Wormhole Challenges LayerZero's $110M Stargate Bid as Undervalued

Generated by AI AgentCoin World
Wednesday, Aug 20, 2025 8:42 pm ET1min read
ETH
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Aime RobotAime Summary

- Wormhole Foundation challenges LayerZero’s $110M Stargate acquisition bid, arguing it undervalues the cross-chain bridge’s assets and growth potential.

- Stargate holds $92M in treasury assets and processed $4B in July 2025, with $348M in TVL across 80+ blockchains.

- LayerZero defends its offer as a premium over intrinsic value, while Wormhole proposes integrating liquidity pools for higher revenues.

- The outcome hinges on a 70% approval vote, with strategic visions shaping Stargate’s future in cross-chain ecosystems.

Wormhole Foundation has entered a competitive bid for Stargate Finance, directly challenging LayerZero’s proposed $110 million acquisition offer. In an August 20 statement posted on X, Wormhole Foundation (WF) argued that LayerZero’s offer significantly undervalues Stargate, a cross-chain bridge protocol with substantial treasury assets and growth potential. LayerZero initially announced its acquisition proposal on August 10, offering to buy all circulating STG tokens at $0.1675 per token in exchange for ZRO tokens [1].

Stargate’s financial position is a central point of contention in this acquisition debate. The protocol holds over $92 million in treasury assets, including $76 million in stablecoins and $16 million in

Ethereum
[1]. On-chain performance data also shows strong momentum: in July 2025, Stargate processed $4 billion in bridge volume—a tenfold increase year-over-year—while maintaining $348 million in total value locked (TVL) across more than 80 blockchains [1].

Wormhole Foundation criticized LayerZero’s bid for failing to reflect Stargate’s full potential. It emphasized the protocol’s “assets, brand, codebase, and team” as justification for a “meaningfully higher offer” than the $110 million proposed [1]. LayerZero, however, defends its valuation, noting that Stargate’s intrinsic token value stood at $0.14444 at the time of the proposal, while its trading price was $0.1637 per token. According to LayerZero, this means the offer represents a premium based on both metrics [1].

Beyond valuation, the two bids reflect differing strategic visions for Stargate’s future. LayerZero positions the acquisition as a move toward ecosystem consolidation, leveraging Stargate’s existing infrastructure and user base to expand ZRO’s utility beyond bridging. It also proposed redirecting future Stargate revenue toward ZRO token buybacks and eliminating potential resource conflicts between competing protocols [1].

Wormhole Foundation, meanwhile, envisions a partnership that integrates Stargate’s liquidity pools with its broader ecosystem. The foundation believes this approach would generate higher trading volumes, revenues, and user retention, benefiting both STG and W token holders [1]. It has also requested a five-business-day suspension of the current LayerZero proposal vote to allow time for due diligence and alternative bid preparation [1].

The governance vote for LayerZero’s acquisition requires a 1.2 million veSTG token quorum and 70% approval to pass. The proposal was later amended to include additional compensation for veSTG stakers through six months of revenue distribution, addressing concerns about unequal treatment of locked versus unlocked tokens [1].

The outcome of this contest will be critical for Stargate’s future direction and the broader cross-chain landscape. With both LayerZero and Wormhole presenting compelling arguments rooted in different strategic priorities, STG holders now face a pivotal decision that could shape the protocol’s trajectory in the years to come.

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[1] [Wormhole Foundation challenges LayerZero’s $110M Stargate acquisition proposal](https://cryptoslate.com/wormhole-foundation-challenges-layerzeros-110m-stargate-acquisition-proposal/)