Wormhole Challenges LayerZero in $110M Stargate Acquisition Bid

The Wormhole Foundation has announced its intention to submit a competing bid for the acquisition of the Stargate protocol, directly challenging the LayerZero Foundation’s recent $110 million offer [1]. The LayerZero deal involves a token swap of ZRO for STG and was unveiled last week, sparking immediate discussion among crypto investors and protocol stakeholders [1]. In response, the Wormhole Foundation has stated that the LayerZero bid undervalues Stargate’s current assets, brand, codebase, and team [1]. The foundation emphasized that Stargate, which has $345 million in total value locked (TVL) and over $4 billion in bridge volume in July, deserves a higher offer that reflects its strategic position in the cross-chain space [1].

The Wormhole Foundation has framed its potential acquisition as a way to create a “market-leading force” in cross-chain infrastructure by uniting its broad ecosystem with Stargate’s deep liquidity pools and growing user base [1]. It noted that Stargate’s capabilities in multichain asset transfers align with Wormhole’s vision for a unified, scalable cross-chain environment [1]. The foundation also called for a delay in the ongoing Snapshot vote for the LayerZero acquisition to allow time to finalize its offer and engage further with Stargate’s team [1].

This development highlights the growing competition among cross-chain infrastructure projects for control of key protocols. Both LayerZero and Wormhole are vying to strengthen their market positions by integrating or acquiring Stargate, a protocol that has demonstrated strong growth and user adoption [1]. The LayerZero proposal, while innovative in its use of a token swap, has been criticized for potentially undervaluing Stargate’s future potential [1]. The Wormhole Foundation, by contrast, appears to be leveraging its broader ecosystem and stronger financial position to propose a more compelling alternative [1].

Analysts have noted that the outcome of this acquisition battle could have significant implications for the broader DeFi landscape. The integration of Stargate’s bridging capabilities into either LayerZero or Wormhole could influence the direction of cross-chain innovation, developer activity, and user migration patterns [1]. Given the current lack of detailed financial terms in both bids, the final decision will likely depend on how well each proposal addresses the concerns and expectations of Stargate’s stakeholders [1].

Source:

[1] title: Wormhole Foundation plans to compete with LayerZero for ... (https://cryptobriefing.com/wormhole-stargate-acquisition-bid/)