Foundation proposes $110 million acquisition of Stargate, exchanging STG tokens for ZRO tokens.
LayerZero Foundation Proposes Acquisition of Stargate Cross-Chain Bridge
The LayerZero Foundation has announced a proposal to acquire the Stargate cross-chain bridge, with the aim of bringing the bridge under its direct ownership and operation. The proposed acquisition, valued at approximately $110 million, will be paid in LayerZero's native token, ZRO.
Under the terms of the proposal, Stargate's governance would be integrated under LayerZero's ecosystem, effectively ending Stargate's standalone governance and rewards. The Stargate DAO would be dissolved, and the STG token would no longer have an operational role. However, token holders would be able to redeem their tokens indefinitely via a fixed-rate contract.
The acquisition plan also includes a provision for future Stargate platform revenue to be redirected towards buying back ZRO tokens, aiming to strengthen ZRO’s long-term value.
The proposal requires a community vote, with a 70% approval threshold for it to pass. A quorum will be reached with 1.2 million vote-escrowed STG (veSTG) tokens. If the proposal is approved, STG holders would exchange their tokens for ZRO at a fixed ratio of 0.08634 ZRO per STG.
The news comes after the STG token surged 14% following the proposal's introduction, despite the token still trading 95% below its all-time high. The snapshot vote for the proposal will be carried out over three days, with the discussion period ending after seven days.
This consolidation is intended to accelerate development by unifying governance and expanding LayerZero’s cross-chain interoperability services beyond bridging. The LayerZero Foundation stated, "We want to move faster, ship incredible product and win. Let's bring the bridge home."
[1] Unchained Daily Newsletter [2] CoinDesk [3] Decrypt [4] The Block [5] Cointelegraph
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