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Author: Petru Melnic
Publication date: 30.04.2024
Web3 is still in its early stages, but it is experiencing massive growth in demand and usage. Innovative consensus mechanisms and smart contract languages are supporting new decentralized applications (dApps) that aim to serve the next billion users. There is a strong and rapidly growing demand for cross-chain services between these innovative ecosystems.
Current Problems with Cross-Chain Infrastructure
Layer 1 networks offer robust security guarantees, but weaker cross-chain infrastructure, often made up of one-to-one bridges, does not offer the same level of security. This creates a critical gap. Consequently, a universal network is needed to manage, route, translate, and secure on an "any-to-any" basis between connected blockchains.
The Axelar Solution
Axelar provides secure cross-chain communication for Web3. With this infrastructure, dApp users can effortlessly interact with assets and applications across any blockchain with ease. Developers can build on the best platform for their use case, with access to users, assets, and applications across each ecosystem.
Benefits of Axelar:
Ease for blockchains to connect and communicate with other chains.
Cross-chain composability for dApp developers.
Enables users to seamlessly interact with applications across multiple ecosystems.
Rich suite of tools for developing Web3 applications.
Enhanced security through its unique architecture
The AXL Token Economy
The AXL token economy is designed to support the Axelar network in achieving its key objectives: security, decentralization, longevity, and ecosystem growth. The initial allocation of AXL tokens was 1 billion tokens, distributed to the team, the company, investors, a community sale, and community programs. Furthermore, the token release schedule is structured to ensure long-term alignment of interests. Transaction fees, rewards, and burn mechanics for AXL have been defined and explained in detail.
Successfully building a token-based economy requires aligning the token economy with key objectives from the outset. Accordingly, Axelar and the AXL token prioritize the following critical goals: security, long-term sustainability, decentralization, and a thriving ecosystem. Importantly, ensuring that a large portion of the AXL token is circulating in the community is essential for the long-term health of the token economy.
Is Axelar a Good Investment?
Axelar offers an innovative solution to a significant problem in the Web3 space. The team has extensive experience in the blockchain industry and has built a robust infrastructure. The token economy is well-designed and aligned with the long-term goals of the project.
At the moment I am at the resistance at $1.26, if we manage to close the week above this value, we have a clear path to $1.7-2$, but if we do not manage to close above this value, the next support would be at $0.89, in order to make the next decisions we wait for this week's close, the accumulation in the range 0.89-1.26 is a good accumulation for the next time, with a target in the area of $3-4.
However, it is important to note that Axelar is still a relatively new project and there are risks associated with any cryptocurrency investment. It is important to do your own research and only invest an amount that you can afford to lose.
Conclusion
Axelar aims to solve a fundamental challenge within the rapidly growing Web3 space – secure, seamless cross-chain communication. The project boasts a strong team, a unique technical approach, and a token model seemingly designed for long-term alignment with the network's success. While a relatively new project with inherent risks, Axelar has the potential to be a solid investment opportunity. Its commitment to decentralization and focus on facilitating cross-chain interactions position it to capitalize on Web3's expansion. If you believe in a future where blockchains seamlessly interact, Axelar is a project worth investigating further.
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