LayerZero Secures Stargate in $110M Token-Swap After Competitive Bidding War

LayerZero has successfully acquired Stargate, a blockchain cross-chain bridging platform, in a competitive four-way bidding war. The Stargate community ratified the deal through a governance vote, with 95% of participating token holders approving the $110 million token-swap proposal from LayerZero. This marked the highest voter participation in LayerZero’s history, with over 15,000 addresses casting their votes [1].

LayerZero’s initial offer, which proposed using Stargate’s excess revenue for a buyback of its ZRO token, was criticized by the community for not offering sufficient benefits to STG token holders. In response, LayerZero revised the offer to allocate half of all top-line revenue over six months to Stargate stakers, with the remainder used for ZRO buybacks. Under the final terms, all circulating STG tokens will be swapped for ZRO at a ratio of 1 STG to 0.08634 ZRO [1].

The acquisition triggered a late surge of competing interest from other cross-chain platforms. Wormhole submitted a $120 million all-cash bid and attempted to have the LayerZero vote paused, while Axelar and Across also signaled their intent to participate if the process was extended. However, the Stargate Foundation clarified that the LayerZero vote could not be delayed, and the final decision rested with the community [1].

LayerZero’s successful acquisition reflects the growing strategic value of cross-chain infrastructure in the blockchain ecosystem. By integrating Stargate’s native asset transfer technology—which avoids the use of traditional blockchain bridges—LayerZero aims to strengthen its role as a key player in the interoperability space. Stargate’s technology is designed to facilitate seamless asset movement across chains through liquidity pools, offering a potentially more secure alternative to traditional bridging methods [1].

The bidding war also underscores the increasing competition among blockchain protocols to control and integrate essential infrastructure. With multiple major players submitting offers, the Stargate acquisition highlights the demand for scalable, secure, and decentralized cross-chain solutions. This trend may lead to further consolidation in the interoperability sector as projects seek to enhance their offerings through strategic acquisitions [2].

Sources:

[1] https://cointelegraph.com/news/layerzero-wins-stargate-acquisition-4-way-bidding-war?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound

[2] https://www.newsbreak.com/coindesk-1870864/4192616030001-state-of-crypto-crypto-takes-jackson-hole