What is Stargate Finance? STG Token Explained

It is no major big deal to see chains invading the crypto space. In the past years, we have seen chains like Arbitrum, Solana, and Avalanche.

Each of these chains operates as a different entity with its rules and mechanisms- runs smart contracts independently. Although, a chain like Arbitrum leverages security from the Ethereum mainnet. Furthermore, the only direct way to transfer tokens between them is by using the blockchain bridge.

Photo credit: FXLeaders

For example, you can deposit ETH to a bridge on Ethereum, which will mint an equivalent amount of eth on Arbitrum. However, the process is relatively slow and only effective using the same tokens, So you would need several transactions to swap one token for another across two chains. But what if there is a way to swap different tokens across two in one transaction? Enter Stargate Finance!

Stargate is a bridge that enables interchain swaps and liquidity. It is built on LayerZero protocol, which allows different chains to interact with other. With Stargate, you can swap your USDT on Ethereum to USDC on Arbitrum in one single transaction, and it supports many other chains!

According to Stargate, they have implemented three core features that make them the perfect bridge:

1. Instant guaranteed finality: when your transaction on the source chain is confirmed, your tokens will be guaranteed to arrive on the destination chain.

2. Unified Liquidity: Stargate provides shared access to a single liquidity pool across multiple chains.

3. Native assets: the bridge uses native assets when swapping and not wrapped tokens that require additional swaps to acquire.

Overall, DEXs like Uniswap can implement Stargate to enable interchain swaps in their app. Community-owned liquidity pools power all these interchain swaps. You can add liquidity to these pools with your tokens and earn stablecoin rewards on every Stargate transfer.

Once you have provided liquidity, you get LP tokens. You can deposit these in exchange for the STG reward, Stargate’s token. Your STG tokens are your keys to Stargate governance. You can lock them to receive the veSTG tokens, which gives you voting over Stargate. The longer you lock your STG tokens, the more voting power you get in the long run.

The original attractions of crypto were Speed, borderlessness, privacy, and universality. But with so many chains emerging and their complexities increasing, it has been hard to fulfill these goals. Chains have difficulty communicating, and the user is left holding the bag with time-wasting and money-consuming processes.

Stargate’s proposed solution paves the way for a new direction that DeFi is heading in. An interchain universe and the free flow of liquidity between all chains.



I am a passionate content writer, copywriter, and SEO writer. And am driven by helping individuals and business owners grow their businesses.

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Owolabi Sodeeq

I am a passionate content writer, copywriter, and SEO writer. And am driven by helping individuals and business owners grow their businesses.