Stargate Finance: Unified Liquidity Pools for Seamless Interop on Gelato Raas
Gelato Team
•
May 27, 2025
This article is part of the Gelato RaaS Interop Series. Read more:
TL;DR
Unified Liquidity Pools: Stargate delivers core assets with instant guaranteed finality and unified liquidity.
Transaction batching reduces costs: Stargate allows user funds to “take the bus" to share messaging costs.
AI-driven liquidity: The AI Planning Module dynamically redistributes credits across pathways based on volume patterns.
L2 expansion: Support for 50+ chains including Arbitrum, Optimism, Scroll and Ink.
Protocol-owned liquidity ensures sustainability: By generating fees and maintaining liquidity, Stargate reduces dependence on new incentives.
New chains can tap into unified pools: Gelato RaaS chains can access Stargate's unified pools.
Stargate Hydra extends support for USDC, USDT, and WETH to chains without native token support from day one, using a pre-native and compliant issuance standard.
Bridged USDC Standard unlocks a unified stablecoin standard for new ecosystems.
Massive transaction capacity: Support for $100M+ single transactions with guaranteed execution.
Market dominance: Stargate frontend processes ~$6B monthly volume while protocol handles $2-3B directly.
Home of all OFTs: Serves as the primary interface for major LayerZero OFT assets including USDT0, WBTC, USDE, and PayPal USD.
Since its launch in 2022, Stargate has facilitated over $60 billion in cross-chain transfers and maintained a consistently strong TVL above $500 million. With over 3.3 million lifetime users, Stargate has established itself as the foundational unified liquidity layer connecting the Omnichain.
Stargate processes approximately $2-3 billion in direct protocol volume monthly, while its frontend interface handles an additional $3+ billion serving as the primary gateway for major LayerZero Omnichain Fungible Tokens including USDT0, WBTC, USDE, and PayPal USD.
How Stargate Works: Architecture and Key Components
Unlike first-generation bridges that forced users through counterintuitive swaps and exposed them to wrapped token risks, Stargate's architecture revolves around unified liquidity pools that connect over 50 chains through LayerZero's messaging protocol. Stargate delivers assets with instant guaranteed finality through these pools so users have a frictionless experience.
Dual-Layer Architecture
Stargate operates as two distinct LayerZero applications built on top of each other:
Token Messaging Layer: This is where liquidity pools exist and actual token transfers occur.
Credit Messaging Layer: Stargate's own accounting system that ensures every pool knows the state of all other pools in real-time.
Every transaction carries two messages: a token message (“Release X tokens to user Y") and a credit message ("Update accounting state - Base now has X less credits").
If you can submit a transaction on the source chain, it will always be executed on the destination chain. This is how Stargate is able to provide guaranteed finality. The credit verification happens before transaction submission, eliminating race conditions that plagued earlier bridge designs.
How Unified Pools Work
With traditional bridges, each chain pair requires its own dedicated liquidity pool. Stargate instead uses a unified liquidity model where a single pool per supported asset (like USDC, USDT, or ETH) exists on each chain in the network.
These pools are managed through an off-chain entity that tracks inflows and outflows across chains and dynamically manages credits to adjust their distribution across pathways based on volume patterns and user behavior.
Example of the System in Action
Every pool on Stargate knows the state of every other pool. Suppose Ethereum has $1M USDC connected to Arbitrum and Base. The system could allocate 500K credits to each chain. If a user on Base wants to bridge $700K to Ethereum but only has 500K credits available, the system initiates a credit transfer where Arbitrum sends 200K credits to Base. The total credits remain $1M, preserving balance and preventing race conditions.
AI Planning Module (AIPM)
The AIPM optimizes credit distribution, fee structures, and rebate incentives to balance liquidity. For example, if a new yield opportunity causes a surge in Ethereum → Arbitrum transfers, AIPM can reallocate credits, adjust fees, or incentivize reverse transfers. It operates within strict permissions, only modifying the credit system without touching user funds.
Bus vs. Taxi: Transaction Batching
Bus Mode: Multiple users share messaging costs by grouping their transfers into a single batch. Costs drop significantly, with slightly longer wait times.
Taxi Mode: Immediate execution at higher cost. Bus Mode reduces fees by up to 95% compared to traditional bridges, while still delivering sub-10 second execution on popular routes.
Stargate Hydra: Liquidity-as-a-Service
Hydra extends token liquidity (USDC, USDT, WETH) to chains without native support. Assets are locked in Stargate pools and equivalent Hydra tokens are minted on the destination. These tokens are compliant with Circle’s Bridged USDC Standard, ensuring seamless upgrades to native USDC when available.
The Hydra Capital Accumulation Effect
All Hydra deposits increase Stargate’s liquidity permanently until bridged out, creating a flywheel where bridging strengthens protocol liquidity and reduces the need for external incentives.
Stargate's Role as "Home of All OFTs"
Stargate also serves as the primary frontend for LayerZero’s OFTs, handling an additional $3B+ monthly volume. Assets include USDT0, WBTC, USDE, and PayPal USD, positioning Stargate as both liquidity protocol and distribution gateway for omnichain assets.
Protocol Locked Liquidity
Assets locked in pools contribute to Protocol Locked Liquidity (PLL), boosting capital efficiency and supporting larger transfers with minimal slippage. PLL has historically generated 4-8% APR on ETH and stablecoins.
Security and Trust Considerations
Stargate relies on LayerZero’s Decentralized Verifier Networks (DVNs) and Executors. While users must trust the implementation and DAO governance, Stargate’s model balances decentralization with performance. The AI Planning Module adds coordination but cannot directly touch user funds.
How Instant Guaranteed Finality Is Ensured
Before processing, Stargate confirms credits on the destination chain. Credits represent claims on actual liquidity, and once verified, the source transaction is finalized. This ensures if a transaction is confirmed on the source chain, it will always settle on the destination chain.
Stargate for Gelato RaaS Chains
Day-One Liquidity and Connectivity
Hydra enables new Gelato RaaS chains to tap Stargate pools immediately, bypassing cold-start liquidity problems.
Self-Sustaining Liquidity Model
Every bridged asset adds to PLL, reducing the need for emissions and creating compounding liquidity depth.
Flexible Asset Strategies
Hydra assets comply with Circle’s standards, easing eventual migration to native assets. Berachain’s launch via Boyco demonstrated Hydra’s power, onboarding $270M USDC and 93,000 WETH at launch.
Market Position and Competition
Stargate maintains a TVL above $500M and ranks consistently in the top 3 for bridge volume. Its unified pools and guaranteed finality set it apart from earlier bridges.
Comparison with Intent-Based Bridges
Stargate uses liquidity pools and LayerZero messaging for immediate finality, while Across relies on solvers to front liquidity. Stargate supports massive transactions ($100M+) with less capital locked compared to solver-based models.
Deploy your Gelato RaaS Chain with Stargate Support
Gelato integrates Stargate into its RaaS, enabling seamless access to cross-chain liquidity pools.
Ready to deploy your own chain with built-in Stargate support? Visit raas.gelato.cloud today to explore your options and join the growing ecosystem of interoperable blockchains.