy to announce that the AXL token has been launched. Our team would like to share the most important information about the AXL token with our users. It will be helpful for everyone who is interested in the Axelar Network and AXL token staking.
This article will cover the main aspects of the AXL token and its tokenomics, rewards and fees, and the difference between AXL and wAXL.
Axelar: What It Is & How It Works
Axelar is a unique and revolutionary project in the blockchain industry. It provides a decentralized network and tools that help connect dApp builders to multiple blockchain ecosystems, applications, and users for conflict-free cross-chain communication.
Axelar is a full-stack decentralized transport layer that meets the growing demand for cross-chain services with maximum blockchain security and composability. The AXL token supports the Axelar network in achieving the following main goals: security, decentralization, longevity, and ecosystem growth.
AXL enables incentives to support the decentralized Proof-of-Stake consensus that secures the network and validates transactions on the chain. Validators receive AXL rewards as incentives to continue securing the network. These incentive rewards are distributed programmatically (as per the rules encoded in the network protocols) and are inflationary, meaning that each protocol reward increases the total token supply.
AXL Tokenomics
Axelar is designed to connect blockchains, enabling Web3 to operate on a level no other cross-chain network can provide. It's secured with a PoS consensus, and messages are routed and translated using permissionless protocols. The AXL token supports incentive and fee payments to validators, stakers, and network governors.
Key information about the Axelar tokenomics:
- Supply: There will be 1 billion tokens at genesis.
- Governance: The AXL token allows stakers to execute authority over proposals, such as a parameter change or protocol upgrade.
- Allocation: The genesis allocation is divided among the core team and operations (29.5%), backers (29.54%), community programs (35.96%), and the community sale (5%).
- Release schedule: All tokens are released linearly and over time, with the release schedule starting on different dates for each group.
- Backers: A 2-year linear release starts three months after the release of the token.
- Company & team: A 4-year linear release starts four months after the release of the token.
- Community programs: A 4-year linear release starts on the token release dateю
- Community sale: A 4-month linear release starts on the token launch date, with 5/9 of tokens to be released on the token release date.
Axelar Staking Rewards & Transaction Fees
Validators produce new blocks, participate in multi-party signing, and vote on external chain states. Token holders stake their tokens by delegating them to a validator’s staking pool. Thus, they receive rewards less the validator’s commission.
The AXL token allows stakers to exercise governance over proposals, such as a parameter change or protocol upgrade.
Here are some key features of Axelar staking:
- Axelar staking rewards are distributed at the end of a block every six seconds.
- Compounding requires a new delegation. You need to withdraw staking rewards and re-stake them with the frequency if you want to make use of compounding returns. The steps required to re-stake AXL tokens vary from wallet to wallet. For CoinList users, AXL staking rewards are automatically re-staked to earn additional rewards until they choose to unstake and/or withdraw them.
Token holders receive rewards and fees by delegating to validators who participate in the underlying Tendermint consensus, participate in multi-party signing protocols, and verify events on external chains. The Axelar staking rewards and fees include:
- A base inflation reward: 8%.
- A bonus reward for verifying events on external chains: 1% per chain.
- Fees per transaction paid by users in source-chain tokens & swapped for AXL by services on the network.
What’s the Difference Between AXL & wAXL?
The native AXL token is the Cosmos-based version of the Axelar token that powers the network. wAXL is a wrapped, ERC-20 version of the Axelar (AXL) token that is represented on the Ethereum chain. This token can be used for trading on exchanges.
Some exchanges will not list the native version of the token (AXL), as supporting a new blockchain involves some degree of complexity on the part of an exchange. Instead, they will therefore support its ERC-20 version (wAXL) which is one such cross-chain representation of the AXL token.
Take a look at the key aspects:
- 1 AXL = wAXL and can be swapped by anyone via the Axelar permissionless layer through bridge front-ends, such as satellite.money.
- Native AXL addresses have the prefix 'axelar.'
- An AXL ERC-20 address has the same prefix '0x' as other Ethereum addresses.
Security is governed by the AXL token: it provides a system of incentives and rewards for token holders to delegate stakes to validators who run the software that secures the network.
The AXL token gives a lot of opportunities in the blockchain industry by supporting security and enabling cross-chain smart contract logic. Creating a sustainable token economy is an important aspect of developing the entire Axelar network.
