Stargate DAO Chooses LayerZero Over Cash in $120M Cross-Chain Power Play

In a significant move for the decentralized finance (DeFi) sector, LayerZero has secured the acquisition of Stargate, a cross-chain transfer protocol, following a highly contentious and competitive bidding process. The Stargate community voted overwhelmingly—94.76% of voting power—through approximately 15,000 wallet addresses in favor of the LayerZero Foundation's revised $110 million acquisition proposal [1]. Under the terms of the deal, all circulating Stargate (STG) tokens will be swapped for LayerZero’s native ZRO token at a rate of 1 STG to 0.08634 ZRO [3]. This conversion implies that STG holders will now receive a portion of the combined platform's future revenues through ZRO, as LayerZero revised its initial proposal to offer 50% of top-line revenue for six months to veSTG holders [2].

The acquisition was not without challenges. Wormhole, another cross-chain messaging protocol, submitted a competing $120 million cash offer for Stargate, urging a pause in the LayerZero vote to ensure a fair and transparent process [1]. Wormhole proposed an immediate cash payout to Stargate stakers, arguing that the LayerZero offer undervalued the protocol’s ongoing business [2]. Meanwhile, Axelar and Across Protocol also expressed interest in submitting bids but indicated they required more time to develop competitive proposals [1]. Hart Lambur, co-founder of Across, criticized the speed of the process, noting that “rushing benefits no one” [2]. However, the Stargate Foundation declined requests to delay the vote and proceeded with the LayerZero proposal [3].

LayerZero's CEO, Bryan Pellegrino, described the acquisition as a milestone, highlighting that the Stargate vote had the highest participation rate in the platform’s history [1]. He emphasized that the deal would create an “immediate revenue-generating asset” for LayerZero and accelerate value transfer across blockchain networks [2]. The acquisition is expected to enhance LayerZero's cross-chain capabilities by integrating Stargate’s liquidity pools, which facilitate native asset transfers without relying on traditional blockchain bridges—often targets of security exploits.

The move marks one of the largest decentralized autonomous organization (DAO) acquisitions in the crypto industry, valued at approximately $120 million [2]. Analysts suggest the deal could set a precedent for how decentralized protocols are acquired and integrated in the Web3 space [2]. It also underscores the growing competition among cross-chain platforms to control key infrastructure and user bases in the rapidly evolving DeFi ecosystem.

Source:

[1] LayerZero wins Stargate acquisition in 4-way bidding war (https://cointelegraph.com/news/layerzero-wins-stargate-acquisition-4-way-bidding-war)

[2] LayerZero Secures Stargate in Landmark $120M DAO Acquisition (https://cryptodnes.bg/en/layerzero-secures-stargate-in-landmark-120m-dao-acquisition/)

[3] LayerZero's acquisition proposal for Stargate has been approved (https://www.chaincatcher.com/en/article/2199931)