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We propose intra-domain multicast-based mobility as a solution for IP mobility. Our architecture addresses problems with existing IP mobility proposals; mainly scalability and handoff performance. In our scheme mobility proxies are used to allocate per-domain multicast addresses to mobiles for use in micro mobility. State aggregation is studied as an essential element to improve scalability of our approach. We introduce a simple, yet very efficient aggregation algorithm, based on bitwise lossy aggregation. An important result obtained indicates that state tends to be concentrated in less than 20% of the nodes and that our scheme is extremely efficient in reducing the state in those nodes. We show that our scheme achieves much higher aggregation gain than conventional prefix-based aggregation.