Quick Take

• Stargate’s multi-chain bridge is now looking after $2 billion of cryptocurrency.


• The bridge’s liquidity has risen just days after raising $25 million in a token auction.

The total value locked (TVL) on Stargate, a multi-chain bridge on the LayerZero protocol, has risen to a couple of billions of dollars within a week of launch, according to data tracking site DeFi Llama.

Stargate lets users transfer assets between blockchain networks based on the messaging protocol LayerZero. It went live last week, following a public auction of its native token.

On 18 March, Stargate auctioned off 100 million stargate (STG) tokens and used the proceeds to create the bridge's initial liquidity. In the auction, the team raised $25 million using a bonding curve (where the prices of tokens increase during the sale).

The auction was open to all investors who could buy stargate tokens at a price of $0.25 per tokens vested for up to a year. Currently, the token trades at $2.30, per CoinGecko data, almost ten times the initial price.

The $2 billion worth of liquidity is spread across tokens pools on several blockchains: Ethereum, Avalanche, Optimism, BNB Chain, Polygon, Arbitrum, Optimism and Fantom. Traders will have, in part, deposited their tokens with the platform to take advantage of the 20-25% yield it currently offers on stablecoins.

Stargate's offering

The team has touted Stargate as the first to solve “the bridging trilemma” — a triple set of properties that, according to the team, makes any multichain bridge ideal for usage. 

Unlike other bridges, it does not rely on wrapping — a process where tokens have to be continuously minted and burned in order to move assets from one chain, and uses a 'omni-chain token' called stargate.  

Using the native token instead of trading wrapped tokens improves security, the team has claimed.  

“Native assets reduce the surface of attack vs traditional bridges by orders of magnitude and offer the ideal end user experience both at the application and consumer levels,” LayerZero Labs CEO Bryan Pellegrino told The Block.

Notably in the past, crypto bridges such as Multichain, Wormhole and Poly Network that use wrapping have become victims of multi-million dollar hacks.

Pellegrino added that relying on a native token to move funds may also help the bridge achieve ‘DeFi composability’ or how easily tokens can move from one DeFi application on one blockchain to another. 

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