SECTION 1: APPLICANT INFORMATION
Provide personal or organizational details, including applicant name, contact information, and any associated organization. This information ensures proper identification and communication throughout the grant process.
Applicant Name: Marcin Pawel, Axelar Foundation
Project Name: Axelar Network
Project Description:
Axelar Network provides secure cross-chain communication for Web3, enabling the creation of Interchain dApps that interact with multiple blockchains, using a proof-of-stake model for security. Squid, a protocol within the Axelar ecosystem, facilitates cross-chain swaps and liquidity routing by leveraging existing DEXs, allowing for seamless transactions across different chains with a single click. This technology is integrated into top DeFi projects such as dYdX, Uniswap and Lido Finance and wallets, including Metamask and Ledger, enhancing the interoperability and user experience within the crypto ecosystem. You can try out the applications below:
- Satellite: https://satellite.money/
- Squid: https://app.squidrouter.com/
Team Members and Roles:
Interop Labs is the initial developer of Axelar Network. The Interop Labs team is formed by global experts in distributed systems, cryptography and technology with backgrounds from top institutions like MIT, Google and Consensys.
- Co-founders: Sergey Gorbunov and Georgios Vlachos
- Core Engineer: JoĂŁo Sousa
- Head of DeFi: Jason Ma
- Head of Legal: Jason R
- Head of Operations: Ali B
- Ecosystem Lead: Marcin P
- Community Lead: Kate S
- APAC Lead: Shawn L
Here is the Interop Labs team page.
Axelar Network Links
- Website: https://axelar.network/
- Twitter: https://twitter.com/axelarnetwork
- Developer Documentation → https://docs.axelar.dev/
- Block Explorer → https://axelarscan.io/
- GitHub → GitHub
- Squid Docs: https://docs.squidrouter.com/
- Twitter: https://twitter.com/axelarnetwork
Contact Information
Point of Contact (forum handle): @MarcinAxelar
Point of Contact’s TG handle: marcinx
Twitter: https://twitter.com/axelarnetwork
Email: marcin@axelar.foundation
Do you acknowledge that your team will be subject to a KYC requirement?
YES
SECTION 2a: Team and Product Information
Provide details on your team’s past and current experience. Any details relating to past projects, recent achievements and any past experience utilizing incentives. Additionally, please provide further details on the state of your product, audience segments, and how you expect incentives to impact the product’s long-term growth and sustainability.
Team experience:
- Co-founders Sergey Gorbunov and Georgios Vlachos were founding team members at Algorand and are winners of multiple academic awards in cryptography. ​​
- The assembled team has deep expertise in cryptography, distributed systems, and consensus. The core engineering team has research experience in some of the top academic institutions (e.g., MIT, Waterloo) and professional experience in some of the most renowned technology companies, such as Google, IBM, and Microsoft.
- Core engineer JoĂŁo Sousa built the first practical implementation of Byzantine consensus, BFTSmart, which has inspired many researchers and this industry over the years.
- Sergey Gorbunov has designed and published many core cryptographic protocols. He also led the effort to standardize BLS signatures; the standard in its draft in CFRG was followed by Ethereum 2.0 implementations and others.
- Overall, the team has been assembled to build best-in-class security from the ground up: from design to engineering and operations around the network.
- Here is our team page
What novelty or innovation does your product bring to Arbitrum?
Axelar Network is fully aligned with the Arbitrum Foundation’s vision, which seeks to empower the next billion users to experience web3 through the security of L2s. Our primary focus lies in addressing a critical component facilitating this transition - streamlining user onboarding. Getting users onboarded involves navigating through multiple steps, resulting in a rather bewildering and convoluted experience. With Squidrouter, users can now effortlessly onboard to Arbitrum from over 50 blockchain networks with a single click, taking less than 30 seconds to complete the process.
Is your project composable with other projects on Arbitrum? If so, please explain:
Yes, Axelar Network is currently integrated with several projects in the Arbitrum ecosystem such as Lido Finance, Camelot, Uniswap and Sushi. It facilitates seamless interoperability and composability with other blockchain protocols through its decentralized network, enabling these applications to communicate and transact across different chains effortlessly.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
LayerZero is an example of a comparable protocol, but there are some notable differences, such as the approach to decentralization.
How do you measure and think about retention internally?
At Axelar Network, we are committed to sustainable and long-term growth, and this principle has guided the implementation of all our programs to date. Our long-term goal is aligned with that of Arbitrum, focusing on onboarding 1 billion users to the crypto ecosystem and ensuring their experience is as straightforward and seamless as possible.
Relevant usage metrics:
- Total Volume Processed: > $7.8B as seen on axelarscan.io
- Total Txns Processed: >1.4M
- Volume Onboarded to Arbitrum: > 89M
- Transactions Onboarded to Arbitrum: > 32.000
- 50+ Projects Leverage Axelar for a Smoother Bridging Experience
Axelarscan Dashboard: Transactions from Arbitrum:
Axelarscan Dashboard: Transactions to Arbitrum:
Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan: YES
Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal? NO
SECTION 2b: PROTOCOL DETAILS
Provide details about the Arbitrum protocol requirements relevant to the grant. This information ensures that the applicant is aligned with the technical specifications and commitments of the grant.
Is the protocol native to Arbitrum?:
Yes - Arbitrum is one of the 54+ chains that Axelar connects
On what other networks is the protocol deployed?:
Axelar is deployed on 54+ chains, such as Cosmos, Optimism, Base, Fantom, Avalanche, Ethereum, and many others.
What date did you deploy on Arbitrum mainnet?: [Date + transaction ID. If not yet live on mainnet, explain why]
December 2022
The first transaction on arbitrum, which created our gateway contract on the chain: Arbitrum Transaction Hash (Txhash) Details | Arbiscan
Do you have a native token?:
Yes, link to the tokenomics docs: An Overview of AXL Token Economics | by Axelar Foundation | Medium
Past Incentivization:
We have been previously incentivizing axlUSDC pools on Camelot.
We did not incentivize on Camelot for long enough to get meaningful data. On other chains, we have been able to attract up to 1-2m of TVL at a rate of 12-15% APR.
Current Incentivization: How are you currently incentivizing your protocol?
We are currently not incentivising.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
NO
Protocol Performance: Detail the past performance of the protocol and relevance, including any key metrics or achievements, dashboards, etc.
Axelar Network is the fastest-growing interoperability solution based on data from Binance Research.
Since Axelar added support to the Arbitrum mainnet in December 2022, it has seen significant cross-chain transfers to and from the Arbitrum ecosystem. As per Axelarscan, Arbitrum is one of the most popular source chains, with over 50,000+ transactions amounting to over $78 million. Moreover, 32,000+ transactions amounting to over $89 million opted for Arbitrum as the destination chain.
TVL ( $357.7M ): TVL | Axelarscan
Protocol Roadmap:
Axelar Network 2024 Roadmap:
- Axelar Virtual Machine becomes a platform for open-source tools to enable chain-agnostic development, running on decentralized cross-chain infrastructure.
- Permissionless connections for arbitrary chains via Interchain Amplifier, taking potential network effects out to the 100s of blockchains in the Ethereum L2verse.
- Interchain Tokens go beyond bridges, extending native fungibility and custom functionality across all connected chains.
- A gas-burning mechanism is on the AXL token governance roadmap, with the potential to turn the network deflationary, further securing Axelar network.
- Integrating diverse consensus approaches, including Solana, Stellar, and Move-based chains like Aptos and Sui.
- A gas-pricing overhaul will improve the accuracy of services that estimate cross-chain gas fees over Axelar network.
Audit History & Security Vendors:
The code of the Axelar network undergoes constant and meticulous auditing processes. You can find the audit details on Axelar’s GitHub page at GitHub - axelarnetwork/audits: Axelar network audits
We also have a bug bounty program, more details can be found here: Axelar Network Bug Bounties | Immunefi
Security Incidents: Has your protocol ever been exploited?
NO
SECTION 3: GRANT INFORMATION
Detail the requested grant size, provide an overview of the budget breakdown, specify the funding and contract addresses, and describe any matching funds if relevant.
Requested Grant Size: 1,500,000 ARB
Justification for the size of the grant:
This grant targets onboarding 100,000 new users to Arbitrum. Moving cross-chain is still very costly for the average user, given they have to pay for gas on the source chain and gas on the destination chain.
With the Arbitrum grant, we intend to subsidize up to 80% of the gas for users onboarding from any 50+ chains supported by Axelar, making it much more accessible and easier for new users to experience the benefits of being part of the Arbitrum ecosystem. To subsidize user gas fees, we will not sell ARB tokens. We will distribute to users ARB tokens on Arbitrum, 50% will be allocated for this subsidy
50%-70% of the ARB grant roughly equates to $2m USD. Our estimate is the average cross-chain gas cost is around $2.5 (There’s lots of variance given that cross-chain gas cost is highly dependent on the source chain). By subsidizing 80% of the cross-chain gas cost, the average user will only have to pay $0.5 to onboard to Arbitrum. This is considered affordable for almost all users. Hence, we can onboard 1 million users to the Arbitrum ecosystem with this budget.
Axelar will use the allocated $ARB tokens to tackle the user onboarding challenge head-on. We will employ these tokens to:
- Significantly reduce the overall cost incurred by users when onboarding to Arbitrum from a wide range of over 50 blockchain networks, thus subsidizing gas expenses and making the transition more cost-effective
- Deploy other incentives to power Squid’s cross-chain swaps
Grant Breakdown:
- 60% to subsidize gas costs for users onboarding to Arbitrum
- 40% to incentivize axlUSDC, and axlETH pools to help with user onboarding
**Funding Address: arb1:0x6a822fa11F051358deE4A9E350fBd3be2fDFd7B2
Funding Address Characteristics: The funding addresses will be automated incentive distribution contracts, which must be deployed.
Treasury Address:
Contract Address:
axelar16fw3uu39jeelneq4plma3j7stwnheqz7twc0wh, axelar1jdutc3hv4xytk3vcnde8th5zx26ggjrwagt059
or
0x3DE3A257f0e50AF9bf48Aea633e06085695D9C1B
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Clearly outline the primary objectives of the program and the Key Performance Indicators (KPIs), execution strategy, and milestones used to measure success. This helps reviewers understand what the program aims to achieve and how progress will be assessed.
Objectives: Introduce 100,000 new users to Arbitrum
Execution Strategy:
We will aim to achieve approximately $1 million in TVL on axlUSDC<>UDSC and axlETH<>ETH pools. We will incentivize this liquidity on Ramses Exchange or Camelot. The current $250k of protocol-owned liquidity is currently on Uniswap.
-
30-50% of incentives - $ARB tokens
-
will be allocated to participants who contribute liquidity to axlUSDC and axlETH pools
-
and/or allocated to $ARB pools within Axelar ecosystem
-
50-70% to subsidize gas costs for users onboarding to Arbitrum
These incentives are not just about attracting users to Arbitrum but about retaining them. We anticipate that users will be drawn to stay within the Arbitrum network due to its cost-effective and rapid transaction capabilities, seamless user experience, and diverse and thriving ecosystem of applications.
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric? [Provide relevant design and implementation details]
We expect that the combination of cost-effective transactions and a user-friendly interface will foster compelling and convenient environment for sustained engagement. Squid is universally praised for its exceptional UI and UX, alongside the rapidity of its transactions and unmatched support for numerous chains.
Specify the KPIs that will be used to measure success in achieving the grant objectives and designate a source of truth for governance to use to verify accuracy.
KPIs:
-
New users onboarding to Axelar Ecosystem
-
TVL on axlUSDC<>UDSC and axlETH<>ETH pools
Grant Timeline and Milestones:
The rewards will be distributed linearly targeting 1m TVL at 15% APR over 12 weeks.
- week 1-4: Introduce 20,000 new users to Arbitrum
- week 4-8: Introduce 30,000 new users to Arbitrum
- week 8-12: Introduce 50,000 new users to Arbitrum
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
Receiving a grant would significantly enhance Axelar Network’s ability to contribute to the growth within the Arbitrum ecosystem, primarily by advancing our mission to simplify and streamline the user onboarding experience. Aligned with the Arbitrum Foundation’s vision of empowering the next billion users to engage with web3 through the security and efficiency of Layer 2 solutions, Axelar recognizes the critical barrier that complex onboarding processes present. Squid Router is designed to address this challenge directly by enabling seamless onboarding to Arbitrum from over 50 blockchain networks with an unprecedented ease of use.
Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream?
YES
SECTION 5: Data and Reporting
OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL 21. Along with this list, please answer the following:
Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO? Are there any special requests/considerations that should be considered?
YES
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?
Yes, we will provide a breakdown of the campaign progress
First Offense: In the event that a project does not provide a bi-weekly update, they will be reminded by an involved party (council, advisor, or program manager). Upon this reminder, the project is given 72 hours to complete the requirement or their funding will be halted.
Second Offense: Discussion with an involved party (advisor, pm, council member) that will lead to understanding if funds should keep flowing or not.
Third Offense: Funding is halted permanently
Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains. (NOTE: No future grants from this program can be given until a closeout report is provided.)
YES
Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?:
YES