LayerZero’s platform is pushing interoperability & has taken a permanent spot in our Top Dapps rankings
Stargate Finance has become one of the leading DeFi dapps on the market, allowing users to transfer crypto across multiple blockchains. Unified liquidity and a focus on the omnichain ecosystem, have made using Stargate Finance a pleasure for everybody, while those who hold STG tokens get a say in the development and future of one of the most promising platforms on the market.
Contents
- What is Stargate Finance?
- Why Stargate became popular
- How do Stargate Finance and LayerZero work?
- What can I do with Stargate?
- The STG token
- What is the Stargate DAO?
What is Stargate Finance?
The Stargate protocol is an application built on top of the LayerZero protocol to enable the transfer of funds between multiple blockchains in a fast, cheap, and secure way. It’s currently live on Ethereum, Avalanche, Polygon, BNB Chain, Fantom, Arbitrum, Optimism, Metis, Polygon zkEVM and zkSync Era. The idea is to make cross-chain transactions so seamless that it feels like only one chain – hence the term Omnichain.
Moreover, Stargate Finance offers a range of decentralized finance (DeFi) features like liquidity pools, farming, crypto staking, and more. Its main goal is to make DeFi more accessible to a broader audience by focusing on facilitating interoperability.
Why Stargate Finance became popular
Stargate Finance’s success can’t be seen separately from the rise of Layer-2 blockchains, the potential for crypto airdrops and the need to move liquidity to new blockchain ecosystems. Stargate Finance has become the clear destination for users who want to move their liquidity from Ethereum to some of the other Layer-2 blockchain ecosystems, such as Optimism and Arbitrum.
The rise of zero-knowledge cryptography and blockchain ecosystems such as Polygon zkEVM and zkSync Era positioned Stargate even better. Airdrop hunters use Stargate as their bridge of choice to move liquidity from one chain to the other. Moreover, Stargate utilizes the LayerZero protocol to enable these cross-chain transfers. As people await the ZRO airdrop, moving liquidity across the different chains could benefit airdrop hunters.
Within that light it’s not odd to see Stargate Finance among the most popular dapps on the market.
How do Stargate Finance and LayerZero work?
Stargate Finance utilizes the LayerZero protocol to facilitate bridging of cryptocurrencies across different blockchains, but also allow them to swap, claim and stake. All this is possible through one interface, and using only one transaction.
The user only needs to be connected to the source chain and only needs to have assets on the source. More simply put, users will be able to do several actions on multiple chains in one single transaction. It’s what Stargate likes to call Unified Liquidity. Moreover, users get to trade in-between chains using their native assets instead of wrapped ones.
This means token bridges will essentially become invisible to the user, and multichain activity becomes as easy as interacting with one chain.
What can I do with Stargate Finance?
Today cross-chain messaging is synonymous with bridging, but there is much more you can do with LayerZero than simply bridging assets. Stargate Finance offers a variety of DeFi services, including crypto lending and borrowing, the unified liquidity bridge and token swaps. Let’s discuss these options.
Unified Liquidity Bridge
Bridges today compete to attract liquidity providers (LPs), which fragments liquidity between bridges and their pools. Instead of having one pool providing liquidity for an asset to all connected chains, LPs must choose a single pool that connects to one chain.
LayerZero enables unified liquidity across all chains with guaranteed finality on the source chain. When a user transfers an asset from Chain A to Chain B, the user is guaranteed the asset on Chain B, and the LP providers receive fees from all incoming transactions to Chain B regardless of the source chain.
Lending and Borrowing
Before, if a user has money on chain A but wants to farm on Chain B, the user would have to collateralize on Chain A, borrow, bridge, swap, farm on the destination chain, exchange back, bridge back, repay the loan, and un-collateralize. With most steps incurring fees along the way which can accumulate.
With Stargate, however, you can collateralize on Chain A, borrow on the destination chain, farm, repay, and the collateral is unlocked, skipping the four bridging and swapping fees.
LayerZero connects blockchains seamlessly, to the point where users are unaware they are even using it. Moreover, it enables dapps to expand beyond the borders of EVM or Non-EVM development, in turn creating the world’s first omnichain applications.
Token Swaps
Last but not least, existing token swap platforms can wrap tokens to perform cross-chain swaps from one asset to another without the need to modify any existing code. Users can swap from ETH on Ethereum to MATIC on Polygon in one single transaction from the source chain.
Stargate Finance and the STG crypto token
The STG token is the native crypto token of the Stargate Finance ecosystem. It is used for various purposes, including:
- Governance – STG token holders can participate in the Stargate DAO and vote on proposals related to the development and management of the platform.
- Staking – Users can stake their STG tokens to earn rewards and help secure the network.
- Fees – Users use STG tokens to pay transaction fees on the Stargate Finance platform.
- Rewards – They also receive STG tokens as rewards for providing crypto liquidity to the Stargate Finance pools.
What is Stargate DAO
The Stargate DAO is a decentralized autonomous organization that governs the Stargate Finance platform. It is run by STG token holders, who can propose and vote on changes to the platform. This includes for example, adding new features, modifying the fee structure, or changing the governance rules.
Stargate is designed to be community-driven and transparent, allowing anyone to participate and contribute to the development and growth of the platform is essential. This also ensures that the platform remains decentralized and responsive to the needs of its users.
Keep up with what’s hot in DeFi
The multichain paradigm is something DappRadar has advocated and believed in for some time. Now, the idea that users can perform complex cross-chain transactions without the headaches attached to using multiple blockchains can bring the industry another step closer to mass adoption. It will be fascinating to observe the success of LayerZero and Stargate.
DappRadar helps you understand and follow up with the latest Web3 market trends and innovations. Check out our Top DeFi Dapps Ranking to discover new projects that may change the future of finance.
Useful links
- Decentralized Finance (DeFi): DappRadar’s Ultimate Guide
- Learn more about LayerZero and Stargate in their official docs
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