LayerZero Buys Stargate for $110M in ZRO Token Swap

The LayerZero Foundation has proposed a $110 million acquisition of the Stargate cross-chain bridging protocol, triggering significant price movements in both ZRO and STG tokens. Under the deal, each STG token will be exchanged for 0.08634 ZRO, effectively consolidating Stargate’s decentralized autonomous organization (DAO) under LayerZero’s governance framework [3]. The proposal, announced on Stargate’s forum, aims to streamline operations and unify the two platforms into a more robust interoperability solution [1].

Stargate, which was initially launched by LayerZero in 2022, allows users to transfer assets across blockchains using liquidity pools, a method designed to reduce reliance on traditional blockchain bridges, which have historically been vulnerable to security breaches. The acquisition would bring Stargate back under LayerZero’s control, enabling a unified vision for cross-chain infrastructure [3].

The announcement has already driven a notable price surge for both tokens. STG increased by about 16.5% in 24 hours, trading at just over 19 cents, while ZRO gained over 23% to $2.44 [3]. Over the past seven days, ZRO has risen nearly 40%, outperforming many other tokens in the cryptocurrency market [3]. However, both tokens remain far below their historical peaks—ZRO is down 67% from its December high of $7.47, and STG has fallen more than 95% from its mid-2022 peak of $4.14 [3].

LayerZero co-founder and CEO Bryan Pellegrino has called the proposal a step toward a “single unified direction,” emphasizing the benefits of merging the two platforms into one cohesive stack [3]. He stated the move would allow Stargate to execute its roadmap more efficiently and provide STG holders with a “more liquid token.” However, the response from the Stargate community has been mixed. While some acknowledge the logistical benefits of managing a single token, others argue the offer undervalues Stargate’s potential and current revenue generation [3]. One holder noted that the lack of staking opportunities for ZRO represents a significant downside, while others called for a more favorable swap rate, such as a 1:1 exchange [3].

The proposal will remain open for community feedback for seven days before Stargate’s DAO votes on its approval [3]. If accepted, the STG token will be retired, and all holders will receive ZRO at the stated rate. Analysts have pointed out that while the deal could enhance LayerZero’s market position and accelerate its development timeline, the fairness of the valuation remains a point of contention [9].

The acquisition is part of a broader trend in the DeFi and cross-chain infrastructure space, where consolidation is becoming increasingly common as projects seek to streamline operations and improve scalability. With growing competition from platforms like Wormhole, Synapse, and Axelar, LayerZero’s integration of Stargate could position it for stronger growth in the cross-chain bridging market [11]. If successful, the deal may also set a precedent for how cross-chain protocols manage governance and token economics in an evolving regulatory and competitive landscape [3].

Source:

[1] LayerZero Acquires Stargate for $110M in ZRO Token ... - AInvest (https://www.ainvest.com/news/layerzero-acquires-stargate-110m-zro-token-swap-boosting-stg-zro-12-15-percent-2508/)

[2] LayerZero Targets Stargate: Can ZRO Save STG Price in ... - 99Bitcoins (https://99bitcoins.com/news/presales/layerzero-110m-stargate-acquisition-proposal-can-zro-token-swap-rescue-stg-price/)

[3] LayerZero, Stargate tokens jump on $110M acquisition plan - Cointelegraph (https://cointelegraph.com/news/layerzero-stargate-tokens-rise-110m-acquisition-proposal)

[4] LayerZero Foundation acquisition of Stargate (STG) - General - Discourse (https://stargate.discourse.group/t/layerzero-foundation-acquisition-of-stargate-stg/682)

[5] LayerZero Acquires Stargate for $110M in Centralized Push ZRO Up 22% Following $110M Stargate Buyout Proposal - AInvest (https://www.ainvest.com/news/ethereum-news-today-layerzero-acquires-stargate-110m-centralized-push-zro-22-110m-stargate-buyout-proposal-2508/)