StargateDAO Capital Allocation to Intent Based Systems

Introduction

The Stargate protocol has emerged as the most successful bridge in DeFi, processing over $5.5B a month at peak during 2025. Its success is largely attributed to its liquidity pool-based architecture and Hydra, together ensuring efficient and seamless cross-chain asset transfers.

However, the market has also indicated demand for alternative bridge architectures that prioritise speed over decentralisation. These models typically rely on centralised liquidity providers, faster execution mechanisms, and other trade-offs that sacrifice some aspects of decentralisation for faster settlement.

One of the biggest challenges intent-based solutions face is the cost and speed of rebalancing liquidity. Many protocols struggle with efficiently moving liquidity across chains while maintaining competitive costs for users. Some solutions involve paying LPs to rebalance manually, utilising centralised exchanges like Binance, or relying on third-party market makers.

Stargate could hold a unique advantage in this system due to its ability to rebalance liquidity at low cost through Stargate V2 (where fees are simply accrued back to the DAO). This built-in mechanism significantly reduces operational costs of rebalancing, enhancing profitability and making it a competitive solution for cross-chain liquidity movement. By extending its liquidity pool-based architecture with an intents-based system, Stargate can offer both capital-efficient transfer of size and fast, near-instant cross-chain swaps, positioning it as the default platform for bridging value across multiple chains.

Proposal

StargateDAO should allocate up to $20m of its treasury to intents-based bridging systems to capitalise on the abovementioned advantages. By leveraging Protocol Owned Liquidity, a Stargate funded solver can potentially offer larger size and better spreads. The solver will hold the relevant inventory based on market demand and opportunities to outperform the competitors. Stargate should integrate any funded system directly into its own front-end.

To maintain transparency, the Stargate Foundation will provide quarterly updates on the movement of this capital, including detailed reports on returns and performance.

Execution

StargateDAO would allocate $20m of inventory to intent-based systems. The inventory in the form of USDC, and ETH, will be withdrawn from Stargate’s pools (as per portfolio consolidation proposal).

The capital can be withdrawn back to the treasury at any point through a subsequent proposal.