Stargate is the liquidity protocol which has become a base of Omnichain DeFi
STG users and dApps can transfer native assets between networks while accessing the protocol’s unified liquidity pools with instant guaranteed realization. Stargate is a combination of DEX and cross bridges. What does it mean? It allows you to exchange your native Ethereum (ETH) assets for native Binance Coins (BNB) without having to prepare any other wallets, exchanges, gas, wrapped tokens, or interact with other decentralized exchanges of the BNB chain, such as PancakeSwap.
Today, Stargate supports Ethereum, Polygon, Avalanche, Fantom, BNB Chain, Arbitrum, and Optimism chains. It will also be deployed to Solana, Cosmos, and Terra networks after initial launch.
Stargate’s LayerZero interoperability is based on the following three concepts:
- Endpoints. A series of network-deployed smart contracts on supported chains (such as Ethereum, BNB Chain, Avalanche, Fantom, and Arbitrum) allow applications to send messages from one chain to another. For instance, it allows to deliver messages to chain B through firstly sending them to the endpoint of chain A). Each chain in the LayerZero network has on LayerZero endpoint.
- Oracles. Oracle is a third party service that provides a mechanism to exclude the usage of other components. (LayerZero chooses Chainlink)
- Relay. It is a standalone service that is similar in function to Oracle, but instead of extracting block headers, it extracts the confirmation for the specified transaction.
The use case for LayerZero can be wide. Cross-chain DEXs, multi-chain aggregators, and multi-chain loans can benefit from this instrument to improve cross-chain communications and increase capital efficiency.
Specifically, it allows you to use one chain’s native token to swap, stake, borrow, and farm assets directly on other chains with a few clicks without leaving the Stargate UI.
Let’s see an example:
For example, let's say you're currently providing USD liquidity on some lending protocols on Ethereum, but now you've found a cool new farm opportunity on Solana. Traditionally you need you to unlock your USDC, connect it to Solana using either a wormhole bridge or a centralized exchange. You need to prepare a wallet on Solana and also put some SOL into it as gas. But Stargate allows you to cancel your bet, exchange your USDC for Solana and put it on the new protocol in one or two transactions. You do not need to pre-cook SOL as a gas. You start with just ETH in your Ethereum wallet.
What is special about Stargate?
Current cross-chain bridges have a few shortcomings that Stargate is trying to address:
- Bridges are based on wrapped tokens, not native ones. As everyone knows, the security of wrapped tokens leaves a lot to be desired.
- Support for a small number of chains, but Anyswap has almost solved this problem
- Does not guarantee the completion of a transaction with large volumes.
And all this leads to security problems, transaction speed and high commissions.
Stargate, in turn, solves the above problems, where native coins can be transferred from one chain to another, uniform liquidity and avoid large volume complexity.
Product features and STG tokenomics:
Stargate products have four main features:
- Cross-network transfer of native assets. Each transfer of a token other than STG will cost 0.06% transfer fee. 0.045% will be distributed to LP and 0.015% will be distributed to the treasury. There are no transfer fees or rebalance fees for STG cross-network transfers.
- Liquidity pools of stablecoins. Stargate is currently opening 11 stablecoin liquidity pools such as USDC USDT on various chains available to LP to earn stablecoin rewards. Removing your liquidity will cost 0.06% fee, 3/4 of the fee goes to the pool you leave, 1/4 goes to the treasury.
- LP token farm. Once you have provided your liquidity in some of the available pools, you will receive an LP token (eg SUSDC on Ethereum) representing your stake in that pool.
- Governance. STG can be used to exchange veSTG for management. veSTG is a Stargate governance token that can be obtained by blocking STG for a period of 3 to 156 weeks. The longer your STG is blocked, the greater your voice power.
The STG token has a maximum supply of 1,000,000,000 (1 billion). The distribution looks like this:
17.50% - Core Stargate members (1 year lock up, 2 years linear unlock after that).
17.50% - investors (lock up for 1 year, linear unlock for 2 years).
65.00% - Stargate community distribution. Here is a breakdown of the community distribution:
15.00% - Launch of the Stargate protocol.
10.00% to buyers of the STG launch auction. (Purchased Alameda now, lock up for 1 year, linear unlock for 6 months)
5.00% to the STG-USDC pool at Curve.fi.
15.95% - Binding curve. (Available at time of purchase)
2.11% - Initial Emissions Program.
Up to 1.55% will be added to the DEX on BNB, Avalanche, Polygon, Arbitrum, Optimism and Fantom.
The remaining 30.39% is for future community initiatives.
Round 1 of the Community Auction has ended and all 100M STG tokens have been sold at $0.25 per STG. All $25 million will be transferred to the Curve Pool, paired with 50 million STG ($0.5 per STG). Sold STGs are locked for 1 year and then transferred linearly over the next 6 months.
Although the maximum supply seems large, the early circulating supply is difficult to estimate. According to the Kamikaz thread, STG's early circulation is around 70 million (7%), with 7 million LP awards each month. In the community, someone reported that among the 15.95% distribution of curved bonds, 5.58% sold. If we add 5% Curve supply, the initial circulating supply should be 105m (10.5%).
You can see Stargate competitors list on the chart above.
Important news regarding the project:
In September 2021, LayerZero completed a $6 million fundraiser led by Multicoin and Binance Labs, which involved Sino Global Capital, Defiance, Delphi Digital.
On March 16, 2022, 0xMaki became a full-time consultant.
On March 23, Alameda bought all the tokens in the first community token sale. (10% of total)
On March 22, 0xMaki proposed integrating Stargate's cross-chain liquidity pools into the Sushiswap community.
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