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Stargate Finance Review 2024: Features & User Experience
Swen Keller
- URL: https://stargate.finance/
- Year Founded: 2018
- Native Token: Yes (STG)
- Supported Assets: Ethereum, DAI, USDC, USDT, BUSD, WETH, FRAX, SUSD
- Supported Networks: Ethereum, Binance Smart Chain, Arbitrium, Optimism, Scroll, Avalanche, Polygon, Fantom, Kava, Linea, Base, and Metis
- Fees: Cross-chain swap fee as low as 0.06%
Stargate Finance Review: Our Take
After our team’s extensive use of this cross-chain-bridge protocol, we found that Stargate Finance stands out for facilitating one transaction cross-chain swaps in native assets and low trading fees.
However, its major con is the limited assets it offers which restrict users looking to explore other coins from using the platform.
What is Stargate Finance and How Does it Work?
Stargate Finance is a cross-chain bridge solution that allows users and dApps to transfer native assets to multiple chains while accessing the protocol’s unified liquidity pools.
All Stargate Finance transfers have instant finality which ensures that a transfer submitted on the source chain is guaranteed on the destination chain.
Concerning its working, DeFi users can swap native assets cross-chain on Stargate in one transaction. For instance, users can swap USDT on Arbitrium for USDC on Ethereum.
Applications can also compose Stargate Finance to create native cross-chain transactions at the app level.
So a decentralized exchange can compose Stargate to finalize cross-chain liquidity transfers and single cross-chain swap transactions like swapped BNB with Ethereum in one transaction all within the decentralized exchanges’s user interface.
Also, yield aggregators can compose Stargate to deploy assets cross-chain which generates fresh APY opportunities.
These cross-chain swaps are supported by the Stargate Finance community’s unified liquidity pools.
That said, where Stargate Finance differs from other similar cross-chain bridge solutions is that users and applications swap in native assets not wrapped assets that need additional swaps and fees before receiving the desired asset.
Pros
- Low fees
- Swap in native assets
- One transaction is needed
Cons
- Limited asset support
Stargate Finance Review: Unique Features
Staking
By Staking their tokens, Stargate Finance offers community members the opportunity to participate in Stargate DAO governance.
The Staking feature allows Stargate Finance users to lock their STG tokens and receive VeSTG (vote-escrowed STG), the governance token of Stargate.
The staking duration on Stargate Finance is from 1 to 36 months.
However, the longer you vote, the more Voting Power you have.
To stake your STG, do the following:
- Go to https://stargate.finance/stake
- Scroll to the “Available” tab and select STG on one of the networks to stake
- Enter the amount of STG tokens you want to stake and the staking duration
- Next, click “Create Stake” to continue.
- Confirm your transactions on the MetaMask notification window
- Once this is done, you will see a confirmation message and be able to view your transaction records in your account section.
- At the expiration of your staking duration, you can choose to either unstake or re-stake your tokens.
To claim your STG staking reward:
- Go to https://stargate.finance/stake
- You will see a dashboard of general information on STG staking
- Connect the wallet that you staked STG on
- Once you do this, you will see the information change in the section “My Voting Power”
- Go under the “Claim Staking Fees” tab and click “Claim”
- Click “Confirm” in your wallet.
Once the reward has been successfully claimed a message showing “Successfully Claimed Fee Rewards” on the screen.
The APY for the staked tokens displayed is based on the last claim period data. The APY is calculated based on the total value locked and the total value distributed to veSTG lockers for the claim.
The displayed APY is subject to change based on the volumes and fees generated by the protocol.
Rewards can be claimed monthly from each of the chains the tokens are staked on.
Stargate DAO
Stargate is governed by the Stargate DAO.
Governance is only available to Stargate token holders via voting escrow.
The DAO plays an important role in the decentralization and autonomy of the Stargate protocol. The DAO decides and votes on all Stargate networks and incentivizes matters like integrations, protocol development, tokenomics, and the distribution or emissions to stablecoin liquidity providers.
While all DAO members that stake tokens have voting power in the governance or the protocol, some DAO members have greater governance weight than others.
With Time-weighted voting, long-term Stargate token holders have greater governance weight and control of the protocol.
The unit of Stargate governance voting power is veSTG.
This is what the user gets once they stake the Stargate token. veSTG is not transferable.
The veSTG balance decays linearly until the locked STG unlock decreases.
The Stargate DAO is made up of different groups with varying responsibilities. This includes the Multisig and the Stargate Foundation. Below is an explanation of each group and other aspects of the DAO.
Stargate Foundation
The Stargate Foundation is dedicated to the development, growth, and sustainability of the Stargate protocol. The Stargate Foundation is responsible for Marketing and communication initiatives, partnerships with other DeFi & crypto organizations, and community-led initiatives including grants to contributors and the day-to-day operations, and maintenance of the protocol.
Multisig
Sometimes, a vote may require a change to the Stargate protocol or its treasury that requires action via multi-sig.
Stargate Protocol has a multisig of trusted group of community, responsible for signing on behalf of STG holders.
Despite having the ability to represent other token holders, Multisig must strictly adhere to all the directives given via the governance process.
As stated already, all decisions about Stargate are decided and voted on by the DAO.
Changes to the protocol must be done through a proposal. And proposals are classified as Core or Protocol.
- Core Proposals: These proposals are material to major structural changes or the governance process and carry higher quorum and support thresholds. Core proposals have a quorum threshold of 10% and a support threshold of 80%.
- Protocol Proposals: These proposals include all other changes to the protocols including protocol code changes, protocol, protocol treasury allocations, and parameter changes (e.g. changing Stargate liquidity pool connections & weights and changing fee structures). Protocol Proposals have a lower quorum and support threshold than Core Proposals. The quorum threshold and support threshold for Protocol Proposals are 2.5% and 70% respectively.
Cryptocurrencies Available on Stargate Finance
Stargate Finance allows the transfer of the following assets across different networks: USDC, USDT, USDD, FRAX, LUSD, ETH, and BUSD.
Networks Available on Stargate Finance
Stargate Finance supports over 10 networks.
Supported networks include Ethereum, BNB Chain, Polygon, Avalanche, Arbitrum, Fantom, Metis, Optimism, Base, Linea, and Kava.
Stargate Finance Review: Fees
The Stargate Finance liquidity transport protocol charges a flat cross-chain transfer fee of 0.06% per non-STG token transaction.
Also, Stargate Finance transfers can incur pool rebalancing fees (dynamic) depending on how imbalanced the origin and destination liquidity pools are concerning pool equilibrium weights.
Note that STG token transfers do not attract rebalancing fees.
Is Stargate Finance Safe?
Based on our firsthand observations of this crypto bridge, we can state that the Stargate Bridge is a secure crypto bridge.
Stargate Bridge has been audited 3 times by Zelliz, Zokyo, and Quantstamp.
Stargate Finance is controlled by Multisignatures that are overseen by the governance of the protocol.
Stargate also has a two-phase security mechanism to ensure a secure platform.
The first phase of the security mechanism is known as The Dome, while the second phase is known as Pre Crime. The Dome is designed to repel all attacks from harmful external contracts while the second phase assesses all messages from the Stargate Bridge and runs them on a local level to prevent any message or attack that can disrupt the system or cause irregularities in the accounting records from reaching the operational system.
Stargate also has a bug bounty program with a maximum reward of $15M on both the Stargate and LayerZero platforms.
Staking Rewards/ Liquidity Provider Yields
Stargate Finance offers various means for community members to earn a yield on the protocol via liquidity provision. Stargate accommodates only liquidity pools of stable assets. Users who stake their stable assets in these pools can expand their investment portfolios with the rewards they receive from liquidity provision. Since these stablecoins are pegged to a stable asset, the risk of losing money is reduced.
For every non-STG transfer, Stargate Finance takes a 0.06% fee which is distributed to veSTG holders, liquidity pool finders, and the protocol treasury.
Liquidity providers can earn 5 to 10% APY in STG emissions and STG tokens can be staked to receive veSTG in rewards.
The governance token received allows community members to participate in DAO control and earn rewards from transaction fees.
Also, Stargate Finance implemented rebalancing fees which are added to ensure liquidity pool balance across all networks when users deposit and withdraw cash.
Users who transfer cash away from the target are charged rebalancing fees, which are distributed to community members who contribute to liquidity pool rebalancing.
Also, the treasury fee flow can be used to incentivize rebalancing as well depending on liquidity pool deviation.
Users can also farm LP tokens to receive STG tokens as rewards.
Stargate Finance Native Token
The Stargate Finance token (STG token) is the native asset of the protocol and it is used to reward users that provide funds in the Stargate Finance liquidity pools.
These Stargate Finance liquidity pools are rewarded in the Stargate Protocol governance token (veSTG).
Community members can take part in the Stargate DAO governance with an account that holds a balance of the vote-escrowed STG (veSTG).
So STG can be staked to receive veSTG for voting power in the protocol.
Also, users who purchase STG in the Stargate Launch Auction receive the auction token aSTG.
STG has a maximum supply of 1 billion STG which have all been minted. Below is a breakdown of the initial allocation of STG:
- 17.50% to Stargate core contributors (1-year full lock-up, 2-year linear unlock thereafter)
- 17.50% to Investors (1-year full lock-up, 2-year linear unlock thereafter).
- 65.00% to Stargate community allocation, dedicated to fulfilling the protocol’s vision, making cross-chain liquidity transfer a seamless single transaction process.
Here is a breakdown of the 65% allocated to the Stargate Community
- 15.00% to Stargate protocol launch
- 10.00% to STG launch auction purchasers
- 5.00% to an STG-USDC pool on Curve.fi.
- 15.95% for Bonding Curve, post-launch
- 2.11% – Initial emissions program.
- Up to 1.55% will be added to Decentralized Exchanges on BNB, Avalanche, Polygon, Arbitrum, Optimism & Fantom
- The remaining 30.39% is dedicated to future community initiatives & the long-term success of Stargate.
STG Token can be bought in centralized exchanges like Bybit, Coinbase, Binance, and Gate.io.
It is also available on decentralized exchanges.
Things We Do Not Like about Stargate Finance
A major Stargate Finance con is that it supports a limited selection of cryptocurrencies.
This restricts users who want to explore other options aside from transferring assets from using the protocol.
Stargate Finance also requires Ethereum gas fees which are quite high when compared to other networks and it has a complex architecture reliant on LayerZero.
The STG token has a high inflation schedule as well.
Final Thoughts
Stargate Finance is a fully composed liquidity transport protocol that offers an innovative solution to cross-bridge swaps by ensuring one transaction cross-chain swaps with a certain finality. But it falls short in the number of supported assets which limits its use case.
While the Stargate Finance offers a seamless way to transfer assets between different blockchains, it’s crucial to compare its features with others in the market. For a closer look at another innovative solution, delve into our Across Protocol Review, which offers a unique set of functionalities and security measures.
FAQ
Most frequent questions and answers
Stargate Finance was created by LayerZero Labs with Caleb Banister, Bryan Pellegrino, and Ryan Zaric as the co-founders of the protocol.
The following chains are supported on Stargate Finance: Ethereum, Binance Smart Chain, Arbitrium, Optimism, Scroll, Avalanche, Polygon, Fantom, Kava, Linea, Base, and Metis.
The STG token is used as an incentive to provide liquidity on the Stargate Finance protocol as well as aid in the governance of Stargate Finance.
The Delta Algorithm is a balancing algorithm that permits allows you to transfer native assets with instant guaranteed finality.
We always try to provide the most accurate information available, and make sure our team follow through.
If you want to know more about our Crypto Exchanges Review Methodology follow the link below
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