LayerZero Foundation has announced a proposal to acquire Stargate, a cross-chain bridge, for $110 million. In this proposal, STG tokens will be swapped for ZRO tokens, and governance will be transitioned onto the new platform.
Deal Details and Immediate Effects
LayerZero Foundation has initiated a $110 million proposal to acquire Stargate. In this deal, STG tokens will be deactivated, allowing holders to exchange them for LayerZero's native token, ZRO. Stargate will be incorporated into the LayerZero Foundation, and its DAO will be dissolved.
Immediate changes include the decommissioning of STG tokens at a rate of 1 STG to 0.08634 ZRO, equivalent to $0.1675 per STG. Stargate will cease to operate as an independent entity and function as part of LayerZero, which aims to expand its capabilities beyond just bridging.
> "We want to move faster. We aim to create a single structure that can integrate with the LayerZero ecosystem while helping Stargate implement its ambitious roadmap." - CITE_W_A
Stargate's Historical Role
Currently, Stargate remains one of the most used bridges with a transaction volume exceeding $70 billion, just three years after its launch. According to CoinMarketCap, the price of the STG token is at $0.18 with a 24-hour trading volume of $45.67 million, reflecting a 708.92% increase. STG has shown a price rise of 16.06% over the last week.
Impact on the DeFi Market
The integration of Stargate into the LayerZero structure could shift financial dynamics in cross-chain protocol interoperability. ZRO gains a larger user base and utility, potentially influencing broader DeFi markets. This acquisition could also prompt similar actions across the industry, leveraging consolidated governance models.
LayerZero's acquisition proposal for Stargate has the potential to significantly change the landscape of cross-chain technology and DeFi protocols, despite mixed reactions from the community.
