In advance of our mainnet launch in February, we held an AMA on Twitter with Pangolin Exchange. Pangolin is a community-driven, decentralized exchange (DEX) running on the Avalanche Network, which supports all Avalanche and Ethereum tokens. Pangolin recently integrated with Axelar, with the goal of leveraging our interoperability protocol to support deep liquidity pools for new trading pairs such as the native Cosmos cryptocurrency ATOM and TerraUSD (UST), a stablecoin built on the Terra blockchain.
During the AMA, Pangolin’s CEO Justin Trollip discussed how the DEX can now offer deep liquidity to users enabling them to easily transfer assets without relying on external bridges. This move to seamless interoperability not only significantly reinforces both the security and efficiency of the platform, but permits for new assets to become available on Pangolin much faster, without having to build heavy third-party solutions, leading to an improved UX and higher tolerance against downtime and attacks.
At the moment DEX’s need to offer users new and exciting tokens. As Justin put it: “The crypto industry is very much about people wanting to buy the new, sexy tokens and UST — as an example of my personal stablecoin of choice — and so it makes a lot of sense for us to have Axelar bringing that to the Avalanche ecosystem.” One of the highlights of bringing interoperability to Pangolin, for Justin, is the radical improvements in the user experience.
Accelerating Existing Processes
We are entering the multi-chain world in the blockchain industry. Many different blockchains are continually being developed, optimized for unique technical properties, target specific use-cases, or go after certain markets. With the proliferation of new networks, the growing need for bridges between them is becoming increasingly obvious to enable new use cases.
While multi-chain bridges exist, there are limitations to their interoperability. To highlight one example, we have the model used by Composable. “Composable requires liquidity on both sides of the bridge, meaning in order for the bridge to fully function there is a huge requirement that not only do we need liquidity in us as a DEX, but we also have to then seed or populate liquidity in a bridge which doesn’t make a lot of sense to us because it’s would fragment our liquidity,” Justin explained.
Speaking on the AMA, Georgios Vlachos, Co-founder of Axelar said “Developers will just integrate with the solution they want on the back-end. Application developers and asset developers are more likely to just pick one interoperability solution to integrate with and leverage full composability, so as to avoid fragmentation in the future.” Axelar works to make Layer-1 solutions less cumbersome by providing the necessary interoperability infrastructure and APIs to enable developers to build on the blockchain network of their choice while leveraging cross-chain contract calls, eliminating the multiple steps developers and users currently need to take.
Future Possibilities of Interoperability
We know that in order to entice new users and encourage mainstream adoption of blockchain, it’s critical that everyday tasks such as transferring assets between different blockchains become ‘one-step’ tasks. This offers huge potential for a range of new use cases that many can not yet fathom.
Seamless Interoperability has the potential to radically improve payment applications beyond decentralized exchanges. For instance, Justin spoke about how this could streamline the payment of Pangolin’s suppliers: “We pay a lot of our suppliers in Ethereum, however, they don’t accept USDC on Avalanche. So every pay cycle, we have to transfer money from our multisignature to swap into USD. We then have to bridge it across to Ethereum to then finally pay our suppliers, with Axelar this 10-step problem goes away.”
The future of exchange liquidity is dependent on giving users the ability to rely on a single storage and transaction application that they can use with ease across multiple blockchains. The possibilities that full interoperability brings to blockchain goes beyond simply swapping crypto assets but enables smart contracts to share information such as supply chain records, health records and certificates. Through its partnership with Axelar, Pangolin is demonstrating a first-mover advantage in a competitive DeFi ecosystem by being one of the first to enable its customers to transact and interact across multiple networks seamlessly.
Pangolin AMA Recap: The Limitless Possibility of Interoperability was originally published in Axelar on Medium, where people are continuing the conversation by highlighting and responding to this story.