Stargate liquidity pools: LP token redemption, withdrawal routes and credit limits

Local withdrawals and cross-chain redemption

V2 pools let liquidity providers recover the pool asset locally or direct the redeemed value toward a supported destination. Local redeem() pays from the pool on the LP token’s chain. redeemSend() burns local LP tokens and initiates delivery elsewhere within the same source-chain call. Both use the caller’s LP balance even when another account receives the underlying value. Each pool’s asset and contract identify the position. A bridge route for an underlying token does not establish that its LP token can travel along that route. The pool’s redemption function converts the LP claim into the supported output.

LP ownership before withdrawal

LP ownership determines which balance the pool can burn, even when an interface displays wallet and farm holdings together. The pool’s lpToken() lookup identifies its LP contract. The account that originally supplied the underlying asset may differ from the LP recipient, because V2 deposit() accepts a receiver.

Tokens held in a wallet

An unstaked wallet balance belongs to a specific LP contract on a specific chain. Token symbols can repeat across deployments. The contract relationship distinguishes the redeemable position from a similarly named token, and a wallet’s display settings do not change the underlying balance.

Tokens held in a farm

A farm holds deposited LP tokens and records the stake beneficiary’s position. Those tokens remain pool claims, but the beneficiary cannot use them for a direct pool burn until it holds them directly. Normal withdrawal from V2 StargateStaking returns LP tokens and updates reward accounting. This precedes pool redemption when the caller needs those tokens for the burn.

Available credit and withdrawal capacity

Local redemption capacity follows the smaller of the caller’s wallet LP balance and the pool’s available local credit. V2 redeemable(owner) caps the reported amount at the pool’s local credit. The result uses local token units. A pool’s total value locked and poolBalance() describe pool accounting; neither directly replaces this account-specific limit.

Credit tracks the liquidity that a withdrawal or connected pathway may consume. The protocol coordinates local credit with credit allocated elsewhere, so a pool can hold assets that it has already committed to remote pathways. Path_InsufficientCredit identifies a credit shortfall. It does not, by itself, establish that the LP tokens disappeared or that the underlying asset lost value.

A capacity read reserves nothing. Subsequent transfers or credit reallocation can invalidate it before the withdrawal transaction executes.

How are V2 LP tokens redeemed locally?

V2 local redemption converts the requested LP amount to supported precision, burns that amount and transfers matching underlying units to the receiver. The pool decreases local credit and its LP-backed accounting in the same successful transaction. Insufficient credit or an insufficient caller balance causes a revert; the contract does not automatically redeem the largest available fraction of an oversized request.

Local redemption has no cross-chain delivery stage. Its completion record consists of the pool’s Redeemed event and the corresponding balance changes.

The event identifies the payer, receiver and normalized amount. The payer’s LP balance decreases, while the receiver obtains the pool asset. A paused pool blocks this operation even when its balance reads show sufficient funds. Source-chain confirmation provides the execution record; merely accepting a wallet prompt does not establish a successful payout.

Combined redemption and destination transfer

Cross-chain redemption combines the LP burn with a destination transfer, while the underlying route determines the receiving asset and credit treatment.

Taxi delivery

V2 redeemSend() accepts taxi mode only. The call spends LP tokens held by its caller and applies the transfer’s output calculation. It returns messaging and token-amount receipts. A source receipt records initiation; destination delivery remains a separate event. Stargate’s delivery policy moved transactions to taxi from October 1, 2026. A destination contract call attached to redemption also has its own execution outcome.

Destination credit and asset form

A destination pool path needs sufficient destination-path credit for its output. Paths configured for Hydra OFT destinations bypass finite pathway-credit caps; the destination mints a representation instead of paying from an underlying-asset pool. The local redeemable() number alone cannot establish capacity or asset identity for every remote route.

Output bounds and messaging quotes

The destination amount follows the route’s fee or reward calculation and shared-decimal precision. At execution, the pool converts minAmountLD to shared precision and reverts if the calculated output falls below that normalized minimum or equals zero. quoteRedeemSend() quotes messaging costs separately. A local credit adjustment can also matter when the combined operation charges a token fee, so destination credit alone does not establish that the caller’s LP balance, local credit and messaging budget satisfy that withdrawal’s requirements.

Shared decimals and LP remainders

Shared-decimal precision sets the smallest nonzero amount that a V2 pool can redeem. Local decimals describe the token’s base units; shared decimals align amounts across connected deployments. Conversion rounds down any unsupported remainder before the LP burn. That dust stays in the LP balance. A full-balance request can leave this LP remainder even when local credit covers the usable amount. Rounding does not itself establish a withdrawal fee. The exact conversion follows the pool’s decimal configuration.

Gas charges and incentive accounting

Withdrawal costs depend on the selected operation, while farm rewards follow the staking position’s separate accounting. Local V2 redemption consumes source-chain gas without a cross-chain messaging step. Combined redemption also needs the messaging fee, and its output can differ because the route charges a token fee or applies a reward. The configured fee library calculates the adjustment, and the pool caps rewards at its available treasury fees. Withdrawals do not share a permanent fee percentage.

Farm rewards have their own token, schedule and funding. An LP balance alone establishes no fixed yield or active reward program. The STG transition changed the historical token economy, so old STG farming descriptions do not establish an ongoing reward entitlement. If the receiver also pays transaction gas in the payout asset, its net balance change includes that gas charge.

V1 withdrawal methods and relayer retirement

V1 withdrawal methods use different accounting and messaging, so V2 call names and one-for-one local amounts do not describe them universally.

The V1 pool’s instantRedeemLocal() method caps redemption against available local delta credit. An oversized request can therefore produce a smaller withdrawal through that method. Its LP conversion depends on total pool liquidity and LP supply. V2’s standard local redemption instead checks the requested normalized amount and reverts when credit is insufficient.

V1 also exposes redeemLocal(), which returns liquidity locally through a cross-chain exchange of messages. The local payout destination does not make that method messaging-free. redeemRemote() targets a remote payout. These methods have different completion conditions from a V2 local burn and transfer.

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LayerZero Labs schedules retirement of its V1 relayer for December 15, 2026. Any V1 exit that uses the retiring relayer depends on that infrastructure. V1 LP holders need to withdraw before the December 15, 2026 pool sunset, or before an earlier cutoff where chain support ends sooner. Stargate’s pool notice announces a temporary messaging pause and planned withdrawal reopening in early October; it does not confirm which pools have reopened. A particular pool’s remaining local delta credit still governs its instant local path.

Moving liquidity between versions requires withdrawing the V1 position and depositing the resulting asset into V2. It creates a different LP position; changing a version selector alone cannot migrate the claim.

Pool claims and Hydra representations

Hydra tokens represent bridged assets backed through core pools; pool-issued LP tokens represent liquidity-provider claims. A Hydra token can return toward a compatible underlying-asset pool through its supported bridge route. That operation burns the representation and releases underlying pool assets. LP redemption instead consumes the pool’s LP claim. The word redemption can describe both actions, while their input token and accounting remain different. A matching ticker does not make those claims interchangeable. LayerZero’s September 25, 2026 support update sets October 23, 2026 as the Stargate support cutoff for Metis, Gravity, Camp and GOAT. It directs Metis pool LPs to withdraw and Hydra holders on the other three chains to bridge to supported pools before that date. The dates can change, and assets left on affected routes risk becoming inaccessible after support ends.