What is Stargate Finance? $STG

Stargate is a community-driven organization building the first fully composable native asset bridge, and the first dApp built on LayerZero.

Following Ethereum‘s breakthrough, various alternative chains and second-layer rollups arose to suit the increased need for chain roaming yield farmers. Every ecosystem staked its future on a unique set of blockchain architecture trade-offs between decentralization, security, and scalability. As the field of rival DeFi ecosystems grew, a steady stream of users discovered ways to do cross chains in quest of great yield.

Background

Stargate’s objective is to make cross-chain liquidity transfer a simple, one-time transaction. Stargate allows for one-click swaps from any asset on any chain to any asset on any other chain. Assume a user wishes to exchange DAI on Ethereum for AAVE on Polygon on a DEX that is not based on Stargate.

SushiXSwap, based on Stargate, allows users to exchange 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 the source and destination chain gas fees in one transaction, as well as provide additional assets for future gas fees on the destination chain.

What is Stargate?

Stargate is a community-driven organization building the first fully composable native asset bridge, and the first dApp built on LayerZero. It is a fully customizable liquidity transmission mechanism that is crucial to Omnichain DeFi.

Users and dApps can use Stargate to move native assets across chains while also accessing the protocols’ unified liquidity pools with instant assured finality.

Stargate holders must connect their wallet to the Ethereum Mainnet, go to a DEX, swap DAI to USDC because Polygon does not support DAI, find a first-generation bridge to swap USDC to a wrapped version (USDC-wrap), connect to Polygon on Metamask, bridge and pay a fee, find an AMM on BNB Chain with a pairwise pool of USDC-wrap to swap for AAVE and pay a fee. Then, to return to Mainnet, they repeat the process.

Stargate, which is based on LayerZero’s generic messaging protocol, is designed to make cross-chain composability simple and secure. Bridges that are cross-chain composable can be immediately integrated with any dApp on any chain. The bridging process is abstracted away from consumers to eliminate the risk, work, and worry of doing it themselves.

Using Stargate

DeFi users can exchange native assets on Stargate in a single transaction. Users can, for example, exchange USDC on Ethereum for USDT on BNB.

Stargate can be composed of a holder’s preferred yield aggregator to deploy assets cross-chain, opening up additional APY prospects. The community-owned Stargate unified liquidity pools support these cross-chain swaps.

Stargate’s Uniqueness

The Stargate bridge is the first to solve the bridging trilemma. Existing bridges must make compromises on the following basic bridge features:

Instant Guaranteed Finality: Users and applications can be confident that a transaction they successfully commit on the source chain will arrive on the destination chain.

Native Assets: Users and applications swap in native assets rather than wrapped assets, which require extra swaps and costs to acquire the required object.

Unified Liquidity: Shared access to a single liquidity pool across many chains generates more liquidity for users and applications that rely on the bridge’s dependability.

Transfer

Users utilize Stargate’s unified liquidity pools to transfer 1:1 native assets between chains. A transfer submitted on the source chain is assured to arrive at the destination.

Pools

Adding liquidity to the Omnichain protocol of Stargate and receiving stablecoin incentives on every Stargate transfer. Liquidity providers can farm their LP tokens for STG token incentives as well.

Farms

In exchange for STG awards, Stargate liquidity providers can farm their LP tokens. Earning an STG is a requirement to become a part of the Stargate community.

Stake

STG token owners can lock their STG tokens in exchange for veSTG, Stargate’s governance token. The more veSTG users receive, the longer they stake their STG tokens.

Stargate Whitelist Partner Program

Partners who use Stargate in production and have a high transaction volume can apply to join Stargate’s whitelist partner program. Partners will receive.3 bps for transactions sent over the Stargate protocol. Monthly, these will be settled in stablecoin. The.3 bps will be deducted from the Treasury’s base charge.

Stargate Rebalancing Fees

Because Instant Guaranteed Finality (IGF) using native assets is one of Stargate’s primary characteristics, Stargate’s performance requires destination chains to keep sufficient reserve balances on hand to handle incoming swap transactions.

The protocol begins with balances at the optimal target balance, but subsequent swap transactions drain some balances on destination chains while boosting others on source chains. Stargate incorporates rebalancing fees that rely on any possible transaction’s current balance and transaction size to motivate users to execute swaps that “refill” native asset balances and dissuade users from engaging in transactions that could fully drain the reserve balance.

Omnichain Composability

Stargate allows for one-click swaps from any asset on any chain to any asset on any other chain. For example, a user may wish to exchange DAI on Ethereum for AAVE on Polygon on a DEX that is not based on Stargate.

They must 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), connect to Polygon on Metamask, bridge and pay a fee, find an AMM on 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 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 any chain, at any time, with the launch of SushiXSwap. Abstracting away complexity simplifies the lives of both developers and users.

Stargate provides developers with huge pools of capital-efficient liquidity without the expense of managing LP emissions, and it accelerates core development cycles while providing consumers with access to native assets.

Stargate eliminates the need for dApps to finance or maintain emissions to encourage LPs across numerous chains by automating cross-chain inventory management and offering on-demand access to liquid inventory.

Unlocking Omnichain DeFi for Web3

Stargate expands the capabilities of all dApps by offering a re-usable bridge that improves the user experience without requiring any changes to existing code. Sushi employs Stargate for swaps, but omnichain composability improves many other popular functions. Furthermore, dApps are competing to be the first in their category to provide their consumers with the additional benefits of building on Stargate using the sophisticated algorithm. The first omnichain AMMs, wallets, yield aggregators, and lending dApps will offer liquidity dispersed over many chains that can be accessed as a single pool, among other services.

Conclusion

Stargate is the first and only bridge to overcome the Bridging Trilemma, enabling the wrapping of all existing DeFi applications and providing seamless composability. It eliminates the need for dApps to finance or maintain emissions to encourage LPs across numerous chains by automating cross-chain inventory management and offering on-demand access to liquid inventory.

This will bring the liquidity generation event to a close, giving STG depth on AMMs and protocol-owned liquidity for Stargate. STG will be the first Omnichain Fungible Token (OFT), a native token that may flow freely between any LayerZero chains. This is the initial step toward a future omnichain.