1. Project Introduction

Stargate Finance (STG) is a decentralized finance (DeFi) platform designed 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 swap USDT on Ethereum for USDC on Arbitrum in a single transaction, and it supports 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 stake STG tokens to take part in platform governance, voting on important matters such as platform fees and target asset balances.

2. 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. The following is a detailed introduction to 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 transfer and solves many problems in traditional cross-chain bridging solutions.

1. Working principleLayerZero technology realizes cross-chain communication and asset transfer through the following mechanisms:

• Cross-chain messaging: LayerZero allows direct messaging between different blockchains without intermediaries. This is achieved through lightweight relays and oracles.
• Lightweight relays and oracles: The relay is responsible for transmitting transaction data, while the oracle verifies and confirms the validity of these data. The separate design of relays and oracles ensures high security and decentralization.
• End User Agreement (User Application, UA): This is a smart contract running on the source chain and target chain, responsible for processing the logic of cross-chain transactions. UA ensures the accurate execution of transactions and handles the transfer of user assets.

1. Security and decentralization

LayerZero technology ensures the security of cross-chain communication through multi-level security mechanisms and decentralized architecture:

• trust minimization: The design concept of LayerZero is to minimize trust, that is, to reduce users’ reliance on intermediaries. Relayers and oracles are run by independent entities, ensuring independence of data transmission and verification.
• Distributed verification: The oracle is responsible for verifying the data transmitted by the relay to ensure the authenticity and accuracy of the transaction data. A distributed oracle network reduces the risk of single points of failure.
• Anti-fraud mechanism: LayerZero adopts an anti-fraud mechanism to ensure the security of cross-chain transactions. If malicious behavior is detected, corrections can be made promptly to protect user assets.

1. Cross-chain asset transfer

LayerZero technology supports cross-chain transfer of native assets and provides an efficient and economical solution:

• A single transaction enables cross-chain transfer: Users can complete asset transfers between different blockchains in one transaction, without the need for a complicated token packaging process.
• Instant transaction confirmation: Through LayerZero, after cross-chain transactions are confirmed on the source chain, the assets on the target chain are immediately transferred to the account, ensuring the immediacy and reliability of the transaction.

1. Integration with Stargate Finance

LayerZero technology is deeply integrated with Stargate Finance to provide infrastructure for its cross-chain liquidity pool and asset transfer:

• 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.

1. Advantages

LayerZero technology has several advantages over traditional cross-chain bridging solutions:

• efficient communication: LayerZero achieves efficient cross-chain communication through lightweight relays and oracles, reducing transaction delays and fees.
• Decentralization: LayerZero’s decentralized architecture ensures the security and reliability of the system, avoiding single points of failure and centralization risks.
• flexibility: LayerZero supports multiple blockchains and asset types, providing broad compatibility and applicability.

2.2 Delta algorithm

Stargate Finance’s Delta algorithm is one of its core innovations in enabling efficient and secure cross-chain asset transfers. The following is a detailed introduction to the Delta algorithm:

1. Basics of Delta Algorithm

The Delta algorithm is the core technology used by Stargate Finance to manage and optimize cross-chain liquidity pools. It uses programmatic control of the liquidity pool to achieve immediate guaranteed finality of cross-chain asset transfers and ensure the stability of the liquidity pool.

1. Instant guarantee of finality

The Delta algorithm ensures that the arrival of assets on the target chain is guaranteed after the transaction on the source chain is confirmed. This means that when users conduct cross-chain transactions, transactions will not fail due to insufficient liquidity or token incompatibility. 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 target chain assets.
• Target chain asset transfer: After the source chain transaction is confirmed, the assets on the target chain are immediately transferred to the user account to ensure the finality of the transaction.

1. Unify liquidity pools and soft partitionsStargate Finance realizes cross-chain asset transfer through unified liquidity pools, and the Delta algorithm intelligently manages these liquidity pools:

• Unified liquidity pool: Unified liquidity pool means that on the Stargate Finance platform, the liquidity of different blockchains is concentrated in a single pool. This structure allows cross-chain assets to flow freely without complex bridging processes, reducing slippage and significantly improving liquidity and transaction efficiency.
• soft partition: The liquidity pool is dynamically divided into multiple parts (soft partitions). For example, the liquidity pool of the Ethereum network can allocate part of the funds to the BNB chain or Fantom chain, etc. These partitions can borrow from each other in times of liquidity crises and be repaid after transactions are processed.

1. Liquidity management and rebalancing mechanismIn order to prevent the liquidity pool from being exhausted under high concurrent requests, the Delta algorithm introduces a rebalancing mechanism to maintain the stability and efficiency of the liquidity pool:

• rebalancing fee: Rebalancing fees are part of transaction fees designed to incentivize users to add or subtract assets from the liquidity pool to maintain the balance of the pool. Rebalancing fees are calculated based on transaction size and the current pool’s balance.
• bonus system: Rebalancing fees collected are accumulated and distributed to users who help rebalance the liquidity pool, with the amount of the reward determined by the contribution of user transactions to the balance of the pool.

1. Dynamic liquidity managementThe Delta algorithm dynamically manages the liquidity pool to ensure that the liquidity pool is not exhausted when large-scale simultaneous transfers between different blockchains occur:

• Liquidity allocation: Funds in the liquidity pool are dynamically allocated to different blockchains, ensuring that each blockchain has sufficient liquidity to handle transaction requests.
• Liquidity borrowing: When liquidity is tight, liquidity pools between different blockchains can borrow from each other to ensure smooth transactions.

2.3 Centralized Applications (DApps)

Stargate Finance enables efficient and secure cross-chain asset management and transactions through its decentralized applications (DApps). The following is a detailed introduction to Stargate Finance DApp:

1. Core functions of DAppStargate Finance’s decentralized applications (DApps) provide users with a range of powerful and flexible features:

• Cross-chain asset transfer: Users can seamlessly transfer native assets between different blockchains without a complicated bridging process.
• Liquidity provision and mining: Users can provide liquidity to the liquidity pool and receive rewards by participating in liquidity mining.
• Cross-chain transactions: Supports instant exchange between tokens on different blockchains, and users can easily conduct cross-chain transactions.

1. Cross-chain asset transferOne of the main functions of Stargate Finance DApp is cross-chain asset transfer, which is implemented as follows:

• Complete cross-chain transfer in a single transaction: Users only need to perform a transaction to transfer assets between different blockchains. This greatly simplifies the operation process and improves user experience.
• Instant transaction confirmation: Through LayerZero technology, after cross-chain transactions are confirmed on the source chain, the assets on the target chain are immediately transferred to the account, ensuring the immediacy and reliability of the transaction.
• native assets: Users use native assets instead of wrapped tokens during the transfer process, thus avoiding additional fees and complex operations.

1. Liquidity provision and miningStargate Finance DApp allows users to provide liquidity to liquidity pools and receive stablecoin rewards by participating in liquidity mining:

• Unified liquidity pool: Users can deposit assets into a unified liquidity pool and participate in liquidity provision activities on multiple blockchains.
• Income Distribution: Liquidity providers (LPs) are rewarded in proportion to the liquidity they provide, with rewards issued in the form of stablecoins representing 0.045% of the fees collected on each transfer transaction.
• Flexible liquidity management: LP tokens can be redeemed at any time, allowing users to flexibly manage their liquidity provision positions.

1. Cross-chain transactionsStargate Finance DApp supports instant exchange between tokens on different blockchains and provides convenient cross-chain transaction functions:

• One-click exchange: Users can exchange tokens between different blockchains, such as exchanging USDT on the Ethereum network for BUSD on the BNB network.
• Reduce slippage: The deep liquidity of the unified liquidity pool reduces slippage during the transaction process, ensuring that users receive fairer and more accurate transaction prices.

1. User interface and experienceStargate Finance DApp provides a user-friendly interface that simplifies the process of cross-chain asset management and transactions:

• Intuitive interface design: The interface design of DApp is simple and intuitive, allowing users to easily conduct cross-chain transactions and liquidity management.
• Simplified operating procedures: Users do not need to understand complex technical details and can complete cross-chain asset transfers and transactions with simple operations.

3. STG Token

The STG token is the native token of the Stargate Finance platform and plays a key role in the entire ecosystem. The following is a detailed introduction to the STG token:

1. Overview of STG TokenThe STG token is the native token of the Stargate Finance platform and is used for a variety of purposes, including liquidity provision, platform governance and reward mechanisms. The STG token is designed to support the long-term growth of the platform and user engagement.

2. Purpose governance and voting of STG tokens

• Staking and governance: Users can pledge STG tokens to obtain vestG (vote-escrowd STG) tokens to participate in platform governance. Users holding vestG tokens can vote on the platform’s governance proposals, including platform fee adjustments, liquidity pool configuration and other key matters.
• time weighted rewards: The longer a user stakes STG tokens, the more vestG tokens a user receives, thereby increasing their voting power in governance. This mechanism ensures holders’ long-term participation and focus on the success of the platform.

Liquidity provision and mining

• Liquidity provision: Users can provide STG tokens to the platform’s liquidity pool to help enhance the overall liquidity of the platform. In return, Liquidity Providers (LPs) are rewarded with a portion of transaction fees.
• Liquidity mining: By participating in liquidity mining activities, users can receive additional STG token rewards. Liquidity mining not only improves the liquidity of the platform, but also provides users with additional sources of income.

Transactions and cross-chain transfers

• fee reduction: Users can enjoy fee reductions when using STG tokens for transactions and cross-chain asset transfers. For example, protocol transfer fees are waived when using STG tokens for cross-chain transfers, while non-STG token transactions are subject to a 0.06% fee.

Issuance and distribution of STG tokens

• total supply: The total supply of STG tokens is 1 billion, and the current circulating supply is 205 million, accounting for 20.43% of the total supply.
• initial allocation: The initial distribution of STG tokens is as follows:

• 17.5% allocated to the team
• 17.5% allocated to investors
• 15.0% for protocol launch
• 15.95% for Bonding Curve
• 2.11% for initial release plan
• 1.55% for Bond Curve DEXs
• 30.39% allocated to the community

Unlock schedule

• Team and investor allocation: The allocated shares of the team and investors are gradually unlocked within 1-2 years to ensure stability in the early stages of the project and control of the circulating supply.
• community allocation: The community allocation section is unlocked immediately upon project launch so that the team and community can effectively allocate funds and promote the development of the protocol.

Economic Model of STG TokenThe STG token’s economic model is designed to support the platform’s long-term growth and user engagement:

• Incentives: Through the reward mechanism provided by staking and liquidity, STG tokens encourage users to actively participate in various activities of the platform and enhance the overall vitality of the platform.
• deflationary mechanism: Part of the transaction fees and rebalancing fees will be used to buy back and destroy STG tokens, reducing the circulating supply on the market and increasing the scarcity and value of the tokens.

Token performance

• Current price: $0.5079 (up 8.46% in the past 7 days)
• Market value:$103,775,760 (up 1.48%)
• 24 hour trading volume:$20,048,614 (up 70.74%)
• Market capitalization/trading volume ratio：19.40%
• Fully diluted market value：$507,868,245
• price trend: The price will fluctuate significantly between April 2023 and May 2024. At the beginning of April 2023 the price was around $0.4682, after which it experienced a period of decline before rebounding significantly in late May.
• Increased market interest: 24-hour trading volume increased by 70.74%, indicating a significant increase in trading activity in the short term. This may reflect increased market interest and confidence in the Stargate Finance project.
• Market capitalization growth: The market capitalization rose slightly by 1.48%, but compared to the significant increase in trading volume, this may mean that there is a lot of short-term trading activity.

4. Project evaluation

4.1 Track analysis

Stargate Finance project belongs toThe field of decentralized finance (DeFi), with a specific focus on cross-chain interoperability and liquidity management. The core goal of the project is to achieve seamless asset transfer and efficient liquidity management between different blockchains through LayerZero technology and Delta algorithm. This makes Stargate Finance one of the indispensable infrastructures in the DeFi ecosystem. In the DeFi field, there are several projects similar to Stargate Finance that focus on cross-chain interoperability and liquidity management:1. Polkadot (DOT)

• Introduction: Polkadot is a blockchain protocol that supports the interoperability of multiple blockchains and is designed to enable cross-chain communication and data sharing. It allows interoperability between different blockchains through relay chain and parachain architecture.
• Similarity: Similar to Stargate Finance, Polkadot is also committed to solving interoperability issues between blockchains, but it does so primarily by building a multi-chain ecosystem rather than liquidity pools and cross-chain transfers.

1. Cosmos (ATOM)

• Introduction: Cosmos is a decentralized network designed to enable interoperability between blockchains. It uses IBC (Inter-chain Communication Protocol) and Tendermint consensus mechanism to provide secure and efficient cross-chain communication.
• Similarity: Cosmos and Stargate Finance both focus on cross-chain interoperability. Cosmos provides a framework that enables different blockchains to interoperate, while Stargate Finance enables cross-chain transfers of assets through a unified liquidity pool.

1. Thorchain (RUNE)

• Introduction: Thorchain is a decentralized liquidity protocol that allows users to seamlessly exchange crypto assets between different blockchains. It enables cross-chain exchange of assets through inter-chain liquidity pools and RUNE tokens.
• Similarity: Thorchain is similar to Stargate Finance in that both provide cross-chain asset exchange and liquidity pool management, but Thorchain mainly implements it through a decentralized node network and liquidity pool.

4.2 Project Benefits

1. Cross-chain interoperabilityOne of the main advantages of Stargate Finance is its strong cross-chain interoperability capabilities. Through LayerZero technology, Stargate Finance realizes direct communication between different blockchains, solves many problems in traditional cross-chain bridging solutions, and provides Safe and efficient cross-chain asset transfer solution. Different blockchains share a unified liquidity pool, which greatly improves liquidity and transaction efficiency, reduces slippage, and improves user experience.

2. Instant transaction confirmation:Once a user submits and confirms a transaction on the source chain, the arrival of assets on the target chain is guaranteed. This reduces transaction delays and ensures users a reliable experience in cross-chain transactions.3. User-friendly operating experience

• Simplified cross-chain transfer: Users can complete asset transfers between different blockchains in a single transaction without the need for complex bridging processes, which greatly simplifies the operation process and improves the user experience.
• Intuitive interface design: Stargate Finance provides a user-friendly interface that enables users to easily conduct cross-chain transactions and liquidity management, and is suitable for all types of user groups.

1. Diverse incentive mechanisms

• Liquidity provision and mining: Users can provide liquidity to the liquidity pool and receive rewards by participating in liquidity mining. This not only improves the liquidity of the platform, but also provides users with an additional source of revenue.
• Governance and voting: Users can pledge STG tokens to obtain vestG tokens, thereby participating in platform governance and voting on important matters of the platform. This mechanism encourages users to hold and participate in platform development for a long time.

1. Security and decentralization

• Distributed verification and fraud prevention mechanism: LayerZero technology ensures the security and reliability of cross-chain transactions, verifies transaction data through distributed oracles and relays, and introduces an anti-fraud mechanism to protect user assets.
• Decentralized architecture: Stargate Finance’s decentralized architecture reduces the risk of single points of failure and enhances the resilience of the overall network.

1. Market performance

• Significant price movements and trading activity: In the past week, the STG token price has increased by 8.46%, and the 24-hour trading volume has increased significantly, indicating that the market’s interest and confidence in the project are growing.

4.3 Insufficient items

1. Rebalancing fees

• The complexity of the fee mechanism: Although the rebalancing fee mechanism is effective, its calculation method is relatively complex, which may make it difficult for some users to understand and accept it. High-frequency trading users may be highly sensitive to the fee mechanism, which affects their willingness to participate.

1. Market competition

• Competition is fierce: Competition in the DeFi field is very fierce, and there are many similar projects, such as Polkadot, Cosmos, Thorchain, etc. These projects also have unique advantages in cross-chain interoperability and liquidity management, and Stargate Finance needs to continue to innovate to remain competitive.

1. Ecosystem development

• Ecosystem construction: As an emerging project, Stargate Finance needs to continuously expand its ecosystem, including integration with more blockchains and DApps. This requires time and resources and may impact the project’s rapid development and user coverage.

1. Market and regulatory risks

• Crypto market volatility: The high volatility of the crypto market is a risk for any crypto project. Dramatic changes in market sentiment may affect the price of STG tokens and users’ investment confidence.
• regulatory uncertainty: The regulatory environment for cryptocurrency and DeFi projects around the world is constantly changing, which may have an impact on project operations and user participation.

5 Conclusion

Stargate Finance is an innovative decentralized finance (DeFi) project that uses LayerZero technology and Delta algorithm to achieve efficient and secure cross-chain asset transfer and liquidity management. Its unified liquidity pool and instant transaction confirmation capabilities significantly improve user experience and blockchain interoperability. Despite facing challenges such as technical complexity, security risks and market competition, Stargate Finance has shown strong development potential in the DeFi field with its technological advantages and innovation capabilities. As the ecosystem expands and user participation increases, Stargate Finance is expected to become the leading platform for cross-chain interoperability and liquidity management, driving the further development of decentralized finance.

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