LayerZero Acquires Stargate Bridge in $110M Proposal

LayerZero Foundation has proposed a $110 million acquisition of the Stargate cross-chain bridge and STG tokens, integrating them into its ecosystem and transitioning governance to ZRO tokens.

The acquisition aims to enhance Stargate’s roadmap and streamline governance, impacting token valuations and potentially affecting broader cross-chain transaction dynamics.

LayerZero’s $110M Stargate Acquisition: Details and Immediate Effects

LayerZero Foundation has initiated a $110 million proposal to acquire the Stargate cross-chain bridge and its STG token. The proposal includes deactivating STG tokens and enabling 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 no longer operate as an independent entity but as part of LayerZero, which aims to expand its privileges beyond 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.”

Market reactions include a 12% increase for STG to $0.188 following the announcement. The proposal is currently under a 7-day review on the Stargate DAO forum, with some members expressing dissatisfaction over the token swap offer.

Stargate’s Historical Role and Potential Future Impact of Acquisition

Did you know? Three years post-launch, Stargate remains the top used bridge with a transaction volume exceeding 70 billion USD.

CoinMarketCap reports Stargate token (STG) at $0.18 with a 24-hour trading volume of $45.67 million, reflecting a 708.92% surge. STG shows a 16.06% price rise over seven days, despite a 20.32% dip over the last 90 days.

LayerZero’s integration of Stargate 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.