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- 1 Stargate Finance was specifically designed to solve the bridging trilemma.
- 2 Thanks to LayerZero, Stargate users can deliver liquidity on a single blockchain
Decentralized crypto exchanges are gaining popularity due to DeFi. Stargate Finance, developed by LayerZero Labs, is one of the most ambitious projects in this space. It offers customized benefits to stand out from competitors. Below is a guide on Stargate Finance and its advantages.
What is Stargate Finance?
Stargate Finance is a modern decentralized crypto exchange that aims to deliver a fully composable native asset bridge. The platform, which functions as a liquidity transport protocol, allows users to add liquidity to various pools, stake assets, and transfer native assets.
Users can also farm tokens by staking their assets and gain governance over the Stargate Finance exchange. Users need to connect their wallets to the exchange to use the platform.
Stargate Finance focuses on stablecoins, which reduces the risk of losing money as their value is pegged to stable assets. The exchange is user-friendly for all investors. Users can earn high returns with unified liquidity pools and extensive farming features.
Although Stargate Finance was created by LayerZero Labs, it is a community-driven project. The exchange strives to provide complete transparency to users with documents and white papers addressing potential issues.
The Reason Behind Starting Stargate Finance
Stargate Finance was specifically designed to solve the bridging trilemma. Traditional bridges that connect two blockchains use a method known as fractured liquidity, which requires separate pools to be maintained for bridged tokens.
When using a fractured scheme, each blockchain maintains its liquidity pool, making the process more complicated.
A unified liquidity technique is necessary to resolve this issue, allowing deposits and withdrawals from multiple blockchains to originate from one liquidity pool. However, this benefit is not free and results in additional difficulties.
The main issue with unified liquidity is ensuring instant guaranteed finality of transactions. For instance, if multiple transactions withdraw funds from the single liquidity pool simultaneously, the pool must have enough funds to cover all of these transactions, otherwise, the benefits of a shared liquidity pool become irrelevant.
LayerZero’s feature that allows Stargate to solve the bridging trilemma is its ability to transmit information correctly, connecting every blockchain’s liquidity and improving the efficiency of the entire pool.
Thanks to LayerZero, Stargate users can deliver liquidity on a single blockchain, after which an algorithm allocates portions of the liquidity to other connected blockchains. This process delivers instant guaranteed finality, native asset transactions and unified liquidity, solving the trilemma.
Summary
Stargate Finance provides a unique native asset bridge that sets it apart from other cryptocurrency projects, of which there are thousands to choose from. By joining the Stargate Finance platform, investors have access to a wide range of options for farming tokens or participating in protocol governance. To purchase the STG token, simply follow a few easy steps to place a buy order on Bybit.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos or related indexes comes with a risk of financial loss.
Amanda Shinoy is one of the few women in the space invested knee-deep in crypto. An advocate for increasing the presence of women in crypto, she is known for her accurate technical analysis and price prediction of cryptocurrencies. Readers are often waiting for her opinion about the next rally. She is a finance expert with an MBA in finance. Quitting a corporate job at a leading financial institution, she now engages herself full-time into financial education for the general public.
