Axelar has launched the Interchain Token Service (ITS), a solution designed to enhance the interoperability of ERC-20 tokens across all Ethereum Virtual Machine (EVM)-compatible chains.
Among the early adopters of this service is Sushi, a decentralized exchange (DEX), aiming to use the ITS to foster seamless interactions of its native SUSHI token across multiple blockchain networks.
Axelar’s ITS primarily focuses on the interoperability of ERC-20 tokens across all EVM-compatible ecosystems. These tokens are generated on a 1:1 ratio and are managed through Axelar’s native computing environment, the Axelar Virtual Machine. The newly revealed service is set to provide a muchj-needed boost to the ease of token interaction across Ethereum-compatible chains.
Decentralized exchange Sushi is set to be one of the first adopters of the “interchain tokens” provided through this service. Sushi's team plans to use the ITS to facilitate seamless interaction of its native SUSHI token across multiple chains. Initial deployment will ensure interoperability of SUSHI across Arbitrum, Ethereum, Optimism, and Polygon. This move will enable SushiSwap, Sushi's decentralized exchange, to manage its multichain deployments more efficiently via the Axelar network.
Jared Grey, Sushi’s head chef, emphasized the utility of this service, stating:
"Axelar’s Interchain Token Service unlocks a more seamless, interchain experience for Sushi users."
Tackling Security and Compatibility ChallengesThe traditional approach to facilitating cross-chain transfers for Web3 applications generally relied on bridged token versions. These bridged versions could be exposed to inherent security risks and compatibility issues. Axelar’s interoperability solution, according to co-founder Sergey Gorbunov, addresses these challenges.
Gorbunov noted that Axelar's innovative approach utilizes specialized smarlt contracts and a software development kit, which enables developers to manage interchain tokens more efficiently.
Notably, Gorbunov says that the bridged versions of tokens, similar to SUSHI, currently lack fungibility and carry a bridge risk. In contrast, Interchain Tokens represent a "true" cross-chain interoperability merged with security and simplicity.
The news comes after Axelar's announcement following its partnership with Chainlink's cross-chain interoperability protocol.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
