Hello earthlings!

It's no longer news about the first omnichain Fungible token: Stargate finance, which is built on LayerZero protocol. The Omnichain Fungible token (OFT) title, was derived from its mobility on chain i.e.  the ability of $STG to move freely between all chains Layer zero exists.

This was made possible by solving the Bridging Trilemma, via the Delta (Δ) algorithm.

Ryan Zarick, co-founder and CTO of LayerZero outlined in indepth in the Bridging Trilemma.

Introducing the Delta (Δ) algorithm.

The Delta (Δ)  algorithm is a novel resource balancing algorithm that enables unified native asset pools on all chains while also providing Instant Guaranteed Finality.

Delta (Δ) algorithm ticked all three boxes in the Bridging Trilemma and proved to be the first algorithm with attractive features capable of an ideal bridge.

The effect of this solution encompasses many on-chain activities. This is a modification to the lock + mint + Redeem  mechanism of synthetic assets which can induce fragmented liquidity.

With bridging trilemma solved, we can now simultaneously have deep pools of native assets tied to all chains, creating orders of magnitude greater capital efficiency. LPs will be able to stake into a singled-sided asset pool with no impermanent loss and collect fees from all incoming transfers regardless of their source chain. This would save users the time and fees needed to swap out undesirable synthetics on the destination chain or have a scenario where a transfer fails due to state change.

The fundamental security limit of bridges.

Generally, there are different perspectives to an ideal bridge either via “multi-chain” or “cross-chain” but both are limited to some fundamental securities which have proven to be honeypots for exploits.

These different perspectives steered up some healthy argument as Vitalik, co-founder of Ethereum blockchain remains optimistic about a multi-chain blockchain ecosystem rather than cross-chain applications.

However, instead of fighting over influence on the mutual goal which is “The fundamental security”. We can as well derive means/protocols to mitigate the risks to the barest minimum.

Following his argument tweet, he also acknowledged the quality of cross-rollup apps within “one zone of sovereignty”. Noting that, it is also a limit to the "modular blockchains" vision. The key word “one zone of sovereignty”, Could this be Stargate on LayerZero ?

What if we can limit these risks, by getting the roll-ups within one zone of sovereignty like he said. Seems like a blockchain myth, How’s that possible ?

Think of an interoperable Omnichain protocol, leveraging on the security properties of Chainlink and Band oracles. Yes, that's Layer zero; the skeleton framework of Stargate. Ryan Zarick, explained how the interoperability works in his post on LayerZero- An Omnichain Interoperability Protocol

Meanwhile, Vitalik’s perspective on multichain over cross-chain focuses on wrapped assets as the solution. The premises of his argument relies on “the limits to the security of bridges that hop across multiple zones of sovereignty”.

Mechanism of wrapped assets Vs Stargate cross-chain

There is no doubt that latency has proven to be a function of security and as such, the latent period shouldn’t be subjected to any sort of risk**.** Meanwhile, one of the issues of a wrapped asset being the solution- is the risk on the duration of the transaction.

To explain this clearly, let's zoom out to the user side: A user with $1000 Eth on its  native chain A wants the same value of ETH on another chain B.

Using Stargate: The user deposits hid preferred ETH value on chain A and gets out the same equivalent value of Eth in his preferred currency on his preferred chain. Everything happens immediately, Bridge did its job and you have your cryptocurrency on your desired chain.

In a case of an uncertainty or dilemma where stargate is subjected to an exploit and probably goes to zero, You're all out in safe hands.

Using a wrapped asset : The user locks up the $1000 Eth on chain A and mints the equivalent value of synthetic Eth value on chain B. This transaction is not yet complete as long as the value of ETH on chain B is subjected to the risk of its equivalent value of Eth on chain A.

In a case of an uncertainty or dilemma where the original ETH on chain A is removed, then your Synthetic Eth is now worthless.

Wrapped assets and Smart contract risk.

Wrapped assets works on a (lock + mint + redeem) mechanism and there are multiple angles of attack on smart contracts with this model. This could be  local smart contract risks, which may include poorly written codes that are vulnerable to exploits and hackers.

Local smart contract risks can be controlled yet seem inevitable for every smart-contracts.

Several Audits can examine and do the best of their job but then there are other two angles of outstanding risk which are inescapable, these risks could be derived from the validation mechanism and fraudulent messages. This can be evident in the recent hack events, where a hacker stuffs in some sort of false code(fraudulent messages) aiming at either  tricking the source contract to deliver false messages to the destination chain OR by directly tricking the destination chain to automate messages that aren't from the source code.

LayerZero has always proven to be ahead of the emerging risks with the advent of “stop the hack" protocol known as Pre-crime.

Introducing Pre-crime

Transport layers are really innocent of the exploits, as most of the catastrophes are smart contract related and has nothing to do with transport layer. Yet these transport layers deliver the final fatality.

End of worries, with the launch Pre-crime we could prevent the final blow from being delivered.

Pre-Crime initiates the ability for a relayer to stop a hack before it happens.  This is achieved by forking the destination blockchain before delivering the message and running the transaction locally. Pre-Crime also involves the authentication to check the state of the blockchain in relation to the other connected blockchains to confirm no malicious action occurred.

You can read more about the additional layer of security : Pre-crime.

This is just one of many steps LayerZero is taking to ensure the security of the omnichain future.

The ultimate goal of Stargate is to mitigate the risks of cross-chain swaps to the barest minimum.

In pursuit of this ultimate goal, several other sub-goals have been attained such as : Optimized volume and fees for swaps, transfers and LP. $STG, the omnichain fungible token is the rocket science behind all these.

What’s Next

There's a lot going on, such as the Pre-crime, DEX integrations etc.

The Stargate team also cares about the community and the growth of Stargate protocol. That's why DAO governance is in place. It is vital to bring all forces together to build a strong protocol.

To ensure the efficacy of the governance, the community decided to use the Common wealth platform as the Forum that Stargate will be using for Proposals and Governance.

Bright minds can now come together, discuss and draft proposals. Everyone is free to chip in their ideas at Commonwealth Stargate token Proposals.

More on Stargate soon™️

Communities and Resources:

Learn more about Stargate launch.

Explore in details about the Bridging Trilemma.

Dive into the in-depth details of the additional security layer: Pre-crime.

Learn more about the Omnichain interoperability protocol-LayerZero.

Join Stargate Telegram community.

Join our Stargate Discord.