Wormhole Foundation Counters LayerZero Bid with $120M Stargate Offer

The Wormhole Foundation announced on August 23 its proposal to acquire Stargate for over $120 million in USDC, surpassing LayerZero’s $110 million offer and halting the governance vote.

This acquisition bid by Wormhole could reshape cross-chain interoperability strategies, offering immediate liquidity to Stargate holders while amplifying competition in decentralized finance protocols.

Wormhole’s $120M USDC Bid for Stargate Finance Explained

Wormhole Foundation’s $120 million USDC acquisition offer for Stargate Finance underscores a strategic maneuver aimed at topping LayerZero’s previous proposal. Bryan Pellegrino, CEO of LayerZero Labs, has outlined that his company’s bid seeks long-term value and ecosystem sustainability.

The core change introduced by Wormhole’s proposal is the immediate liquidity for STG holders, providing a clear cash value instead of locked tokens subject to market fluctuations. Community responses reflect notable division, with some emphasizing the liquidity benefits of Wormhole’s bid and others wary about potential governance disruptions.

“STG holders deserve better. We are prepared to submit a meaningfully higher bid reflecting Stargate’s true growth and codebase… We have requested a five-day pause to allow fair process and due diligence.” — Wormhole Foundation

Analyzing DeFi Acquisition Strategies and Market Reactions

Did you know? This bid recalls past trends in DeFi acquisitions where cash offers historically boosted market confidence, leading to price stabilization.

As of the latest data from CoinMarketCap, Stargate Finance’s token (STG) is valued at $0.18, marking a 4.13% increase in the last 24 hours with a market cap of $117.48 million. Recent trading volume surged over 106%, indicative of heightened interest following the new bid.

Insights from the Coincu research team suggest this acquisition clash could usher financial shifts within the DeFi sector. Historically, all-cash propositions like Wormhole’s have delivered positive market reactions due to enhanced liquidity—potentially easing regulatory paths for future acquisitions.