Question:

Axelar’s General Message Passing primitive has been live for a long time; however, the launch of Squid Protocol has brought GMP into the spotlight. Now, users can swap any token on their source chain for any token on their desired destination chain, with on-click of a button.

How has this frictionless experience impacted Axelar’s token transfer volume via their native bridge Satellite? Analyze user growth for Squid vs. Satellite since Squid’s launch on Flipside supported chains (Ethereum, Avalanche, Binance, Polygon). Have Satellite’s DAUs remained loyal, or are they transitioning to Squid for their cross-chain transfers? Or are the users different?

Overview of analysis:

In this investigation, the application of Squid and Satellite bridges has been investigated. The main focus here is on the bridge and sender domination among these two bridges.

This analysis contains these parts named:

• Bridge share (Satellite vs Squid)
• User activity (Satellite vs Squid)
• Popular assets bridged on Satellite and Squid
• Summary and references

About Axelar and Satellite bridge

The Axelar network serves as the infrastructure for inter-chain exchanges. Axelar acts as both a bridge and a platform for cross-chain communication between smart contract protocols. Axelar bridging makes it possible to send tokens across different blockchains, while Axelar second feature allows decentralized applications to run on different networks.

Satellite is one of the first ecosystem applications powered by the Axelar Network. Satellite is a decentralized cross-chain asset transfer application, which enables users to transfer assets they hold on a source chain to an address on a different destination chain.

Resources: Axelar and Satellite

Methodology:

The data provided by Flipside has been used to handle this analysis.

The following parts were used to handle this investigation:

• Share of each bridge

  • Average metrics before and after the Squid launch

  • Volume in USD, average, and 7-day moving average bridge volume in USD.

  • Count of bridges

  • Share of bridge volume and transactions

  • Cumulative analysis

• User Activity

  • Average sender per day before and after Squid launch

  • Share of each bridge on active senders

  • Daily and cumulative users

  • Newcomers to bridge and share each platform on the attraction of new senders

• Most popular assets bridged via Squid and Satellite
  • Popular assets from the count of senders and volume of the bridge in USD
  • Popular bridged assets over time
• The time period of investigation is considered since the start of 2023.

About Squid bridge:

Squid is the cross-chain swap and liquidity routing protocol on Axelar Network.

Squid utilises existing DEXs to swap and send any native token between chains. This can be done via our SDK, Front End or Contracts directly.

Swaps are composable with Axelar's generalised message passing, so Squid can enable one-click transactions between any application and any user, using any asset.

Buy NFTs from any marketplace, use multi-chain DeFi, play a game on another chain, all without signing multiple transactions or downloading multiple wallets.

Resources: Axelar and Squid

Part 1: Bridge share (Satellite vs Squid)

Part 2: User activity (Satellite vs Squid)

Part 3: Popular assets bridged on Satellite and Squid

Key Findings:

• The count of bridges on Satellite has decreased after the Squid launch. However, this metric has increased for Squid bridge.
• The average volume of the bridge (in USD) increased on both platforms after the Squid launch as can be seen.
• The average volume of bridge per day on Squid has increased with a higher slope than Satellite.
• The share of the Satellite bridge has decreased after the launch of the Squid according to the normalized graph.
• The trend of application for Squid bridge has followed the increasing pattern despite Satellite which has an inconsistent trend after launch of Squid.

Key Findings:

This part concentrated on the user’s activity on Squid and Satellite bridge:

• The average user per day on Squid bridge has increased significantly after the launch of Squid in early February.
• As can be seen, there was a sudden drop in the share of Satellite users just after the launch of Squid based on the normalized chart.
• The count of newcomers on Squid bridge has grown tremendously after its announcement and launch.
• The normalized chart related to the share of each platform on the attraction of new users demonstrates that on February 6, about 40% of new users were attracted to Squid bridge despite Satellite.

Key Findings:

• The most popular asset bridged on both Squid and Satellite is USDC from the volume of bridge point of view.
• On the Satellite bridge, the AXL token has the highest count of bridges but for the Squid bridge, USDC dominated the count of bridges on that platform.
• The volume and count of bridges on the Squid platform increased after its launch. Also, the USDC and axlUSDC are the most popular tokens in that time period.

Part 4: Summary and references

Conclusion:

By the use of a combination of the above parts, the following statements could be concluded:

• The launch of the Squid Bridge on the Axelar Network has been an unprecedented success. The bridge, which connects two different networks, is a revolutionary technology that allows for faster and more secure communication between businesses and individuals.
• The bridge has seen a great deal of progress since its launch in early 2022. Not only have more users joined the network, but they have also experienced improved speed and reliability when connecting to other services via the bridge. This increased performance has been especially beneficial to those who are using applications such as streaming video or gaming platforms over the internet.
• In addition to these improvements, Axelar Network also provides additional features such as automated backups and encrypted data storage for users who want extra security for their data. In addition, they have also implemented advanced security protocols to ensure that all information transferred over their network is safe from malicious attacks or cybercrime attempts.
• Overall, the Squid Bridge on Axelar Network has been an incredible success since its launch in early 2022 and continues to provide users with reliable connections while providing them with enhanced security measures.

Useful links:

• Axelar network
• Squid router
• Satellite bridge

Author:

Credited by MZG

Discord handle: m.zamani#0361

Twitter handle: @GargariZamani