Delegated Proof-of-Stake on Axelar

Axelar employs a Delegated Proof-of-Stake (DPoS) consensus mechanism, allowing token holders to delegate their staking power to validators who secure the network and process transactions. This approach combines decentralization with efficient performance.

In Axelar’s DPoS system, validators collectively manage cryptographic keys using threshold key generation. This process involves distributing a private key among multiple validators, ensuring that a predefined subset must collaborate to produce a valid signature.

Threshold signing (this method distributes signing responsibility across multiple nodes. A predefined number of these nodes must cooperate to authorize a transaction, ensuring no single party holds full control) allows validators to jointly authorize transactions without reconstructing the entire private key. Each validator generates a partial signature, and once a sufficient number of these are combined, a complete, valid signature is formed. This method ensures that no individual validator can compromise the signing process, maintaining the integrity of cross-chain transactions.

The network is designed to accommodate changes in validator membership seamlessly. When validators join or leave, the threshold key shares are re-distributed among the current set of validators without disrupting network operations. This dynamic adjustment maintains the security and functionality of the network, even as the validator set evolves.

Network Security

Axelar’s security framework is built to ensure the safe and reliable transfer of assets and data across connected blockchains.

The network requires a high threshold of validators to collude before any malicious activity can succeed, setting a safety threshold of 90%. This means that an overwhelming majority of validators must conspire to compromise the network, making unauthorized actions highly improbable.

Axelar’s DPoS model promotes decentralization by allowing token holders to delegate their voting power to a diverse set of validators. This distribution of authority reduces the risk of centralization and enhances the network’s resilience against attacks.

The network incorporates fall-back mechanisms to address potential failures or stalls. These mechanisms ensure that, even in adverse conditions, the network can recover and continue to operate effectively, maintaining the continuity of cross-chain communications.

Axelar’s fall-back mechanisms are designed to operate in a decentralized manner, relying on the collective actions of validators rather than centralized control. This approach ensures that recovery processes are not vulnerable to single points of failure.

Governance of the Axelar network is conducted through a decentralized process, with validators and token holders participating in decision-making. This shared governance model allows for collective management of network parameters, protocol upgrades, and other critical aspects, fostering a collaborative and transparent environment.

Cross-Chain Gateway Protocol (CGP)

The Cross-Chain Gateway Protocol (CGP) is central to Axelar’s ability to connect multiple blockchain ecosystems. It facilitates cross-chain routing and delivery, enabling seamless communication between blockchains with differing consensus mechanisms and architectures.

CGP operates by deploying gateway smart contracts on each connected blockchain. These gateways act as entry and exit points for cross-chain messages and assets, allowing the Axelar network to monitor and facilitate inter-chain interactions. The protocol is designed to be adaptable, supporting the integration of new blockchains without imposing constraints on their existing structures.

By abstracting the complexities of cross-chain communication, CGP enables developers to build decentralized applications that can interact with multiple blockchains through a unified interface. This abstraction simplifies the development process and enhances the interoperability of applications within the blockchain ecosystem.

Cross-Chain Transfer Protocol (CTP)

Built atop CGP, the Cross-Chain Transfer Protocol (CTP) serves as an application-level protocol that allows decentralized applications to perform cross-chain requests. CTP provides a standardized set of APIs, enabling applications to interact with contracts on different blockchains as if they were on the same chain.

CTP supports various cross-chain operations, including asset transfers and data exchanges. Developers can leverage CTP to create applications that utilize resources from multiple blockchains, facilitating functionalities such as cross-chain token swaps and inter-chain data queries.

CTP simplifies the developer experience by removing the need to understand the internal logic of every connected blockchain. Instead of writing separate code for each chain, developers use a unified interface to route messages and interact with smart contracts across multiple networks.

The protocol is chain-agnostic and abstracts the differences between blockchains in terms of consensus, architecture, and smart contract environments. CTP takes care of message formatting, routing, and execution, making it easier to build applications that require interaction with different ecosystems, such as liquidity networks or oracle feeds.

Highlights

• Axelar uses Delegated Proof-of-Stake (DPoS), where validators are selected by token holders and collectively manage keys through threshold cryptography.
• Threshold signing allows validators to jointly authorize cross-chain transactions without ever reconstructing a full private key.
• The network is built to recover from failures using decentralized fall-back systems and shared governance among validators and token holders.
• The Cross-Chain Gateway Protocol (CGP) connects blockchains through gateway contracts that handle messaging and asset transfers between networks.
• The Cross-Chain Transfer Protocol (CTP) enables dApps to send function calls and assets across chains through a single API interface.