Axelar vs LayerZero: Fee Models

Fixed, destination-chain gas fee: Axelar charges a flat fee in the destination chain's native token (e.g., ETH, MATIC) for gas, plus a small protocol fee in AXL. This creates cost certainty for developers and users, as the fee is known upfront and not subject to source-chain congestion. This matters for enterprise applications and high-frequency arbitrage bots that require stable, predictable operating costs for cross-chain logic.

Security-subsidized costs: Axelar's decentralized validator set (staking AXL) provides liveness and security for message relaying. This model can subsidize user fees because relayer compensation comes partly from staking rewards, not solely from transaction fees. This matters for protocols seeking long-term economic alignment where security and cost efficiency are intertwined, as seen in integrations with dYdX, Osmosis, and Neutron.

Pay in source-chain gas: Users pay fees entirely in the source chain's native gas token (e.g., ETH on Ethereum, AVAX on Avalanche). Fees are dynamically composed of Oracle + Relayer gas estimates, which optimize for current network conditions. This matters for end-users and wallets who prefer a seamless experience without needing to hold destination-chain tokens, as utilized by Stargate, SushiSwap, and Rarible.

Permissionless relayer competition: Any entity can run a LayerZero relayer, creating a competitive fee market that can drive down costs. Applications can choose or run their own relayer for maximum control and potential fee optimization. This matters for large-scale protocols like PancakeSwap and Uniswap that operate their own relayers to minimize costs and ensure performance for their specific cross-chain traffic patterns.

Gas-agnostic pricing: Fees are paid in the native gas token of the source chain (e.g., ETH on Ethereum, SOL on Solana) and are set by validators based on a transparent, on-chain fee schedule. This provides cost predictability for dApp developers, as fees are not subject to the volatile gas spikes of the destination chain. This matters for enterprise-grade applications requiring stable operational budgets and for protocols that batch user transactions.

Validator tax for security: The fee model incorporates costs for Axelar's decentralized validator set (currently 75+ validators) to execute gas-agnostic attestations and security proofs. This creates a higher baseline cost compared to ultra-light clients, especially for simple token transfers. This matters for high-frequency, low-value transactions where minimizing absolute cost is the primary concern, potentially making it less competitive for certain consumer dApps.

User or dApp pays destination gas: The primary fee is the exact gas cost to execute the message on the destination chain, paid in that chain's native token. This can lead to significantly lower costs for transfers to chains with cheap gas (e.g., Arbitrum, Polygon). This matters for user-centric applications where minimizing end-user cost is critical and for protocols leveraging low-fee L2 ecosystems.

Gas volatility risk: Users/dApps bear the full brunt of destination chain gas price volatility (e.g., Ethereum mainnet spikes). This creates unpredictable costs and complex budgeting. Requires oracle fees for proof delivery and optional relayer fees, adding complexity. This matters for enterprise operations needing fixed costs and for dApps that cannot pass sudden gas surges to users.