AXL Token Utility

The AXL token is the core asset used across the Axelar network for securing operations, enabling governance, and powering transactions. It plays a central role in the delegated proof-of-stake system, where validators stake AXL to participate in consensus, and token holders can delegate their AXL to validators in exchange for a share of rewards. This staking process helps align incentives between network participants and ensures that validators act in the network’s best interest. AXL is also used for governance, allowing token holders to vote on proposals related to protocol changes, network parameters, and economic updates. This gives the community a direct way to influence how the network evolves. When users initiate cross-chain transfers, they pay fees in the native asset of the source chain (like ETH or AVAX), which are automatically converted to AXL through on-chain smart contracts.

AXL Supply and Allocation

The AXL token supply is distributed across strategic categories to support long-term network development, security, and ecosystem growth. Below is a breakdown of how the token allocation is structured:

• Community Programs (30.96%): The largest allocation is dedicated to community-focused initiatives, including staking rewards, ecosystem incentives, developer support, and user growth campaigns. This ensures that those contributing to the network’s activity, liquidity, and adoption are consistently rewarded, supporting long-term participation.
• Company – Core Team (17%): Reserved for the founding team and key contributors, this allocation acknowledges their role in building and maintaining the network. These tokens are typically subject to a vesting schedule to promote long-term alignment and prevent short-term sell pressure.
• Seed Round (13.39%): This portion is allocated to early investors who provided initial funding during the project’s earliest stages. Vesting schedules are applied to ensure stability and to align these early supporters with the project’s development over time.
• Series A Investors (12.64%): Allocated to investors who joined during the first major funding round, supporting the scaling and expansion of the Axelar network. Vesting helps balance investor incentives with sustained project growth.
• Company – Operations (12.5%): Designated for ongoing operational expenses, including infrastructure, staffing, and development. This ensures the core team has the resources necessary to maintain the network’s performance and roadmap delivery.
• Insurance Fund (5%): Set aside to manage unforeseen events or network emergencies. This reserve provides additional security and resilience to the Axelar ecosystem.
• Public Sale (5%): Aimed at broadening token distribution, this allocation was made available to the public to encourage widespread ownership and community participation beyond early investors.
• Series B Investors (3.5%): Represents capital raised in a later funding round to accelerate ecosystem and technology development, helping to expand Axelar’s cross-chain infrastructure.
• Public Sale via Gate.io (0.01%): A minimal portion was distributed through a public offering on Gate.io, contributing to initial market liquidity and public access.

AXL Vesting Schedule

The AXL token follows a structured vesting schedule designed to gradually release supply over several years, supporting long-term alignment between the project, its contributors, and its investors. As shown in the chart, token unlocks began in early 2023 and are distributed incrementally through mid-2026, with each category—such as the core team, seed round, Series A and B investors, operations, and community programs—releasing tokens over time in a predictable manner. The largest portion of tokens is allocated to community programs, which steadily increase throughout the period, followed by allocations for the core team, seed investors, and Series A participants. This gradual release helps avoid sudden supply shocks and ensures that early contributors and team members remain incentivized to support the network’s growth. By mid-2026, most categories approach full unlock, with the total circulating supply nearing 1.25 billion tokens.

AXL Economic Design

Axelar’s economic design is focused on long-term sustainability, with mechanisms in place to balance network incentives and token supply. Validators and delegators earn AXL through an inflationary rewards model, but inflation is managed by limiting how rewards scale as new chains are added. Instead of increasing issuance with each new connection, Axelar now uses fixed reward pools, ensuring validator incentives are drawn from a capped allocation. This prevents unnecessary expansion of the token supply and keeps inflation under control. To counterbalance issuance from staking rewards, the network also includes a fee-burning mechanism: AXL used to pay for cross-chain transactions is sent to a burn address, permanently removing it from circulation. As network usage increases, this mechanism helps stabilize or even reduce the total token supply over time.

Highlights

• AXL is used for staking, governance, and fee payments, making it essential for securing the network and enabling cross-chain operations.
• Token supply is allocated across key categories such as community programs (30.96%), the core team (17%), seed and Series A investors, operations, and public sales.
• AXL tokens are released gradually through a vesting schedule running from 2023 to mid-2026 to maintain market stability and long-term alignment.
• Validator rewards follow an inflationary model, but new chain integrations use capped reward pools to prevent excess issuance.
• A fee-burning mechanism removes AXL from circulation over time, helping offset inflation and supporting a stable or deflationary supply model.