Axelar introduces Interchain Token Services
Axelar has implemented Interchain Token Services (ITS) as a means to resolve the challenges associated with the complexities of distributing a token across multiple chains. This most recent application preserves the attributes and fungibility of each ERC-20 token while allowing it to traverse any EVM-compatible blockchain along the path Axelar took.
The new technology, known as the Interchain Token Service (ITS), enables ERC-20 tokens to maintain their fungibility and other characteristics while moving across any of the 15 EVM-compatible blockchains in Axelar’s orbit. Future additions to the roster are in the works.
Jason Ma, the DeFi Head of Axelar, asserts that ITS is permissionless for use and that tokens undergo minimal trust bridging via a mint or burn mechanism. Nevertheless, this is not presently accessible in the industry.
LayerZero OFT, the available alternative solution, is not a code-free solution. The developers have informed the company that the process requires a substantial investment of time and effort.
Frax intends to publish its own Ethereum rollup in the coming days. Fraxtal implements ITS initially. Co-founder of Fraxtal Nader Ghazvini is confident that the proposed solution will appeal to developers affiliated with its chain.
By initially integrating Interchain Token services, Fraxtal Layer 2 enables seamless and code-free interoperability among multiple developers establishing connections at the grassroots level.
It is literally possible to distribute a new token across multiple chains by utilizing ITS. It includes a token manager that facilitates the synchronization of the positions of traditional tokens that are currently present on different blockchains. This renders it similar to Circle’s cross-chain transfer protocol (CCTP), which is employed to facilitate traditional USDC transactions between chains without the need for a centralized counterparty. According to Ma, it can be described as a decentralized open-source CCTP in which individual protocols are permitted to independently implement and position themselves.
In the case of the token manager, it is used by teams that want to connect conventional token positionings, such as achieving complying requirements.
They prefer conventional minting methods for chains such as Polygon, Ethereum, and Arbitrum, which are regarded as essential and possess substantial liquidity. In the case of other chains, they may utilize ITS in conjunction with an Axelar variant of the identical token.
As of now, the support is exclusively present in EVM-chains. Nevertheless, as a Cosmos chain, Axelar intends to advance the Cosmos Interchain solution in the future.
