LayerZero Proposes $110M Buyout of Stargate Amid ZRO 23% Surge and STG 16.5% Gain

LayerZero Foundation, the entity behind the cross-blockchain communication protocol LayerZero, has announced a $110 million proposal to acquire Stargate, a cross-chain token bridge protocol that it originally developed in 2022. Under the proposal, Stargate’s native token (STG) would be swapped for LayerZero’s ZRO token at a rate of 1 STG for 0.08634 ZRO. If approved by Stargate’s decentralized autonomous organization (DAO), the acquisition would effectively bring Stargate back under LayerZero’s control and dissolve its independent governance structure[1].

The news has driven significant price action in both tokens. In the 24 hours following the announcement, ZRO rose over 23%, reaching $2.44, while STG gained approximately 16.5%, trading at just over 19 cents. Over the past seven days, ZRO has rallied nearly 40%[2]. Despite the positive market reaction, the valuation of STG under the proposed swap is below its current trading price, with the offer valuing it at around $0.1675 versus its $0.183 level. This has led to criticism from some STG holders, who argue that the offer fails to reflect Stargate’s revenue-generating potential and existing value[3].

LayerZero co-founder and CEO Bryan Pellegrino has defended the move, calling it a strategic step to “move faster” and unify Stargate’s roadmap under a single governance framework. The acquisition is expected to consolidate Stargate’s $70 billion in historical transfer volume and user base into LayerZero’s ecosystem, potentially accelerating its growth in the broader cross-chain interoperability space[4].

However, concerns have emerged regarding the implications for STG holders. The proposal would redirect approximately $939,000 in quarterly bridge revenue from STG staking rewards to ZRO buybacks, effectively removing the ability to earn yield from STG tokens. Critics argue that this shift does not adequately reward early Stargate participants, with some suggesting a more equitable 1:1 token swap would better reflect the project’s contributions and future potential[5].

The acquisition aligns with a broader trend of consolidation in the cross-chain infrastructure space. Other major projects, including Wormhole, Synapse, and Axelar, are also vying for market dominance. By absorbing Stargate, LayerZero aims to strengthen its position in the rapidly evolving landscape. Historical precedents, such as Binance’s acquisition of Trust Wallet and FTX’s purchase of Blockfolio, suggest that such moves can lead to increased liquidity and user adoption for the parent token[6].

The Stargate DAO will have seven days to comment on the proposal before a vote is held. Approval requires a 70% supermajority. If the deal passes, the STG token will be retired, and all revenue and governance will be transferred to ZRO. Whether this will be enough to sway the community depends largely on the perceived long-term value of integration with LayerZero and the potential upside for ZRO[7].

Sources:

[1] MEXC: [https://www.mexc.com/news/layerzero-proposes-110m-buyout-of-stargate-amid-stg-token-struggle/64571](https://www.mexc.com/news/layerzero-proposes-110m-buyout-of-stargate-amid-stg-token-struggle/64571)

[2] AInvest: [https://www.ainvest.com/news/layerzero-acquires-stargate-110m-zro-token-swap-boosting-stg-zro-12-15-percent-2508/](https://www.ainvest.com/news/layerzero-acquires-stargate-110m-zro-token-swap-boosting-stg-zro-12-15-percent-2508/)

[3] 99Bitcoins: [https://99bitcoins.com/news/presales/layerzero-110m-stargate-acquisition-proposal-can-zro-token-swap-rescue-stg-price/](https://99bitcoins.com/news/presales/layerzero-110m-stargate-acquisition-proposal-can-zro-token-swap-rescue-stg-price/)

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

[5] Bitget: [https://www.bitget.com/news/detail/12560604905356](https://www.bitget.com/news/detail/12560604905356)

[6] AInvest: [https://www.ainvest.com/news/ethereum-news-today-layerzero-acquires-stargate-110m-centralized-push-zro-22-110m-stargate-buyout-proposal-2508/](https://www.ainvest.com/news/ethereum-news-today-layerzero-acquires-stargate-110m-centralized-push-zro-22-110m-stargate-buyout-proposal-2508/)