The LayerZero Foundation has made a buyout offer for STG tokens from the decentralized autonomous organization (DAO) governing the Stargate bridge. This initiative has drawn significant attention and caused price fluctuations in the markets.
The Buyback Proposal
In a Sunday forum, the LayerZero Foundation proposed a buyback of STG tokens from the Stargate DAO. If approved, this will effectively dissolve the autonomous organization.
The Stargate bridge, launched over three years ago, has reportedly generated over $70 billion in trading volume. It hosts the majority of OFT (Omnichain Fungible Tokens), a universal token standard used for transferring and composing assets across all blockchains.
The current offer stands at $0.1675 per token, while the price according to the foundation’s post was $0.1637. The conversion intends to swap all circulating STG (including staked/voting tokens) for ZRO (Layer Zero’s native token) at a ratio of 1 STG: 0.08634 ZRO.
Price Reaction
Following the proposal's announcement, both tokens have recorded notable gains. At the time of writing, STG rose by 20% to $0.1965, while ZRO increased by 26% to $2.42.
If we consider the initial bid of 1 STG to 0.08634 ZRO with current prices, that would correlate to $0.1961 per STG and $2.42 per ZRO. Naturally, the deal itself is now more costly, given the overall increase in token prices; it now stands at approximately $137 million, reflecting a leap of $27 million in just under 24 hours.
Discussions and Future
Currently, the community is actively discussing the proposed buyback. Opinions among forum participants and users on the platform X are divided: some express optimistic expectations of the deal, while others raise concerns.
The discussion period will last for 7 days, after which the proposal will move to the Snapshot platform for a three-day voting period. The quorum is set at 1.2 million veSTG (staked STG), and the approval threshold is 70% for the vote to pass.
The LayerZero buyback initiative for STG and ZRO has sparked active discussions among token holders and experts. The implications of this proposal, as well as community reactions, are of great interest in the crypto market.
