Stargate Finance

Stargate is a composable cross-chain liquidity protocol built on LayerZero V2 as its transport layer. It provides unified liquidity pools for native assets (USDC, USDT, ETH) across multiple blockchains, enabling seamless asset transfers without fragmenting liquidity.

Stargate uses LayerZero V2 messaging infrastructure to coordinate liquidity between StargatePool contracts on chains with native assets and StargateOFT contracts on emerging chains needing access to deep liquidity, creating a unified network where any protocol can access native assets instead of bootstrapping their own cross-chain infrastructure.

Stargate's Dual Role

Stargate plays two key roles in the LayerZero ecosystem: (1) a set of on-chain smart contracts providing deep cross-chain liquidity infrastructure, and (2) a unified frontend bridge that routes omnichain transfers for both Stargate assets and all LayerZero Omnichain Fungible Tokens (OFTs).

1. Liquidity Protocol (EVM Smart Contracts)

Stargate operates smart contracts that manage coordinated liquidity pools for native assets:

• StargatePool: Holds native assets (e.g., USDC, ETH) on core chains with deep liquidity
• StargateOFT: Mints backed representations (e.g., USDC.e) on emerging chains
• TokenMessaging: Every transfer uses LayerZero messaging, DVNs, and Executors
• EVM Only: Protocol contracts deployed on EVM chains.

For Developers:

• StargatePool contracts hold native ERC20 tokens (e.g., USDC) or native assets (e.g., ETH) and implement the IOFT interface for cross-chain transfers
• StargateOFT contracts have mint/burn authority on their corresponding ERC20 OFT tokens and implement the IOFT interface

Both contract types are drop-in compatible with LayerZero composability and other LayerZero contract standards (e.g., Omnichain Vaults).

How Stargate V2 Works

Stargate V2 uses two types of contracts to represent assets on multiple chains:

StargatePool (Native Chains)

• Holds native assets (e.g., USDC, ETH) in credit-allocated liquidity pools
• Deployed on major chains with existing deep liquidity in specific assets
• Pools can transfer directly to other pools on native chains or to Hydra chains

StargateOFT (Hydra Chains)

• Minted OFT representations backed by pool liquidity
• Deployed on emerging chains where deep native liquidity doesn't yet exist
• Can transfer point-to-point to other Hydra chains or redeem to native pools

The Hydra Mechanism

Stargate Hydra connects native liquidity pools with Hydra-enabled chains:

Key Benefits:

• Liquidity Extension: Emerging chains get instant access to deep pool liquidity
• No Bootstrapping: No need to create new liquidity on every chain
• Full Redeemability: Any Hydra OFT can be redeemed for native pool assets
• Unified Network: All chains share the same liquidity base

Credit Allocation System

Stargate uses a credit allocation system to manage liquidity across all Stargate contracts (both StargatePool and StargateOFT) and ensure reliable transfers.

What are Credits?

Credits track token inflows and outflows in the protocol. Each pathway between chains (LayerZero endpoint IDs) has allocated credits that determine how much liquidity can move through that route.

Instant Guaranteed Finality

Thanks to credit allocation, Stargate provides Instant Guaranteed Finality: swaps are settled locally and immediately on the source chain, without risk of revert, rollback, or double spending. While you still wait for LayerZero to deliver tokens on the destination chain, Stargate guarantees the destination transaction will succeed.

This is possible because Stargate maintains these invariants:

• For each pool: Pool balance ≥ local unallocated credits + sum of allocated credits in remote paths
• For the system: Sum of pool balances ≥ sum of OFT supplies + sum of total values locked

AI Planning Module (AIPM)

Credits in Stargate V2 are managed by the AI Planning Module, which conducts automated credit rebalancing via LayerZero messages. The AIPM:

• Monitors transfer volume across all pathways
• Dynamically reallocates credits to high-demand routes
• Ensures optimal capital efficiency
• Prevents credit shortages on active pathways

Stargate V1 vs V2: Stargate V1 had static credits on pathways. Stargate V2 has dynamic credits, providing much greater capital efficiency through automated rebalancing.

Credit Operations

Credit increases/decreases are coordinated through LayerZero messages between chains using the CreditMessaging contract. All OFTs are backed by pool liquidity through credit guarantees verified by LayerZero DVNs.

Transfer Types

Stargate supports four transfer patterns, all coordinated through LayerZero V2 messaging and the credit allocation system:

Native Pool Transfers

Pool-to-Pool: Direct transfers between core chains (e.g., Ethereum ↔ Arbitrum) where native assets are locked/unlocked between StargatePool contracts. This provides the most efficient path for moving established assets between chains with deep liquidity.

Hydra OFT Transfers

Pool-to-OFT: Extending liquidity from core chains to Hydra chains (e.g., Ethereum → Bera) where native assets are locked in pools and minted as OFTs on emerging chains.

OFT-to-OFT: Point-to-point transfers between Hydra chains (e.g., Bera ↔ Scroll) where OFTs are burned and minted without touching pool liquidity.

OFT-to-Pool: Redeeming back to native assets (e.g., Bera → Ethereum) where OFTs are burned and native assets are unlocked from pools, providing global redeemability.

All transfers use LayerZero V2 for secure cross-chain communication, with DVNs verifying state changes and Executors handling automatic execution.

2. Universal Bridge Hub (Frontend Application)

Because of its critical role in moving liquidity and proven LayerZero integration, Stargate also operates the de facto bridge interface for the broader omnichain ecosystem:

The stargate.finance frontend supports:

• Stargate protocol assets (StargatePool and StargateOFT)
• All LayerZero OFTs across any chain (EVM and non-EVMs)
• Circle's CCTP and other common interoperability standards

Important: The stargate.finance frontend bridges LayerZero OFT transfers across EVM and non-EVM chains, but Stargate protocol contracts are EVM-only and live solely on LayerZero V2. Frontend support for non-EVMs does not mean the Stargate protocol itself covers non-EVM chains.

Why Stargate Matters

Stargate holds a unique position in the LayerZero ecosystem, serving as both critical infrastructure and the primary user gateway for omnichain assets.

As Protocol Infrastructure: Stargate provides the foundational liquidity layer that other protocols build on. Instead of every DeFi protocol bootstrapping their own cross-chain USDC or ETH infrastructure, they can simply integrate with Stargate's existing deep pools. This creates a network effect - as more protocols use Stargate liquidity, it becomes the standard liquidity layer for the ecosystem.

As Application Gateway: Because Stargate already solved the hard problems of liquidity management and cross-chain coordination at scale, the Stargate team built the most comprehensive bridge interface for the broader OFT ecosystem. The stargate.finance frontend serves as the de facto bridge UI not just for Stargate assets, but for all LayerZero OFTs across any chain.

As Proof of Concept: Stargate demonstrates that LayerZero V2 can support production-grade financial protocols with real economic value. It's not just a messaging layer - it's secure and reliable enough to manage hundreds of millions in liquidity across dozens of chains, with sophisticated credit allocation and automated rebalancing happening entirely through LayerZero messages.

This dual role - providing both the liquidity infrastructure and the user interface - makes Stargate the central hub for omnichain asset movement in the LayerZero ecosystem.

When to Use Stargate vs Custom OFT

Scenario	Recommendation
Need USDC/USDT/ETH liquidity	✅ Use Stargate protocol contracts
Building vaults/lending with native assets	✅ Use Stargate as underlying asset
Launching a new token	⚠️ Deploy your own OFT
Need custom token economics	⚠️ Deploy your own OFT
Making existing ERC20 omnichain	⚠️ Deploy OFT Adapter

Finding Stargate Contracts

LayerZero Deployments Page:

1. Visit OFT Ecosystem & Stargate Assets
2. Search for your chain or asset (e.g., "USDC")
3. Stargate contracts appear at the top of each chain's contract list

Stargate Resources:

• Contract Addresses
• Stargate API

Transfer Modes & Composability

Stargate supports two transfer modes with different composability capabilities:

Taxi Mode

• Single transfer per Stargate message
• Supports composability - composeMsg can trigger additional actions on destination (e.g., vault deposits, swaps)
• Automatically enabled when composeMsg is non-empty and oftCmd is empty
• Required for OVaults and other composable strategies

Bus Mode

• Multiple transfers bundled in one Stargate message for gas efficiency
• Does NOT support composability - no lzCompose() execution on destination
• Optimized for simple transfers without additional logic

Composability Requirement

Composable strategies require Taxi mode. Bus mode will not trigger lzCompose() calls. All implementation guides in this documentation cover Taxi mode only.

Next Steps

Learn More:

• Stargate Protocol Docs - Full protocol documentation and architecture
• OFT Standard - Understand the IOFT interface
• Value Transfer Patterns - Compare approaches

Build:

• Stargate Integration Guide - Integrate Stargate contracts
• OVault Overview - Build vaults with Stargate assets
• Find Contracts - Get deployed addresses

Explore:

• Stargate App - Use the bridge interface
• LayerZero Scan - Track transfers
• Stargate Analytics - View pool liquidity

Summary

Stargate Protocol: EVM smart contracts providing unified liquidity for native assets, built entirely on LayerZero V2

Stargate Frontend: Bridge UI serving as the universal gateway for all OFT transfers and common interoperability standards

For LayerZero Developers: Use Stargate's deep liquidity pools instead of bootstrapping your own, or integrate via the frontend for multi-chain OFT support.

Stargate demonstrates the power of building sophisticated financial protocols on LayerZero's messaging infrastructure.