Magpie: Aggregating Bridge Liquidity.
With multi-chain increasingly becoming the norm for DeFi, bridges will need their liquidity aggregated just as DEXs do in order to support the increased number of transactions and facilitate cross-chain swaps.
Why is bridge liquidity aggregation important?
While some could go on for hours or pages about this, we’ll keep it short for you.
Just as it’s important to aggregate liquidity between DEXs in order to provide a great user experience for those wanting to make swaps and get the best price, it’s just as important to use bridges and their liquidity to facilitate cross-chain swaps.
Bridge liquidity needs to be utilized for swapping in and out. If there’s not enough, swaps could fail or users could get a bad price, something nobody wants. With some bridges, if there isn’t enough liquidity, you’ll just be put in limbo until you either pay for another transaction to reverse the previous one or more liquidity is added to complete it.
Just as with trying to find the right DEX, it takes time to find the right Bridge, and find one with enough liquidity.
Wouldn’t it be great if you knew a bird who could just grab all that liquidity and create a nice little nest to lay some eggs in, excuse us, we’re birds, we meant a nice dApp to take care of all that work for you? Luckily, you know a bird who can do just that: Magpie Protocol.
Our birds can snatch up everything required and fly it right on over to the other chain without you needing to figure out which bridge to use or worrying about how much liquidity is in the pool.
To make sure you get the best user experience possible, we partnered with Wormhole and Stargate, both of which have massive nests, sorry, pools of liquidity.
Wormhole liquidity and Magpie
At this time, Wormhole’s Portal Token Bridge connects 19 blockchain networks together and through using Portal, assets can be swapped between any chain Wormhole is connected to.
Anything connected to the Wormhole SDK can be used by any other connected app, as well as utilize Portal Token bridge liquidity, and with roughly 220 million in bridge liquidity across the chains, it opens up a lot of liquidity for dApps to use.
As Portal is an app built on top of Wormhole, when you bridge tokens through Portal, the origin token gets locked in a smart contract, and a new Portal wrapped token gets minted on the target chain. These can be swapped for native tokens on the target chain using different liquidity markets, such as Uniswap, Pancakeswap, and Trader Joe.
Magpie aggregates this bridge liquidity and connected DEXs to make sure our users are getting the best prices available on the connected chains when swapping, as our app gains access to all the liquidity connected through Wormhole.
How does Stargate bridge liquidity work?
Let’s give a quick rundown of Stargate:
It is a fully composable (meaning that it can be built on top, utilizing it like we’re doing here at Magpie) liquidity transport protocol utilizing native assets on multiple chains.
Currently, Stargate has almost half a billion in a unified liquidity pool native assets across six blockchains. This means that while the assets are spread across multiple chains, they act as one unified liquidity pool.
In addition, Stargate’s transfers have instant guaranteed finality: transactions submitted on the source chain are guaranteed on the destination chain, taking the what-if out of worrying about going cross-chain when compared to some other options out there.
As Stargate is directly integrated with Magpie, we can use all of its features and benefits while abstracting away the bridging process in order to make the entire process of going cross-chain a breeze. This means you don’t have to worry about finding a bridge with liquidity, wrapping tokens, doing multiple swaps, or anything else. All you need to do is select the chains and tokens you want, and we’ll glide along that breeze to bring them to you.
So we’ve gone over how Magpie uses Wormhole and Stargate, but what does that mean for you?
As Magpie aggregates bridge liquidity from both Wormhole and Stargate, with more to be added in the future, we won’t have to rely on our own liquidity pools on each and every chain.
Rather, aggregating from existing bridges and DEXs allows us to provide the best prices and user experience to Magpie users, drawing upon hugely deep liquidity pools and teaming up with other amazing projects in the space to help make DeFi better.
At one time or another, you’ve probably decided against buying a token after seeing what chain or DEX it’s on and then thinking about how many steps you’d have to take in order to get to it.
The more steps involved the less anybody wants to do something, which is why it’s nice for a bird, we can skip all the steps and fly there. All you’ve got to do is tell us what tokens you want, what chain you want them on, and Magpie will take care of it.
