Summary
Cross-chain messaging protocols have gained popularity, with Wormhole reaching 1 billion cross-chain messages and transferring over $39 billion through its token bridge. However, current methods of transferring assets across blockchains, such as blockchain bridges, are challenging to decentralize and come with security risks. Custodial bridges introduce a centralized entity, which goes against decentralization principles. Unified liquidity pools can improve capital efficiency but require enough liquidity to fulfill all requests. The focus now is on cross-chain messaging solutions to improve bridging infrastructure. Axelar’s General Message Passing (GMP) acts as a translator for different networks, simplifying the bridging process. However, GMP is still in its early stages, and the next stage for Axelar is programmable interoperability that could surpass the need for bridges. Wormhole is also working on improving interoperability using zero-knowledge proofs (ZK) to enhance trust assumptions.
Key Points
1. Cross-chain messaging protocols, such as Wormhole and Axelar, have gained popularity in the past year, with Wormhole surpassing 1 billion cross-chain messages and $39 billion in transferred volume.
2. Blockchain bridges are commonly used to transfer information and assets between different blockchain networks, but they are challenging to decentralize and come with security risks.
3. The focus is shifting towards improving existing bridging infrastructure through cross-chain messaging solutions like Axelar’s General Message Passing (GMP), which acts as a translator for different networks and simplifies the bridging process. However, GMP is still in its early stages, and the next stage of evolution for Axelar aims to enable programmable interoperability to potentially replace bridges altogether.