Feb 27, 2023

Stargate

Introduction

Cross-chain bridges are a relatively new technology in the DeFi space, allowing for the transfer of assets between different blockchain networks. One of the most well-known cross-chain bridge is Stargate, which is designed to facilitate the seamless transfer of assets between Ethereum, BNB Smart Chain, Polygon and other networks. This article will explore the concept of cross-chain bridges and examine the benefits and drawbacks of this technology, including its security features.

Source

About Bridge

Stargate claims to be the first project using technology to solve the “bridging trilemma,” which is composed of three bridge features – instant guaranteed finality (users can trust that the transfer will be successful), native assets (transfers are made in native assets and not in wrapped assets) and unified liquidity (there is shared access to a single liquidity pool across multiple chains). Previously, bridges had to sacrifice one of these features in order to work properly, but Stargate is able to overcome this issue and is therefore quite unique.

Miro Medium

Mostly thanks to the newly developed Delta algorithm, Stargate allows all the features shown above to be used by balancing the amount of liquidity while still guaranteeing instant guaranteed finality. Basically it allows users to swap 1:1 native assets inside the supported blockchains. All this comes with a relatively small fee, which starts at 0.1% per transaction. The bridge also offers the possibility of investing because of the liquidity it needs. Using the bridge is quite simple; you just need to connect your wallet, choose which tokens and networks you want to transfer from and to, enter the total amount, and approve the transaction.

Source

Perhaps you are wondering about security -  is Stargate safe? The answer is yes - the whole project is considered to be safe by the crypto community. It has been audited by three independent companies, and there is no known case of the bridge being hacked. The developers also have the highest bug bounty program, which can lead up to a reward of 15 million USD.  Furthermore, the developers are working on a “pre-crime” feature, which is supposed to enable relayers to stop hacks before they happen.

Pros and Cons

Pros

  • Bridging trilemma solved
  • Low fees
  • Great security features

Cons

  • Despite the high level of security, the bridge could still be the target of successful attack
  • Fees can change a lot in relation to other circumstances

Tips from an Analyst

  • Do your research - before using any cross-chain bridge, it is important to thoroughly research the platform to ensure that it is reputable, secure, and meets your needs; this includes reading reviews and examining the platform's security protocols
  • Consider fees - cross-chain bridges typically charge fees for transferring assets between different blockchain networks; be sure to compare fees between different platforms and consider how this may impact your overall investment strategy
  • Keep an eye on security - cross-chain bridges are designed to be secure, but it is still important to monitor your assets and transactions to ensure that they are safe
  • Monitor developments - the DeFi space is constantly evolving, and new developments in cross-chain bridges and other technologies may impact your investment strategy; stay informed and be prepared to adapt as the industry evolves

Personal opinion

I personally believe that LayerZero, which is the team behind the whole project, is doing a great job. They have provided us with a unique bridge which is reliable and safe. Transferring your assets through Stargate is one of the safest options possible right now. I am not the only one who thinks Stargate has the potential to play a major role in the future of DeFi. With the growing popularity of decentralized finance, the need for seamless and secure transfer of assets between different blockchain networks will only continue to increase.

Analyst

Matěj Procházka

About Analyst

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