LayerZero Acquires Stargate in $120M DAO-Driven Deal

LayerZero Labs has finalized the acquisition of Stargate Finance following a decisive 94.7% approval from the Stargate DAO vote. The deal, valued between $120 million and $138 million, outbid competing offers from firms such as Wormhole, Axelar, and Across, solidifying LayerZero’s dominance in the cross-chain infrastructure space [5]. Under the terms of the acquisition, STG token holders will exchange their tokens for LayerZero’s ZRO at a 1:0.08634 ratio, effectively dissolving the Stargate DAO and transferring governance to LayerZero [1].

The acquisition marks a strategic consolidation of two major players in the cross-chain ecosystem. Stargate, originally spun off by LayerZero in 2021, is now returning under its umbrella. CEO Bryan Pellegrino emphasized the move as a step toward enhancing value transfer across chains and positioning Stargate as a revenue-generating asset within LayerZero’s ecosystem [2]. The integration will involve migrating Stargate’s total value locked (TVL) and liquidity pools into LayerZero’s operations, aligning incentives under the ZRO token framework [4].

Competitors had previously entered the fray, with Wormhole submitting a $120 million USDC offer and Axelar expressing interest in developing a competing proposal. However, the speed of LayerZero’s revised proposal secured the deal before rival bids could materialize [3]. Hart Lambur, co-founder of Across, criticized the rapid timeline, stating, “Rushing benefits no one,” highlighting the tension between market agility and thorough due diligence [3].

The transition includes a six-month revenue-sharing arrangement for veSTG holders, who will receive 50% of Stargate’s protocol revenue before profits are redirected to ZRO buybacks and token burns [1]. This mechanism aims to smooth the transition for existing stakeholders while reinforcing the long-term value of ZRO. The move also signals a broader shift in token governance dynamics, with Stargate’s ecosystem now fully integrated under LayerZero’s governance model.

Market reactions to the acquisition have been cautiously optimistic, with both STG and ZRO tokens experiencing modest price gains in the days following the announcement. STG rose 1%, while ZRO climbed 0.8%. Trading volume for both tokens surged by over 300%, indicating heightened interest among traders and investors monitoring the cross-chain sector [5]. The acquisition is considered one of the largest DAO-driven buyouts in the crypto space, with few precedents in terms of scale and competitive dynamics.

The consolidation of Stargate under LayerZero’s infrastructure is expected to have broader implications for cross-chain finance. With enhanced liquidity and interoperability tools, the merged entity could serve as a central hub for cross-chain asset transfers, further accelerating the adoption of tokenized assets across multiple blockchains. The deal sets a benchmark for future DeFi consolidations and underscores the importance of governance alignment in decentralized ecosystems [4].

Source:

[1] title: Starget DAO approves LayerZero's STG acquisition deal

url: https://invezz.com/news/2025/08/25/starget-dao-approves-layerzeros-stg-acquisition-deal/

[2] title: LayerZero Finalizes $110M Stargate Acquisition in Major ...

url: https://www.ainvest.com/news/layerzero-finalizes-110m-stargate-acquisition-major-defi-deal-2508/

[3] title: LayerZero Beats Wormhole in $110M Stargate Acquisition ...

url: https://coincentral.com/layerzero-beats-wormhole-in-110m-stargate-acquisition-battle/

[4] title: LayerZero wins $110M Stargate acquisition deal

url: https://crypto.news/layerzero-110m-stargate-acquisition-stg-vote-2025/

[5] title: Layerzero acquires Stargate with 94% DAO Approval

url: https://www.coingabbar.com/en/crypto-currency-news/layerzero-wins-stargate-takeover-with-94-dao-approval?srsltid=AfmBOoodYNvOE-ihba7P79bAQFnhiT1X2I3lvEXFB7dLN8IH5x0T60GX