Hey there 👋 ,

This newsletter is slightly late as I’m catching up after a trip abroad (my first in two years!).

Nevertheless, it’s still Monday somewhere in the world 😅

Today’s (shorter) post is on Stargate Finance - read on to why I think this could be an important innovation in DeFi.

A Fully Composable Cross-Chain Bridge

For those spending time in DeFi degen land (aka transacting tokens on different blockchains and attempting to stake, lend or borrow additional tokens using the collateral you already have), you’ll know the pain of constantly switching to different blockchains.

It’s slow, expensive, and susceptible to higher levels of risk.

Stargate Finance recently entered the ring: Stargate is a fully composable native asset bridge - this means it’s looking to solve all aspects of the ‘bridging trilemma'.

It’s hosted on Layer Zero, an ‘omnichain interoperability protocol’. This enables cross-chain applications on different blockchains to be able to speak to each other. It simplifies the bridging experience from about 30+ clicks and a whole lot of uncertainty, to a couple of clicks.

Cross-chain composability means users can use decentralized applications across chains without leaving the safety of their preferred chain.

We spoke about the ‘bridging trilemma’ before, but what does this actually mean?

Bridging Trilemma:

• Instant Guaranteed Finality - guarantee of funds on the destination chain when a transaction is successfully committed on the original chain

• Unified Liquidity - shares access of a single liquidity pool between multiple chains

• Native Assets - the user-desired assets (native or most liquid synthetic) on the destination chain

Stargate’s value proposition:

Stargate Finance is compelling because it’s currently offering:

1. 1-click bridging experience

2. 20-30% APY on stablecoins

3. Easily transact across up to seven blockchains

Before, developers had to choose between one or two benefits.

Now, with a Layer Zero protocol in place - it’s a lot more reliable and a much simpler process to use regular, native assets (not ‘wrapped’ assets e.g. WETH).

Current chains Stargate supports include:

• Ethereum

• Avalanche

• Polygon

• BNB

• Arbitrum

• Optimism

Traction:

After launching on March 17th, Stargate were aiming to raise $25m - the auction sold out in 1 second!

Stargate now has approximately a TVL (Total Value Locked) of $3.5bn after 12 days of going live.

What can you do with Stargate?

A number of things, such as:

1. Multi-chain transfers: Swap native assets 1:1 across chains by accessing a unified liquidity pool (so you can bridge USDC from Avalanche to Fantom by accessing the unified USDC pool)

2. Liquidity pool:If you add liquidity to Stargate’s omnichain protocol, you’ll earn rewards on every Stargate transfer

3. Yield FarmingLiquidity providers can farm their LP tokens in exchange for STG rewards

Conclusion:

While risks are always involved, I’m bullish on this new innovation in DeFi. Layer Zero seems like the next generation in making it easier to go Bankless.

Creating an easier user experience to interact across different chains will increase the likelihood that we’ll see more users enter the next-gen of DeFi.

Until next time

I hope you enjoyed this week’s edition - I'd love it if you shared it with a friend or two. Got feedback? Reply to this email or tweet at me and let’s chat.

Fahim