Stargate Finance: Achieving Infinite Liquidity by Bridging Across Blockchains

Introduction to the Project
Stargate Finance (STG) is a decentralized finance (DeFi) platform that aims to serve as a bridge between blockchain and decentralized applications (DApps).


Stargate Finance is built on the LayerZero protocol, which allows different blockchains to interact with each other. Through Stargate, you can exchange USDT on Ethereum for USDC on Arbitrum in a single transaction, and support many other chains.
The STG token is the native token of Stargate Finance, used for various functions and reward mechanisms on the platform. Users can earn STG tokens by providing liquidity and participating in platform governance. Similarly, users can participate in platform governance by staking STG tokens, voting on important matters such as platform fees and target asset balance.
Core Mechanism
2.1 LayerZero Technology
LayerZero technology is the foundation of Stargate Finance, providing a secure and efficient solution for cross-chain communication and asset transfer. Here is a detailed explanation of LayerZero technology:
1. Concept
LayerZero is a cross-chain interoperability protocol designed to enable direct communication between different blockchains in a decentralized manner. It provides infrastructure for cross-chain asset transfers, addressing many issues in traditional cross-chain bridging solutions.


2. Working Principle
LayerZero technology achieves cross-chain communication and asset transfer through the following mechanisms:
Cross-chain message passing: LayerZero allows direct message passing between different blockchains without intermediaries. This is achieved through lightweight relayers and oracles.
Lightweight relayers and oracles: Relayers are responsible for transmitting transaction data, while oracles verify and confirm the validity of the data. The separation of relayers and oracles ensures high security and decentralization.
User Application (UA) protocol: This is a smart contract running on the source and target chains, responsible for handling the logic of cross-chain transactions. UA ensures accurate execution of transactions and handles the transfer of user assets.
3. Security and Decentralization
LayerZero technology ensures the security of cross-chain communication through multi-layer security mechanisms and a decentralized architecture:
Trust minimization: The design philosophy of LayerZero is trust minimization, reducing users’ reliance on intermediaries. Relayers and oracles are operated by independent entities, ensuring the independence of data transmission and verification.
Distributed validation: Oracles are responsible for validating the data transmitted by relayers, ensuring the authenticity and accuracy of transaction data. The distributed oracle network reduces the risk of single point failures.
Anti-fraud mechanism: LayerZero adopts anti-fraud mechanisms to ensure the security of cross-chain transactions. If malicious behavior is detected, it can be corrected in a timely manner to protect user assets.
4. Cross-chain Asset Transfer
LayerZero technology supports cross-chain transfer of native assets, providing an efficient and cost-effective solution:
Single transaction cross-chain transfer: Users can transfer assets between different blockchains in a single transaction without the need for complex token wrapping processes.
Instant transaction confirmation: Through LayerZero, cross-chain transactions are immediately confirmed on the source chain, and the assets on the target chain are immediately available, ensuring the immediacy and reliability of transactions.
5. Integration with Stargate Finance
LayerZero technology is deeply integrated with Stargate Finance, providing infrastructure for its cross-chain liquidity pools and asset transfers:
Unified liquidity pool: LayerZero technology supports Stargate Finance’s unified liquidity pool, enabling liquidity sharing between different blockchains.
Delta algorithm support: LayerZero technology provides cross-chain communication support for the Delta algorithm, ensuring efficient management and rebalancing of liquidity pools.
Advantages
LayerZero technology has several advantages over traditional cross-chain bridging solutions:
Efficient communication: LayerZero enables efficient cross-chain communication through lightweight relayers and oracles, reducing transaction latency and costs.
Decentralization: LayerZero’s decentralized architecture ensures the security and reliability of the system, avoiding single point failures and centralization risks.
Flexibility: LayerZero supports multiple blockchains and asset types, providing wide compatibility and applicability.
2.2 Delta Algorithm
The Delta algorithm of Stargate Finance is one of its core innovations for efficient and secure cross-chain asset transfers. Here is a detailed explanation of the Delta algorithm:


1. Foundation of the Delta Algorithm
The Delta algorithm is the core technology used by Stargate Finance to manage and optimize cross-chain liquidity pools. It achieves instant guaranteed finality for cross-chain asset transfers and ensures the stability of liquidity pools through programmatic control.
2. Instant Guaranteed Finality
The Delta algorithm ensures that the assets on the target chain are guaranteed to arrive after the transaction is confirmed on the source chain. This means that users will not experience transaction failures due to insufficient liquidity or token incompatibility. The specific mechanisms include:
Source chain transaction confirmation: When a user submits and confirms a transaction on the source chain, the Delta algorithm immediately locks the corresponding assets on the target chain.
Transfer of target chain assets: After the transaction is confirmed on the source chain, the assets on the target chain are immediately transferred to the user’s account, ensuring the finality of the transaction.
3. Unified Liquidity Pool and Soft Partitions
Stargate Finance achieves cross-chain asset transfers through a unified liquidity pool, and the Delta algorithm intelligently manages these liquidity pools:
Unified liquidity pool: A unified liquidity pool refers to the concentration of liquidity from different blockchains into a single pool on the Stargate Finance platform. This structure allows for free flow of cross-chain assets without the need for complex bridging processes, reducing slippage and significantly improving liquidity and transaction efficiency.
Soft partitions: The liquidity pool is dynamically partitioned into multiple parts (soft partitions), for example, a portion of the liquidity pool on the Ethereum network can be allocated to the BNB chain or Fantom chain. These partitions can borrow from each other in times of liquidity crises and repay after transaction processing.
4. Liquidity Management and Rebalancing Mechanism
To prevent liquidity pools from being depleted under high concurrent requests, the Delta algorithm introduces a rebalancing mechanism to maintain the stability and efficiency of liquidity pools:
Rebalancing fee: The rebalancing fee is part of the transaction fee and serves as an incentive for users to replenish or reduce assets in the liquidity pool to maintain balance. The rebalancing fee is calculated based on the transaction size and the current balance of the pool.
Reward mechanism: The collected rebalancing fees are accumulated and distributed to users who contribute to the rebalancing of the liquidity pool, with the reward amount depending on the user’s contribution to the balanced trading pair.
5. Dynamic Liquidity Management
The Delta algorithm ensures that the liquidity pool will not be depleted when large-scale simultaneous transfers occur between different blockchains through dynamic management:
Liquidity allocation: The funds in the liquidity pool are dynamically allocated to different blockchains, ensuring that each blockchain has sufficient liquidity to handle transaction requests.
Liquidity borrowing: In times of liquidity stress, liquidity pools from different blockchains can borrow from each other to ensure smooth transactions.
2.3 Decentralized Application (DApp)


Stargate Finance achieves efficient and secure cross-chain asset management and trading through its decentralized application (DApp). Here is a detailed explanation of the Stargate Finance DApp:
1. Core Functions of the DApp
Stargate Finance’s decentralized application (DApp) provides users with a range of powerful and flexible functions:
Cross-chain asset transfer: Users can seamlessly transfer native assets between different blockchains without the need for complex bridging processes.
Liquidity provision and mining: Users can provide liquidity to the liquidity pool and earn rewards through liquidity mining.
Cross-chain trading: Supports instant exchange of tokens on different blockchains, allowing users to conveniently engage in cross-chain transactions.
2. Cross-chain Asset Transfer
One of the main functions of the Stargate Finance DApp is cross-chain asset transfer, which is implemented as follows:
Cross-chain transfer in a single transaction: Users only need to perform one transaction to transfer assets between different blockchains. This greatly simplifies the operation process and improves the user experience.
Instant transaction confirmation: Through LayerZero technology, assets on the target chain are immediately available after the transaction is confirmed on the source chain, ensuring the immediacy and reliability of transactions.
Native assets: Users use native assets in the transfer process, avoiding additional fees and complex operations associated with wrapped tokens.
3. Liquidity Provision and Mining
The Stargate Finance DApp allows users to provide liquidity to the liquidity pool and earn stablecoin rewards through participation in liquidity mining:
Unified liquidity pool: Users can deposit assets into a unified liquidity pool and participate in liquidity provision activities across multiple blockchains.
Reward distribution: Liquidity providers (LPs) receive rewards based on their proportion of provided liquidity, which are distributed in the form of stablecoins and represent 0.045% of the fees collected from each transfer transaction.
Flexible liquidity management: LP tokens can be redeemed at any time, allowing users to flexibly manage their liquidity provision positions.
4. Cross-chain Trading
The Stargate Finance DApp supports instant exchange of tokens on different blockchains, providing convenient cross-chain trading functionality:
One-click exchange: Users can exchange tokens between different blockchains, such as swapping USDT on the Ethereum network for BUSD on the BNB network.
Reduced slippage: The deep liquidity of the unified liquidity pool reduces slippage during the transaction process, ensuring users obtain fair and accurate transaction prices.
5. User Interface and Experience
The Stargate Finance DApp provides a user-friendly interface that simplifies the process of cross-chain asset management and trading:
Intuitive interface design: The DApp’s interface design is clean and intuitive, allowing users to easily engage in cross-chain transactions and liquidity management.
Simplified operation process: Users do not need to understand complex technical details, only simple operations are required to complete cross-chain asset transfer and trading.
3. STG Token