How does Allbridge Core work?

Allbridge Core enables native stablecoin transfers between blockchains by connecting independent liquidity pools through a virtual stable-swap mechanism. Instead of minting wrapped tokens or relying on custodial accounts, the protocol uses smart contracts on every supported chain to hold liquidity, process swaps, and coordinate cross-chain messages.

At the center of the system is a virtual asset called vUsd. It acts as the common reference point between all pools and allows the protocol to apply stable-swap mathematics across multiple blockchains. This lets users transfer stablecoins from one chain to another while the underlying liquidity stays within the protocol’s non-custodial smart contracts.

The following sections break down each part of the system in more detail.

Single-Asset Pools with Virtual Balances

Each supported chain has a single-token liquidity pool—either USDT or USDC depending on the chain. Internally, however, every pool also maintains a balance of vUsd. When liquidity is added, the pool splits it into two parts: the deposited stablecoin and an equivalent amount of vUsd. This creates a virtual two-asset pair that behaves like a stable-swap pool, even though only one token exists on-chain.

This design allows every pool to independently use an invariant-based pricing model without requiring two real assets on each chain.

Stable-Swap Logic Across Multiple Blockchains

The pool uses stable-swap mechanics to determine the exchange rate between the stablecoin and vUsd. When a user initiates a transfer:

1. The transferred stablecoin is added to the source pool.

2. The pool performs a stable-swap from the stablecoin into vUsd.

3. The amount of vUsd obtained becomes the value carried across chains.

On the destination chain, the pool performs the reverse operation—swapping vUsd into the local stablecoin and releasing it to the user.

Because each pool tracks both real and virtual balances, the invariant remains consistent across all pools. When liquidity shifts from one chain to another, prices adjust automatically: pools with excess stablecoins become more expensive to deposit to, and pools with shortages become cheaper. This naturally creates arbitrage incentives that help restore balance.

Cross-Chain Messaging

To complete a transfer, Allbridge Core passes a message from the source chain to the destination containing:

• the amount of vUsd sent from the source

• the target chain and token

• recipient address and optional extra gas amount

Smart contracts on the destination chain receive the message and finalize the swap back to stablecoins. This mechanism ensures that transfers always complete based on the state of the pools, without custodial intermediaries.

Some routes additionally support alternative transfer methods, such as CCTP or LayerZero OFT, for assets with official native bridging standards. When available, these options can be selected directly in the UI.

Keeping Pools Balanced

Since each transfer shifts liquidity from one chain to another, pools can become imbalanced over time. Allbridge Core’s pricing automatically reflects this. A pool running low on stablecoins becomes more expensive to withdraw from in terms of vUsd, and a pool with excess stablecoins becomes cheaper. These price differences create arbitrage opportunities for traders, which in turn move liquidity back toward equilibrium.

In practice, these balance shifts mean that the amount a user receives may differ slightly from the nominal value of the transfer. This difference comes from the pool’s current state and the stable-swap calculation—it is not a protocol fee. When arbitrage activity brings pools closer to balance, rates return toward neutral levels. This mechanism allows Allbridge Core to operate across many chains without manual rebalancing by the protocol itself.

This continuous rebalancing is a key part of the design and ensures that liquidity remains available for both regular users and liquidity providers.

Liquidity Provider Rewards

Liquidity providers earn 80% of all fees collected by the swap pools.

Rewards accrue automatically with every transaction and are distributed continuously. There are no lockups—LPs may withdraw their liquidity at any time.

Because rewards depend on actual volume rather than fixed emissions, yields vary between pools. The Allbridge Core interface includes historical charts so providers can evaluate pool performance and volatility.

You can check live data and deposit liquidity into Allbridge Core here: https://core.allbridge.io/pools.