LayerZero Finalizes $110M Stargate Acquisition With 95% DAO Approval

LayerZero has completed the $110 million acquisition of Stargate, a cross-chain bridge protocol, following a decisive vote by Stargate’s decentralized autonomous organization (DAO). The proposal received overwhelming support, with 94.76% to 95% of Stargate DAO members approving the deal [6]. This transaction effectively dissolves the Stargate DAO and merges its governance into LayerZero, with all $STG tokens converted to LayerZero’s $ZRO at a rate of 1:0.08634 [4]. The transition marks a pivotal shift in the DeFi governance landscape, consolidating LayerZero’s leadership in blockchain interoperability [2].

The acquisition was the result of a competitive bidding process, with LayerZero ultimately outpacing rival protocols such as Wormhole, which had submitted a $120 million cash offer [6]. The Axelar Foundation and others also expressed interest in submitting alternative bids should the Stargate community delay its decision [7]. To secure the deal, LayerZero offered a revised structure that included maintaining revenue-sharing benefits for veSTG holders for six months post-approval and redirecting remaining profits toward $ZRO buybacks and burns [8]. This adjustment demonstrated a strategic effort to align incentives and ensure broad-based support from Stargate’s community [9].

The deal is expected to significantly enhance LayerZero’s cross-chain infrastructure by integrating Stargate’s liquidity and user base into a broader suite of financial tools, including swaps and vaults. The acquisition strengthens LayerZero’s position as a central hub for cross-chain value transfer and reinforces its vision of unifying blockchain ecosystems [11].

Market reactions have been mixed but generally positive. In the 24 hours following the announcement, $STG rose 1%, while $ZRO gained 0.8% [12]. Both tokens experienced a surge in trading volume, exceeding 300% of their 24-hour averages, indicating heightened trader interest and potential volatility [13]. Analysts suggest that the deal could influence liquidity provider strategies and governance models within the DeFi space, reflecting a broader shift toward centralized operational control following decentralization.

The transaction underscores a growing trend of consolidation among interoperability protocols, driven by the need to scale operations and maintain relevance amid fierce competition. With Wormhole’s unsuccessful bid and other entities showing interest, the DeFi market is witnessing increased strategic maneuvering to capture dominant positions in cross-chain infrastructure [6]. The LayerZero-Stargate merger may set a precedent for future acquisitions, highlighting the power of DAOs in shaping major financial decisions [1].

Source:

[1] AInvest - LayerZero Finalizes $110M Stargate Acquisition in Major Defi Deal - (https://www.ainvest.com/news/layerzero-finalizes-110m-stargate-acquisition-major-defi-deal-2508/)

[2] CoinCentral - LayerZero Beats Wormhole in $110M Stargate Acquisition Battle - (https://coincentral.com/layerzero-beats-wormhole-in-110m-stargate-acquisition-battle/)

[4] AInvest - Stargate DAO Chooses LayerZero Over Cash in $120M Cross-Chain Power Play - (https://www.ainvest.com/news/stargate-dao-chooses-layerzero-cash-120m-cross-chain-power-play-2508/)

[6] Coinfomania - LayerZero Stargate Acquisition Wins $110M Deal Backed by 95% Approval - (https://coinfomania.com/layerzero-stargate-acquisition-110m/)

[7] Invezz - Stargate DAO Approves LayerZero's STG Acquisition Deal - (https://invezz.com/news/2025/08/25/starget-dao-approves-layerzeros-stg-acquisition-deal/)