Since its inception, entrepreneurs have leveraged the permissionless, decentralized nature of blockchain technology to build applications free of the privacy and centralization issues associated with Web2. In the early days, an application was built on a single blockchain, which limited its growth to the community and liquidity of a single network. As the space continued to grow, teams that wanted to share their applications with other communities began to deploy their protocol on several different chains. It soon became clear that the blockchain future would involve having a single application on multiple chains. However, this is not enough. For the industry to achieve its full potential, applications must be interchain — that is, interacting with different chains in such an integrated way that the end user will not need to know, or care, which chain they are currently on.
Building interchain protocols is inevitable. We are beyond excited to see how teams leverage Axelar to usher in a new age of decentralized applications. Here are a few ideas we have:
An unfortunate side effect of the blockchain ecosystem’s rapid expansion is the disproportionate liquidity between newer and more established blockchains. This is intensified by liquidity providers who lock up large amounts of liquidity to earn a yield on their assets. A potential solution for decentralized exchanges to mitigate this discrepancy would be to leverage Axelar to implement features that distribute liquidity amongst all the chains on the exchange, significantly increasing the available liquidity of smaller chains.
From the user’s perspective, it could be as simple as becoming a liquidity provider on Uniswap on a large chain such as Ethereum, then selecting the other chains to lock their provided liquidity in. Under the hood the liquidity will be sent as an interchain transaction to be stored on other chains where Uniswap is deployed and is in need of funds. Rewards could be even greater for users willing to provide liquidity on smaller chains. The increased liquidity on these smaller chains would help reduce the amount of slippage when swapping tokens on the decentralized exchange.
A bond is a financial instrument that represents a debt or investment, where an entity provides funds to a borrower in exchange for periodic interest payments and the return of the original amount by a certain due date. By building on multiple chains, bonds can be leveraged to access funds from the DeFi ecosystems of other blockchains.
For example, an entity seeking funds can create a bond on chain A. The bond can then be transferred via Axelar to chain B. The bond on chain B can then be deposited into a pool, which consists of many other bonds that potential investors can buy into. Chain A’s bond issuer can now borrow tokens from investors on Chain B. This introduces a new way for users to raise liquidity and can be especially useful for chains with fewer users, because these chains can now access liquidity on larger blockchains as bonds. If a chain does not support a certain token, users will only need to bridge the bonds from one chain to another, rather than the tokens themselves.
DeFi continues to be a huge part of the decentralized ecosystem. A unified payment aggregator that allows merchants to accept cryptocurrency payments from multiple chains through a single interface would drastically simplify the payment process and open up new customer bases. The interface could utilize Safe Wallet, which can be programmatically created for merchants upon sign-up and use Axelar’s token transfer API to move cryptocurrency funds from the user’s wallet to the merchant’s preferred chain.
An open API could also be built for merchants to easily integrate this payment solution into their checkout flows, including payment reconciliation, fiat currency conversion, and support for stablecoins. This would simplify cryptocurrency acceptance for merchants while providing a seamless experience for users paying from different chains. Axelar would enable the transfer of value across blockchains to deliver a unified payment interface.
Decentralized reputation, or the idea that project contributors can earn NFTs and other assets to build a reputation, has been a highly touted feature of the Web3 space, especially in emerging industries such as DeSci. As reputation-based protocols grow, users’ hard-earned reputation shouldn’t be restricted to the community of any single chain. For example, if a reputation protocol offers “perks" for contributors who meet a certain threshold; it would be good for those contributors’ reputation assets to be transferable between chains.
Currently, some applications allow users to view and interact with yield-generating protocols on a single blockchain. As the number of DeFi protocols increases on different blockchains, however, users will want to take advantage of different yield opportunities across the entire Web3 ecosystem. A protocol could be built to do this using Axelar as a routing option to send a user’s assets to any connected DeFi protocol offering high yield. It could differentiate between different yield opportunities such as interchain staking, liquidity providing, and lending. Users would be able to decide their strategy as well as the token to receive as payment.
With more interesting blockchain projects on the rise, users might want access to earn passive income by staking on those chains. However, the process of swapping to the chain’s native token and staking can be cumbersome and can become complicated to manage for users looking to stake dozens of different tokens. Rather than needing to swap a token into many other tokens to stake on multiple chains, users could leverage an interchain protocol that can stake tokens on to many different blockchains under the hood. For example, an ETH holder could want to be a staker for Polygon, BNB chain, the Cosmos hub, and the Solana blockchain. With the interchain staking protocol, they could deposit their ETH, specify which chains they wish to stake their token on, and get paid natively in the native tokens of each of those chains.
The metaverse has been a growing narrative in the Web3 ecosystem. However, the term “metaverse" itself is misleading. With so many projects trying to develop their own metaverses, it only makes sense that there are numerous “metaverses” spanning across many blockchains. For the ecosystem to succeed, assets from these different metaverses will need to be able to be sent from metaverse to metaverse and chain to chain. A cross-chain real estate application that manages real estate assets and transactions across blockchains could be used for real estate in the metaverse.
Real estate could be tokenized as NFTs representing fractionalized ownership shares that are transferred across chains with Axelar. Complementary dApps on each chain would be able to access shared property ownership data. Transactions would be able to use Axelar’s capabilities to execute automatically across multiple chains, unifying real-estate management and making NFTs portable across different chains. User experience would be seamless — the owner would not need to know that there are parcels of land from different blockchains under the hood.
Games from different blockchains could even be played in a metaverse such as Decentraland, with the game’s logic and assets existing on different blockchains, connected seamlessly via Axelar. An interchain real estate management dApp could also be used for assets outside of the metaverse as fractionalized ownership of property continues to grow.
The Web3 environment needs many critical improvements in order to go mainstream. One of them is an improved non-custodial wallet experience: a smart wallet where users no longer need to switch between networks on different chains. Instead, they can spend and hold assets across different blockchains without even needing to know which chain they are interacting with. This flexibility — never again needing to “switch to the right chain" or “get the right asset" — will make the Web3 ecosystem much more usable and competitive with existing Web2 applications. This universal wallet could be built on Axelar by leveraging the General Message Passing service along with the chains already on the Axelar network. It would also be able to make new types of transactions, such as sending a wrapped aUSDC token from the wallet’s balance on two different blockchains (for example, Ethereum and Polygon) to a destination chain (for example, Avalanche). Users would have the ability to consolidate their liquidity with a one-click transaction.
As the Web3 space continues to evolve, many native companies have shifted to paying their employees partially (and in some cases fully) in tokens. To handle this growing trend, a Web3 expense-reimbursement app that runs across blockchains using the Axelar network would allow employees to submit expenses from any chain and get reimbursed on their preferred blockchain using Axelar’s token-transfer API. This app could support both direct crypto reimbursements or fiat currency by integrating with payroll providers. All data would be transparent and verifiable on-chain.
The past few years have seen the explosive rise of NFT marketplaces, but the large amount of fragmentation across the NFT ecosystem between different chains continues to hinder the growth of the entire Web3 ecosystem. As of December 2023, both OpenSea and Rarible have limited blockchain support, with OpenSea offering support for ten blockchains, while Rarible supports only four. The ecosystem is in need of a service that can quickly and easily onboard new blockchains to NFT marketplaces. If such a service is built on Axelar, it would have instant access to all the blockchains on the Axelar network. NFT developers could then focus on building out new features. An interchain marketplace will also have access to the most liquidity from buyers and the most demand from suppliers.
An interchain marketplace platform could also allow users to create listings for real-world items — like eBay or StockX for a Web3 environment. This platform would store each listing’s metadata on IPFS and would be able to accept cryptocurrency payments. When a purchase is made, it would automatically transfer funds from the buyer’s wallet into an escrow account, then to the seller’s wallet upon confirmati
Cryptocurrency airdrops have proven to be one of the quickest and most effective ways to jumpstart a community for a project. The problem is that a user must be set up in a project’s specific protocol before they can receive tokens, which excludes many potential candidates from accessing the airdrop. Airdrops conducted on multiple blockchains can serve as a form of cross-promotion. Additionally, projects can tap into different marketplaces and exchanges by distributing tokens on multiple blockchains. This diversifies the trading landscape, potentially increasing liquidity and trading opportunities for a token.
A system that stores on-chain vaccine credentials and makes them verifiable across chains could be used to securely prove vaccination status. This system would utilize two-way Axelar General Message Passing to enable communication between the Enrollment Service on the source chain and the verification service on other chains, enabling users on different blockchains to query from a single source of truth.
Decentralized ads are gaining popularity in the Web3 ecosystem. A decentralized advertising network powered by Axelar would be able to place ads on different chains and track performance in a unified way. When an advertiser deposits funds onto a preferred chain, Axelar would transfer them to the ad network’s treasury. Publishers would integrate the ad network SDK to display ads on their decentralized apps or websites and emit tracking events on-chain. The smart contracts, connected by Axelar, would distribute payments to publishers based on views and clicks across all chains. All the tracking data would be public on-chain, assuring detailed, verifiable reports.
These ideas are just scratching the tip of the iceberg in terms of the possibilities of what can be built with Axelar. As the Web3 space continues to evolve, the adoption of interchain use cases will not only be beneficial but essential for the sustained growth and maturation of the decentralized ecosystem. The interchain revolution is not just on the horizon; it is a compelling reality that holds the promise of reshaping the future landscape of decentralized applications and services, presenting a ripe opportunity for talented teams to change the industry.
- Node capital provides small but quick grants to get started.
- Post to the Axelar community , gather feedback and submit an on-chain proposal to get funding from the community pool.
We looking forward to seeing what you’ll build.