Axelar and Manta Network co-founders connected for an ask-me-anything (AMA) to discuss interoperability, Web3 use cases and the challenges of building Polkadot-EVM cross-chain.

The two projects today announced a partnership in which Axelar will serve as the interoperability infrastructure to bridge private assets across layer-one blockchains, connecting Polkadot-EVM cross-chain, and other ecosystems as well, with user privacy.

Manta Network is focused on building a better Web3 user experience, with privacy guarantees delivering end-to-end privacy guarantees for blockchain applications. Axelar is a decentralized interoperability network connecting all blockchains, assets and apps through a universal set of protocols and APIs.

What follows is an edited Q&A based on Axelar co-founder Georgios Vlachos’ live conversation with Manta Network CEO and co-founder Shumo Chu on Feb. 2. You can listen to the entire conversation on Axelar’s YouTube channel. To learn about future conversations with Web3 luminaries, check out Axelar’s Discord #events channel or follow us on Twitter.

Georgios Vlachos, Co-Founder, Axelar Network

Hi there, I’m one of the founders of Axelar, a decentralized and universal interoperability platform that is connecting all major chains, including Polkadot, Bitcoin, Cosmos, Ethereum, and, in the future, Solana.

The team at Axelar has known Shumo for quite a while. We worked closely together back at Algorand. Shumo was always one of the few people that would stay in the office until late night, working on crypto and other stuff. I’m very interested to hear what motivated you to start the Manta Network.

Shumo Chu, Co-Founder, Manta Network

Great, thank you Georgios. It has been a super fun journey. In my first job, I was a research scientist at Algorand, where I met Georgios. Georgios was exploring some very hardcore protocol design. At that time, I was building the Alrogrand smart contract capabilities. I have a formal computer science education. My background is database systems and program languages. Until my time at Algorand I hadn’t yet started to work on cryptographics. I have been amazed by cryptography since then. And I suppose, in a sense, went down the rabbit hole.

When building Manta, I was motivated by the potential to solve problems in crypto. Many think blockchain must be very private, however it is the contrary. It’s really like sending your money over Twitter. You broadcast your transaction to every person on earth. What makes this worse is that the transaction history will be there forever, which is a huge issue for retaining privacy

So Manta really came down to solving problems. I think the biggest problem we saw is the industry lacking privacy. For example, the existing privacy blockchain product lacks utility.

For example, take ZCash. I think it’s great. We learn a lot from the protocol design, but it’s a single asset protocol. I think in the open blockchain world, everyone has their own favorite tokens. We don’t want to take any opinion on that. We just want to privatize any kind of tokens we want.

The second biggest issue is that private tokens lack programmability. This is central to what Manta is working on: bringing a privacy preserving smart contract onto the platform.

In short, we are privacy utility providers. We can provide utility to all substrate Polkadot tokens. Eventually, we hope to use privacy bridges like Axelar to provide these privacy utilities to tokens in other ecosystems.

Georgios Vlachos, Co-Founder, Axelar Network

Amazing. With Axelar, our vision from the very beginning was that different blockchains will specialize in different use cases. We actually considered, at some point, working on privacy because of this need.

At the end of the day, we decided to do one thing and do it well, and that is building this cross chain infrastructure. We leave privacy to projects like Manta. One of the original motivations however, was that we need privacy.

We cannot build it everywhere. It’s just not compatible with certain blockchains out there. So the substrate specific blockchain specializing in privacy is what we need for this. I think the possibilities are endless here.

So, what are some big synergies you’ve seen in the early days? Is it bringing assets across, composing applications on top of Manta? Where do you see most of the demand for assets and what are some applications that people should be excited about in the early days?

Shumo Chu, Co-Founder, Manta Network

There are definitely endless possibilities associated with privacy in terms of collaborating with the Axelar ecosystem. Again, we are a permissionless blockchain. So basically anyone can privatize any kind of asset. I think a lot of folks are excited about the Terra and Cosmos ecosystem. For example, assets like UST are pretty exciting to privatize. What is exciting is that when people talk about bridges, people talk about composability and programmability a lot. But indeed there are other reasons I think bridges are actually a far more important architecture than people thought.

I think the first kind of synergy examples are very simple. Let’s say people have some tokens in Terra, or the Cosmos ecosystem or Avalanche, or any ecosystem that Axelar supports. They transfer the token to Manta and we privatize that. That’s the first layer and Axelar is the second layer.

I think in the future the bridge should support something, some like a primitive, kinda like remote procedure calls (RPCs) in a distributed system. You can have a remote execution, you actually bring more APIs just as a fungible token transfer. I think that will be more interesting in the sense that it can bring a kind of interchangeable connectability through compostable function calls, like smart contract function calls. In terms of the concrete applications, I think we do have a few very nice ones.

I think a lot of people know the recent ConstitutionDAO stuff. Because of lack of privacy the DAO actually loses in auctions. So I think let’s say if Manta can connect through Axelar, collecting a broader aspect of information, it may solve the problem. The auction could have happened privately in Manta’s zero knowledge proof circuit. So if you’re a DAO, you don’t have to become this open governance model, only to lose this auction to a hedge fund guy that bid $1 more than you. You lose the entire auction because of lack of privacy.

Another concrete application is, say a DAO that wants to send its members a salary payment without exposing this information completely in the open, then you can use the private Manta payments functionality to get an open source governance structure. Currently we don’t see a lot of privacy adoption due to lack of utility. Manta’s goal is to create this utility, so we can see more and more privacy applications. Last but not least, Manta is going to build an open source, EVM compatible programming layer. With this I think the possibilities are endless.

Polkadot-EVM cross-chain integration

Georgios Vlachos, Co-Founder, Axelar Network

Let’s focus on the first use case you mentioned, as we’re focused on user experience at Axelar. We’re also very thoughtful about security, properly auditing new stacks. With this in mind, do you have any concrete timelines regarding Polkadot-EVM cross-chain integration?

Shumo Chu, Co-Founder, Manta Network

We’ve got a pretty good idea how this programmable asset layer design. I think we solved all the hard design issues. One of the design issues here is because of the privacy, Manta fungible token layer is using a UTXO model. If you want to do a programmable layer through EVMs, say building Polkadot-EVM cross-chain dApps with smart contracts, you need to do some consolidation of the UTXO and account model. I think we have a very elegant technical solution for that.

So we are actually going to launch the private testnet for the programmable private asset support soon, Q3 or Q4. But actually before that we have more exciting things, like exciting updates to the existing private payment product, for example. The first one is a reusable address, the second is improved zero knowledge proof performance. In the next version of Manta Pay is actually 1/10 of the constraint compared with Zcash and we have multi-asset support where Zcash doesn’t. This improves user experience in terms of proving time, by a lot.

I think definitely we are getting a pretty busy year in 2022 and have a series of product updates coming.

Georgios Vlachos, Co-Founder Axelar Network

On composability, it can be relatively easy to trace transactions. How does Manta offer privacy surrounding composability?

Shumo Chu, Co-Founder, Manta Network

When you talk about privacy, you have to define what privacy is. So here, there is privacy of transactions, or execution logic, and there is privacy of the end users. At Manta, we care about the privacy of end users. That’s why we can re-consolidate the private asset with programmability. Our business logic layer still could be public in 90% of use cases. We basically have this unspent transaction output (UTXO) to account model consolidation layer, so that we can simulate the account model using the UTXO. Your private identity still remains.

Georgios Vlachos, Co-Founder, Axelar Network

At Axelar, we’ve been talking to various parachains because our goal is to connect everything directly, but we have to be mindful of the existing interoperability protocols within the Polkadot ecosystem, and the health of the ecosystem in general.

For example, if we bridge directly to Moonbeam and then bridge directly to Manta, we’ll have four different versions of UST in the Polkadot ecosystem. Furthermore, you wouldn’t be able to bridge all these chains using XCMP as you would end up with different versions, leading to more fragmentation.

One potential solution to that is that everyone uses Axelar, or whatever protocol connects those parachains. It is not ideal that XCMP is not widely used as it is the most seamless way to transfer assets within Polkadot.

The other option is to choose a particular layer, for example, picking a parachain for its asset. Then we could say, for example, Moonbeam is going to be the landing parahcain for UST. We could do it on Manta, allowing people to use XCMP to move across parachains. All this we can abstract away from the user.

Axelar would allow you to move UST to MoonBeam, and then we have a proxy contract that would basically just send it directly to the user on Manta, achieving optimal user experience while achieving compatibility with XCMP. It would be up to the communities then to split the assets.

Curious if you have any thoughts around that?

Shumo Chu, Co-Founder, Manta Network

I have been looking into XCMP quite a bit these days and think there are even more elegant solutions here. Firstly, there is a difference between XCM and XCMP. XCM is more like a programming language while XCMP is a protocol. XCM is actually quite flexible.

For example, we can consolidate Manta. Once you enter the substrate or parachain ecosystem we can consolidate one of the reserve locations, and then the cross chain transfer will become very easy.

We could also have a unified token identifier with cross consensus rather than cross chain. I actually think that if all our team works together we can create a much better solution for the end user, as this fragmentation is unnecessary.

Georgios Vlachos, Co-Founder, Axelar Network

Thank you. I don’t think it’s a technical problem really, but more about getting everyone together and agreeing to some standards.

On Polkadot, everyone wants to work together and do the best for the ecosystem as it is a super collaborative ecosystem.

On that note, do you have any questions on Axelar?

Shumo Chu, Co-Founder, Manta Network

I read the Axelar whitepaper so I have a strong understanding of everything.

However, for those who do not know Axelar as much as I do, what is it that differentiates Axelar from other bridges?

The importance of decentralization in cross-chain

Georgios Vlachos, Co-Founder, Axelar Network

Well, Axelar itself is not a bridge.

We recently launched Satellite, a demo app that is a bridge built on top of Axelar, which is just a cross chain messaging layer allowing users to build all kinds of applications on top of it. That’s really unique because most of the bridges that you see in the market today are pairwise.

For example, if you move UST to Avalanche, you cannot move it directly to Polkadot, you have to go back to Terra.

So Satellite is a unidirectional solution that you can use to route assets. If you try it out, you can bring UST to the likes of Fantom and other chains. Therefore, it’s more of an end to end connector rather than a bridge.

At its core layer, Axelar is all about passing information and messages across different blockchains. Polkadot-EVM cross-chain is just one of many connections. Axelar is the first permissionless, decentralized solution for something like that.

This is similar to other chains like the Cosmos Hub, Osmosis and Terra. This is the security model that any proof-of-stake adopts. Our thesis from the start is that it’s all about the validator. Strong validators run on all major chains so we wanted to replicate that model.

Basically whenever you move assets or information through Axelar you are depending on a decentralized set of validators, similar to any other proof-of-stake chain.

We are also building a robust application layer protocol. This will allow users to enjoy a native experience. For example, imagine you want to interact with Anchor on Terra, but your wallet is on Manta. If you hold a stake derivative on Manta, you may want to get a loan against it through Anchor on Terra. You really should be able to do this through Manta’s native wallet. On the backend, this would involve Axelar sending information over to Terra, getting a loan in UST on Anchor and routing the UST back to the user.

So basically, you could facilitate cross-chain applications without actually having to rebuild as a developer on 15 different chains.

I think over the next year we’re going to see a change in how people think about cross-chain technology, where we move away from how people build now, deploying multiple times on 15 different chains.

Shumo Chu, Co-Founder, Manta Network

Separately, if you think about the internet, other bridges are peer to peer. You have one bridge that connects to others. Taking this analogy, we see that Axelar is more like a router, as you can send a message through the network, allowing you to route through different chains with a set of decentralized validators.

Georgios Vlachos, Co-Founder, Axelar Network

Yes, I think it’s a great analogy. For people who are familiar with Cosmos and Polkadot, that was an original motivation. With PolkaDot, you have the relay chain that can route information across different chains, while remaining a universal protocol across the ecosystem. And similarly in the Cosmos ecosystem, you can connect directly, but you can also decide to go through the hub to do things more efficiently.

We essentially generalize this model to account for changes that are not IBC or XCM compatible. For people who are in the Polkadot ecosystem, one way to think about it is being very similar to the XCMP protocol but universal for all change, not just Polkadot native change.

Victor Ji, Co-Founder, Manta Network

Recently, we saw some really big news emerge about Wormhole and a withdrawal to FTX. What do you think of that? Can Axelar bring bridges and true decentralization to the space that could help avoid this?

Georgios Vlachos, Co-Founder, Axelar Network

It’s unfortunate that these things will continue to happen over the next year. No matter what you build and how securely, things can go wrong.

With the Wormhole case, it was more related to smart contracts rather than being any issue with the trust assumptions. Despite this, we saw some people on Twitter blaming cross-chain designs and the incentive structure.

This has happened countless times to smart contracts and in other places. I think the best thing we can do here is to have an insurance protocol in place so that people can get their funds back when these things happen. In addition, battle-tested protocols are the best path forward. It’s all about security.

From Axelar’s side, we’re not going to rush with launching new things. We’re first going to just make sure that everything is secure.

Questions from the audience

AMA Audience Member

If I have Atom tokens in my Kepler wallet and I wanted to get them across to the Ethereum ecosystem, but I’m not able to use the Gravity Bridge, how could Axelar help me in achieving that?

Georgios Vlachos, Co-Founder Axelar Network

On the backend the flow would basically be transfer with IBC over to Axelar, then you would use the protocol that we have to connect Axelar with EVM chains, which is a different protocol from IBC, but we take these two steps; transfer with IBC over to Axelar and then move it over to Ethereum. It’s the same with Polkadot-EVM cross-chain capability.

On the front end, we have the Satellite app that right now abstracts this away from the user.

You can actually just go ahead and use it with Ethereum, Avalanche and MoonBeam so it is one click for the user.

We give you a deposit address on Axelar allowing you to go on route with IBC from whatever your chain is.

AMA Audience Member

I want to ask about testnets. Are they actually available for developers to try and create dapps? I would like to see how we can interact with the Axelar blockchain.

Georgios Vlachos, Co-Founder Axelar Network

So right now we have the testnet open for asset transfers and some other features surrounding generic message passing. APIs for cross chain composability are going to come over the next two months. So follow the official announcements on that.

AMA Audience Member

I have another question actually. We have been trying to build a decentralized exchange using blockchain due to the continued progress with connecting separate blockchains and bridges. Is that how Axealr would work?

Georgios Vlachos, Co-Founder Axelar Network

So Axelar, while technically it is a layer one, and you could build on top of it, the way we’re thinking about it is that it’s just the pass through layer. So as a developer, you should be able to go and build on Avalanche, Moonbeam, Manta and Axelar will bring you the cross-chain composability.

So if you want to bring some to build something, like third chain, you can go on MoonBeam and create, essentially, a UniSwap fork, and Axelar will provide the APIs so that you can access assets from various different blockchains.

It cannot be built directly on Axelar as a layer one, you just pick the best chain.

So building on Terra, Avalanche, MoonBeam and Axelar will provide the cross chain APIs which will be very easy to integrate.