Satellite demonstrates the capabilities of the Axelar protocol, the ultimate goal of which is to unite all blockchains into one ecosystem. Now more than ever, blockchains need the ability to be cross-chain compatible, and the most critical aspect is the easy transfer of tokens.
This article discusses Satellite as an efficient cross-chain asset transfer application.
What is Axelar?
Axelar is a decentralized protocol that serves as an overlay network to provide secure communication across blockchains. The Axelar project offers consensus-agnostic protocols, a dynamic validator set, and developer tools for creating cross-chain decentralized applications (dApps) spanning numerous networks and blockchains, most notably linking Cosmos to EVM chains. Axelar is open to proposals from anyone who wants to:
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connect a new blockchain to Axelar (which will automatically interoperate with all currently connected chains);
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add new application-level protocols supported by the Axelar network and its routing and delivery protocols.
Developers can build and distribute proposals to all validators, and community members can choose which ones to adopt.
What Is Satellite?
Satellite is a decentralized cross-chain asset transfer application that allows people to send assets they own on one chain to an address on another chain. Satellite is the first application that shows how Axelar connects all Cosmos chains via IBC and its GCP protocol with other ecosystems. Axelar provides the translation layer that enables a free flow of assets from Cosmos to all Axelar-connected networks. Axelar supports different “languages” for processing, completing, and executing transactions.
At the moment, Axelar supports transactions between Arbitrum, AssetMantle, Avalanche, Axelar, Binance, Celo, Comdex, Cosmoshub, Crescent, E-Money, Ethereum, Evmos, Fantom, Fetch, Juno, Kava, Ki, Kujira, Moonbeam, Osmosis, Polygon, Regen, Secret, Stargaze, Terra, Terra Classic, and Umee.
How Does Satellite Work?
Satellite facilitates quick and straightforward token transfers between many blockchains. Firstly, Satellite will generate a one-time address for the transaction when the user has selected the critical parameters for the transfer of assets, chosen the direction, and specified the recipient’s address. The system will wait for the receipt of tokens at this address and then send them to the intended recipient. All flows happen automatically after the assets come to the generated address.
A one-time address will be generated and issued by the Axelar network. This is a courier identification number for your transfer, not a wallet or its equivalent. This uncommon use of a cryptocurrency address is named an IBC transfer. The technology rooted in the Cosmos ecosystem is often lauded and compared to the TCP/IP Internet protocol. The only difference is that all the data it sends is cryptocurrency tokens. IBC enables you to work with any anonymous data, whereas other protocols are honed for the application requirements of specific networks, growing their usefulness only inside a limited field. It allows us to keep the full range of options such an architecture offers without overly standardizing the protocol or imposing additional layers of regulations. By doing so, we can keep all the possible alternatives offered by such an architecture without overly standardizing the protocol or adding more levels of regulations.
Using Satellite, token transfers between networks happen automatically. Still, the user needs to be careful when typing contract addresses because a typo can result in an irreversible loss of assets.
How to Transfer Tokens Through the Satellite?
Our recent article, “How to Convert wAXL to AXL,” covers the practical aspects of using Satellite, including converting wAXL to AXL. The example applies to other tokens as well.
Key Features and The Importance of the Satellite
Web3 is actively growing and developing. As the ecosystem grows, so must the infrastructure to support the influx of talent, innovation, energy, and capital into the marketplace. The Axelar team created Satellite to connect this growing ecosystem and provide end users with a more accessible and decentralized way to transfer assets without high fees and security issues.
Generally, one of the barriers hindering the widespread adoption of cryptocurrencies has been identified as the limitation of interoperability between various blockchains. As a result, approaches like cross-chain bridges represent a significant step in the direction of the mass adoption of blockchain technology. Additionally, cross-chain bridges, like Satellite, improve the user experience while reducing transaction costs.
At the end of January 2023, Axelar unveiled native EVM cross-chain asset transfers. Axelar has revealed a service that enables interchain dApps to move native EVM tokens between chains without the additional step of wrapping first into an ERC-20 on the source chain before transferring to another chain – or unwrapping after returning to the source chain.
For instance, a user can send ETH from Ethereum to any of Axelar’s connected chains without first converting to WETH. Users can instantly get native ETH by sending axlWETH back to their Ethereum wallet from another chain. Developers can seamlessly incorporate these features into dApps: when the dApp uses the Axelar SDK to produce a deposit address, it becomes accessible. Refer to this article for more details.
Transaction Fees
To cover network-level transaction (gas) expenses between chains, the Axelar network levies a relayer gas fee for all cross-chain token transfers. Users pay the fee on the source chain they are sending from, plus 0.1% of the asset transferred is assessed to cover the fees on all other chains. The amount of the relayer gas cost simply relies on the following:
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the asset;
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the source chain;
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the destination chain.
The costs of Ethereum gas play a significant role in determining when/if the network fees must be changed. The system calculates the relay charge needed to cover the average gas cost for all connected chains.
Everyone can conveniently calculate the relayer gas fee in the Axelar docs. Select the asset, source, and destination chain to learn the total cost.
Built on Cosmos, Axelar gains access to the ecosystem’s best features, including IBC data bundling technology and the capacity to gather and handle such data. Axelar stands out from other ecosystem blockchains, including Cosmos itself, thanks to its unique technology stack. Axelar features a novel protocol enabling deployment and subsequent interaction with “gateways,” special smart contracts. Axelar’s gateway technology allows token transfers between any supported blockchains.
If you have any questions regarding staking AXL, feel free to contact our AXL Blockchain Manager on Twitter.
