Stargate Community Approves $110M LayerZero Takeover Amid $120M Wormhole Cash Bid

LayerZero has announced that the Stargate DAO has officially approved its $110 million acquisition proposal for the Stargate cross-chain bridge and its native token, STG [4]. The vote, which took place over several days, saw 95% of participating members cast their support in favor of the deal [1]. As a result, STG token holders will be able to begin swapping their tokens for LayerZero’s ZRO token at a fixed rate of 1 STG to 0.08634 ZRO, starting next Monday [4]. This exchange rate values each STG at $0.1675, while ZRO is priced at $1.94.

The acquisition marks a significant consolidation in the cross-chain infrastructure space, with LayerZero aiming to integrate Stargate’s bridge into its broader ecosystem. Stargate, known for its high-speed and low-cost cross-chain transactions, has been a key player in LayerZero’s architecture, and this move is expected to enhance LayerZero’s position in the market.

However, the deal did not go uncontested. Just days before the vote, the Wormhole Foundation announced a competing bid of $120 million in USDC, outpacing LayerZero’s token-swap approach [2]. Wormhole’s offer was cash-based, a notable shift from the common practice of using token swaps in DeFi acquisitions. This approach was seen as a way to provide immediate liquidity to STG holders, a factor that many in the community prioritized [2]. Wormhole also requested a pause in the Snapshot vote to allow for a deeper review of Stargate’s financials, including its $345 million total value locked (TVL), $4 billion in July bridge volume, and a treasury exceeding $92 million [6].

Despite Wormhole’s aggressive move, the overwhelming vote in favor of LayerZero’s proposal signals a strong preference among the Stargate community for a long-term, token-based integration. Analysts suggest that the outcome reflects the community’s alignment with LayerZero’s vision for a unified cross-chain infrastructure, even if it means forgoing immediate liquidity [4].

The broader implications of this acquisition could shape the future of cross-chain M&A in DeFi. Wormhole’s cash-based strategy, while unconventional, highlights a potential new direction for valuing and structuring such deals, emphasizing liquidity and regulatory clarity over speculative token mechanics [7]. If adopted more widely, this model could influence how DeFi protocols are evaluated and acquired, particularly in an evolving regulatory environment where token swaps may face greater scrutiny.

For LayerZero, the approval of its acquisition represents a major step forward in its strategy to expand its cross-chain capabilities. With Stargate now under its umbrella, the company is likely to consolidate its leadership in the space, potentially limiting the influence of competitors like Wormhole in the near term [10].

Source:

[1] Wormhole Foundation Counters LayerZero Bid with $120M (https://coincu.com/news/wormhole-120m-stargate-bid/)

[2] Wormhole Raises Stargate Bid to $120M in Cross-Chain (https://www.ainvest.com/news/wormhole-raises-stargate-bid-120m-cross-chain-showdown-2508/)

[4] LayerZero Stargate Merger: Foundation Proposes $110M (https://cryptorank.io/news/feed/f4236-layerzero-stargate-stg-buyout-proposal-tokens-react-surge)

[6] Wormhole Foundation Bids $120M USDC for Stargate (https://phemex.com/news/article/wormhole-foundation-offers-120m-usdc-to-acquire-stargate_15926)

[7] Wormhole Outbids LayerZero with $120M USDC Cash (https://www.ainvest.com/news/wormhole-outbids-layerzero-120m-usdc-cash-offer-stargate-2508/)

[10] Wormhole formally proposed to acquire Stargate for at (https://www.odaily.news/en/newsflash/444704)