Stargate is a community-driven organization building the first fully composable native asset bridge and the first LayerZero-based dApp.
After the breakthrough of Ethereum, various alternative chains and second layer rollups emerged to meet the increased need of chain roaming yield farmers. Each ecosystem has its future staked on a unique set of blockchain architecture tradeoffs between decentralization, security, and scalability. As the field of competing DeFi ecosystems grew, a steady stream of users discovered ways to cross-chain in search of big returns.
background
Stargate’s goal is to make cross-chain liquidity transfer a simple, one-time transaction. Stargate enables one-click exchanges from any asset on any chain to any asset on any other chain. Suppose a user wants to trade DAI on Ethereum for AAVE on Polygon on a non-Stargate based DEX.
SushiXSwap, based on Stargate, allows users to swap DAI on Ethereum for AAVE on Polygon in a single transaction from the source chain, without ever leaving Sushi’s interface. Users can pay both source and destination chain gas fees in one transaction and provide additional assets for future destination chain gas fees.
What is Stargate?
Stargate is a community-driven organization building the first fully composable native asset bridge and the first LayerZero-based dApp. It is a fully customizable liquidity transfer mechanism that is vital to Omnichain DeFi.
Users and dApps can use Stargate to move native assets across chains while accessing the protocols’ unified liquidity pools with instant assured finality.
Stargate holders need to connect their wallet to the Ethereum mainnet, go to a DEX, swap DAI to USDC as Polygon doesn’t support DAI, find a first generation bridge to swap USDC to a wrapped version (USDC-Wrap), themselves connect to polygon metamask, bridge and pay a fee, find an AMM on the BNB chain with a pairwise pool of USDC wrap to swap for AAVE and pay a fee. Then, to return to the mainnet, they repeat the process.
Stargate, based on LayerZero’s generic messaging protocol, was designed to make cross-chain composability simple and secure. Cross-chain composable bridges can be instantly integrated into any dApp on any chain. The bridging process is abstracted from consumers to remove the risk, the work, and the worry of doing it yourself.
Using Stargate
DeFi users can exchange native assets on Stargate in a single transaction. For example, users can exchange USDC on Ethereum for USDT on BNB.
Stargate can consist of a holder’s preferred yield aggregator to deploy assets across chains and add additional APY prospects. Stargate’s uniform, co-owned liquidity pools support these cross-chain swaps.
The uniqueness of Stargate
The Stargate Bridge is the first to solve the bridging trilemma. Existing bridges must compromise on the following basic bridge characteristics:
Instant Guaranteed Finality: Users and applications can be assured that a transaction they have successfully committed on the source chain will arrive on the target chain.
native assets: Users and applications exchange native assets instead of packaged assets, which require additional swaps and costs to acquire the required object.
Unified Liquidity: Sharing access to a single pool of liquidity across many chains generates more liquidity for users and applications that depend on the bridge’s reliability.
transfer
Users leverage Stargate’s unified liquidity pools to transfer native assets 1:1 between chains. It is ensured that a transmission transmitted in the source chain arrives at the destination.
swimming pool
Adding liquidity to Stargate’s omnichain protocol and receiving stablecoin incentives with every Stargate transfer. Liquidity providers can also farm their LP tokens for STG token incentives.
farms
In exchange for STG rewards, Stargate Liquidity Providers can farm their LP tokens. Earning an STG is a requirement to become part of the Stargate community.
mission
STG token holders can lock their STG tokens in exchange for veSTG, Stargate’s governance token. The more veSTG users get, the longer they wager their STG tokens.
Stargate Whitelist Affiliate Program
Partners who use Stargate in production and have a high transaction volume are eligible to apply to Stargate’s Whitelist Partner Program. Affiliates get 0.3 bps for transactions sent over the Stargate protocol. These are settled monthly in stablecoin. The 0.3 basis points are deducted from the Treasury’s base fee.
Stargate Rebalancing Fees
Since Instant Guaranteed Finality (IGF) using native assets is one of Stargate’s key features, Stargate’s performance requires target chains to hold sufficient reserve funds to handle incoming swap transactions.
The protocol begins with balances at the optimal target balance, but subsequent swap transactions deplete some balances in target chains while increasing others in source chains. Stargate incorporates rebalancing fees based on the current balance and transaction size of each possible transaction to incentivize users to execute swaps that “fill up” native asset balances and discourage users from executing transactions that could fully deplete the reserve balance.
Omnichain Composability
Stargate enables one-click exchanges from any asset on any chain to any asset on any other chain. For example, a user wants to trade DAI on Ethereum for AAVE on Polygon on a non-Stargate based DEX.
They need to connect their wallet to the Ethereum mainnet, go to a DEX, swap DAI to USDC because there is no DAI on Polygon, find a first generation bridge to swap USDC to a wrapped version (USDC-wrap), yourself connect to polygon metamask, bridge and pay a fee, find an AMM on the BNB chain with a pairwise pool of USDC wrap to swap for AAVE and pay a fee, and pay a fee. Then, to return to the mainnet, they repeat the process.
On-Demand Cross-Chain Liquidity
Sushi is the first DEX to leverage Stargate to access a single pool of liquidity from each chain at all times with the launch of SushiXSwap. Abstracting complexity simplifies the lives of developers and users.
Stargate provides developers with huge pools of capital-efficient liquidity without the cost of managing LP issuance, accelerating core development cycles and giving consumers access to native assets.
Stargate eliminates the need for dApps to fund or maintain issuance to promote LPs across multiple chains by automating cross-chain inventory management and providing on-demand access to liquid inventory.
Unblock Omnichain DeFi for Web3
Stargate extends the capabilities of all dApps by offering a reusable bridge that enhances the user experience without requiring changes to existing code. Sushi uses Stargate for swaps, but omnichain composability improves many other popular features. Additionally, dApps compete to be the first in their category to offer their consumers the additional benefits that come from being built on top of Stargate with the sophisticated algorithm. The first omnichain AMMs, wallets, yield aggregators, and lending dApps, among other services, will offer liquidity distributed across many chains that can be accessed as a single pool.
Conclusion
Stargate is the first and only bridge to overcome the bridging trilemma by enabling the wrapping of all existing DeFi applications and offering seamless composability. It eliminates the need for dApps to fund or sustain issuance to promote LPs across numerous chains by automating cross-chain inventory management and providing on-demand access to liquid inventory.
With that, the liquidity generation event will come to an end, giving STG depth in terms of AMMs and protocol native liquidity for Stargate. STG will be the first Omnichain Fungible Token (OFT), a native token that can flow freely between all LayerZero chains. This is the first step towards a future omnichain.
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