LayerZero Bids $110M for Stargate in Fixed Token Swap Deal

LayerZero has proposed a $110 million acquisition of Stargate Finance, offering to retire all STG tokens through a fixed 1:0.08634 swap rate with ZRO tokens and dissolving the Stargate DAO to consolidate governance under LayerZero. The move has triggered a strong market reaction, with ZRO surging over 23–26% and STG climbing approximately 16–20% following the announcement [1].

According to the terms outlined by LayerZero, the acquisition price is set at $0.1675 per STG token, based on ZRO’s current price of $1.94 [1]. The Stargate DAO would be dissolved, with any protocol surplus redirected to ZRO buybacks and burns. Long-term locked veSTG and liquid STG would be redeemed at the same rate, with no additional premium for long-term lockups. The proposal includes a 7-day discussion period, followed by a 3-day Snapshot vote requiring at least 1.2 million veSTG participants and 70% "Yes" votes for approval [1].

Supporters view the acquisition as a strategic move to integrate Stargate’s cross-chain liquidity gateway with LayerZero’s messaging infrastructure, creating a closed-loop system that enhances both ecosystems [1]. Stargate, which has processed over $70 billion in cumulative transaction volume, is known for its Hydra mechanism that accelerates liquidity deployment on new chains. Merging it with LayerZero could strengthen ZRO’s value capture by centralizing tokenomics and revenue-sharing models [1].

However, the deal has drawn significant criticism from the Stargate community. Critics argue that the fixed swap rate undervalues Stargate’s long-term revenue potential and fails to acknowledge the contributions of stakers and long-term token holders [1]. Some have labeled the proposal a “cut-price land grab” or a “governance hostage-taking,” emphasizing the absence of an acquisition premium and the rushed timeline [1].

Opponents highlight the broader market context: the U.S. Treasury has projected that the stablecoin market will grow from $250 billion to $3.7 trillion post-GENIUS Act, directly affecting Stargate’s fee-driven revenue model [1]. With transaction velocity expected to rise, critics argue the proposed $110 million valuation locks in a bear-market price and overlooks the asset’s upside potential ahead of a potential altcoin bull run [1].

From a governance perspective, veSTG holders currently enjoy a 50/50 revenue split and can lock tokens for up to four years. The acquisition would eliminate these staking rewards and governance rights without offering any compensation for long-term commitment. The abbreviated vote period has also been criticized as insufficient for meaningful community debate or bid solicitation [1].

While the acquisition could offer a clear, risk-free win for ZRO holders—streamlining governance, increasing buybacks, and boosting brand narrative—it appears to prioritize capital over community interests. Some stakeholders have urged a delay in the deal until the full market impact of the GENIUS Act is realized and suggested exploring bids from other industry players like Coinbase, Robinhood, or Circle to secure a higher valuation [1].

The outcome of this proposal could set a precedent for how governance-driven projects handle large-scale acquisitions, balancing the interests of protocol holders, investors, and the broader ecosystem.

Source: [1] LayerZero Proposes $110M Acquisition of Stargate: Strategic Integration or a Cut-Price Land Grab? A DAO vs. Capital Showdown (https://coinmarketcap.com/community/articles/689abd581f3a5b4dc5e18000/)