The LayerZero Foundation has proposed to acquire the cross-chain liquidity protocol Stargate for $110 million. The proposal includes swapping Stargate tokens (STG) for LayerZero’s native token (ZRO).
Acquisition Proposal
LayerZero unveiled the plan on Stargate’s governance forum on Sunday, describing it as a move to accelerate development and bring Stargate back under its umbrella. Stargate was originally launched by LayerZero in 2022 to enable native asset transfers between blockchains without relying on traditional, hack-prone bridges.
Under the proposal, STG would be exchanged at a rate of 1 STG for 0.08634 ZRO. The foundation argues that consolidating the two tokens would streamline operations and provide more liquidity for STG holders.
Market Reaction to the Deal
The market reacted positively, with ZRO climbing over 23% in 24 hours to $2.44 and STG rising 16.5% to $0.198. However, both tokens remain far below their peaks: ZRO is down 67% from its December 2024 high of $7.47, while STG has fallen over 95% from its mid-2022 top of $4.14.
Criticism and Public Discussion
Several Stargate tokenholders criticized the deal, calling the exchange rate unfair. They noted that ZRO does not offer STG’s revenue-sharing or staking benefits. Some suggested the offer should be significantly higher—potentially a 1:1 swap—given Stargate’s revenue potential. The proposal is open for community feedback for the next seven days, after which Stargate’s decentralized autonomous organization (DAO) will vote on whether to approve the acquisition.
The LayerZero proposal to acquire Stargate could potentially have a significant impact on the market and its participants. While some express support and see this as an opportunity for growth, others remain skeptical and seek better terms.
