LayerZero Proposes $110 Million Token Deal to Buy Back Stargate Bridge

LayerZero Foundation wants to buy Stargate Finance for $110 million in what could be one of crypto’s biggest consolidation moves this year. The deal would merge two major cross-chain projects under one token system.

The proposal, announced on August 10, 2025, would swap all STG tokens for LayerZero’s ZRO tokens at a fixed rate. This means STG holders would get 0.08634 ZRO for each STG token they own, valuing each STG at $0.1675.

Deal Terms and Token Swap Details

The LayerZero Foundation published the proposal on Stargate’s community forum, calling it a move to “accelerate both Stargate and LayerZero.” The deal sets STG’s value at $0.1675 per token, which is slightly higher than its $0.1637 price before the announcement.

If STG holders approve the deal, the Stargate DAO would dissolve completely. All future revenue from Stargate’s bridge operations would go toward buying back ZRO tokens from the market. This buyback system aims to reduce ZRO’s supply over time, potentially increasing its value.

The swap contract would stay open permanently, so STG holders wouldn’t face pressure to exchange their tokens quickly. After the swap, STG would have no role in Stargate’s operations.

Market Response Shows Strong Interest

Both tokens jumped after the news broke. STG rose 12% to $0.188, while ZRO climbed 15%. The price gains increased the deal’s total value from $110 million to about $127 million.

Trading volume spiked dramatically for both tokens. ZRO saw a 540% increase in 24-hour trading volume, showing strong investor interest in the potential merger.

The tokens have different histories with their peak prices. ZRO hit $7.47 in December 2024 but now trades around $2.44. STG reached $4.14 shortly after its 2022 launch but has dropped to around $0.19.

Community Split on Deal Value

The Stargate community has mixed feelings about the proposal. Some token holders think the offer is too low, while others support combining the two projects.

Critics point out that STG once traded much higher and generates steady revenue through bridge fees. One community member wrote that “given the amount of revenue Stargate makes and the potential for the protocol, this offer should be significantly higher.”

The current staking system would disappear under the new structure. STG holders who stake their tokens for rewards would lose this income source since ZRO doesn’t offer the same staking benefits.

However, some users see benefits in the merger. They argue that managing two separate tokens creates confusion and splits the team’s focus. One supporter said “managing two tokens is a pain and causes more distractions than necessary.”

Voting Process and Requirements

STG holders will decide the deal’s fate through a formal vote. The proposal needs 70% approval and a minimum of 1.2 million veSTG tokens participating to pass. These high requirements ensure broad community support rather than a simple majority.

The voting process has two phases. First comes a seven-day discussion period where community members can ask questions and debate the proposal. Then STG holders get three days to cast their votes through Snapshot, a blockchain voting platform.

Source: @PrimordialAA

LayerZero CEO Bryan Pellegrino said the company wants to “move faster, ship faster” with the combined platform. All LayerZero team members who own STG tokens will not vote, removing potential conflicts of interest.

Strategic Impact on Cross-Chain Infrastructure

This deal represents a major shift in how cross-chain projects operate. LayerZero originally created Stargate in 2022, and the bridge has processed over $70 billion in transfers since launch.

The merger would create a unified system for developers building cross-chain applications. Instead of integrating with separate protocols, developers could use one platform for all LayerZero ecosystem services.

Industry experts see this as part of a broader consolidation trend. As competition increases between blockchain networks, established players are combining resources to strengthen their market positions.

Stargate currently handles a large portion of LayerZero’s total message volume. Bringing it fully in-house could speed up development and improve security across both platforms.

What Happens Next

The community discussion period runs until August 17, 2025. During this time, STG holders can submit questions and concerns about the proposal.

If the vote passes, Stargate would become part of the LayerZero Foundation. Users of the bridge wouldn’t see any immediate changes to how it works. The transition would happen behind the scenes.

LayerZero hasn’t set a specific timeline for when operations would fully merge if the vote passes. The company says it wants to ensure a smooth transition without disrupting current bridge users.