LayerZero Proposes $110M Stargate Buyback and Token Swap Plan

Generated by AI AgentCoin World
Tuesday, Aug 12, 2025 1:26 am ET1min read
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Aime RobotAime Summary

- LayerZero Foundation proposes $110M buyback to replace Stargate’s STG tokens with ZRO at 0.08634 rate.

- The plan aims to consolidate governance under LayerZero, streamline operations, and boost cross-chain interoperability.

- ZRO surged 26% as market reacts, but analysts debate liquidity risks and STG holder resistance potential.

- The move reflects broader blockchain trends of protocol consolidation to enhance ecosystem scalability and adoption.

LayerZero Foundation has announced a $110 million buyback and token swap plan for

Stargate
, marking a significant shift in the cross-chain bridge’s governance and token structure. Under the proposed initiative, STG token holders will have the opportunity to redeem their tokens for ZRO at a 0.08634 exchange rate, effectively phasing out the STG token and consolidating Stargate’s token base under the ZRO model. The move is expected to streamline operations and align Stargate’s revenue flows with the broader LayerZero ecosystem [1].

The buyback proposal, which requires 70% approval from Stargate’s decentralized autonomous organization (DAO), aims to enhance interoperability and operational efficiency across LayerZero’s expanding network of blockchain protocols. Bryan Pellegrino, CEO of LayerZero Labs, stated that the initiative would "add fuel to the fire" of Stargate’s development and underscore a strategic alignment between the two entities [4].

The announcement has already triggered notable market reactions, with both STG and ZRO tokens experiencing immediate price surges. ZRO, in particular, has seen a 26% increase in recent weeks, fueled by speculation surrounding the buyback and broader industry momentum [6]. The LayerZero Foundation has also emphasized the importance of a smooth transition, noting that the dissolution of Stargate’s current DAO will transfer governance control to LayerZero’s existing framework [2].

Industry analysts have offered mixed perspectives. Some view the consolidation as a strategic move to strengthen LayerZero’s position in the cross-chain infrastructure space, potentially increasing scalability and efficiency. Others remain cautious, particularly about the implications for token liquidity and the potential for resistance from long-term STG holders [5]. The success of the buyback and token swap will largely depend on community adoption and the ability of LayerZero to maintain Stargate’s core functionalities while expanding its reach [7].

The proposed buyback aligns with broader trends in the blockchain sector, where smaller protocols are increasingly being integrated into larger ecosystems to enhance performance and adoption. If approved, the move would mark a pivotal moment in the evolution of both Stargate and LayerZero, reinforcing the latter’s ambitions to lead the cross-chain interoperability landscape [2].

Sources:

[1] LayerZero Proposes $110M Acquisition of Stargate Bridge

https://www.ainvest.com/news/layerzero-proposes-110m-acquisition-stargate-bridge-token-swap-zro-2508/

[2] LayerZero Proposes US$110 Million Acquisition of Stargate Bridge

https://cryptonews.com.au/news/layerzero-proposes-110m-deal-to-absorb-stargate-retire-stg-token-130342/

[4] LayerZero Foundation has proposed a $110 million acquisition of the Stargate cross-chain bridge and STG tokens

https://coincu.com/news/layerzero-acquires-stargate-bridge/

[5] LayerZero Proposes $110M Stargate Token Consolidation

https://www.blocmates.com/

[6] ZRO Price Soars 26% as LayerZero Unveils $110M Stargate Acquisition Plan

https://thebittimes.com/token-BBNB-BSC-0x8471cdDBf94CFb545365012e871fc0658Ed76Fd6.html

[7] LayerZero Proposes $110M Stargate Token Merger in Consolidation Play

https://leapdigitalinvestments.com.au/