TLDR
- LayerZero acquired Stargate protocol for $110 million after community vote
- Wormhole offered $120 million cash but failed to pause the voting process
- 95% of Stargate community approved LayerZero’s modified proposal
- STG tokens convert to ZRO at 1:0.08634 exchange ratio
- Deal represents one of crypto’s largest DAO acquisitions
LayerZero Foundation secured Stargate protocol in a $110 million acquisition after defeating multiple rival bids in a heated competition. The cross-chain bridge protocol’s community overwhelmingly supported the deal with 95% voting approval.
The acquisition battle intensified when Wormhole Foundation submitted a last-minute $120 million cash counter-offer. Wormhole requested a five-day voting pause to allow proper consideration of their higher bid, but Stargate leadership denied the request.
Over 15,000 wallet addresses participated in the governance vote, representing 7.2 million STG tokens supporting the acquisition. Only 399,400 tokens voted against LayerZero’s proposal, demonstrating strong community backing.
Cross-chain protocols Axelar Network and Across Protocol also expressed acquisition interest but acknowledged needing more time for proper due diligence. Across co-founder Hart Lambur stated he would participate if the voting process slowed down for competitive bidding.
Modified Deal Structure Wins Support
LayerZero initially faced community pushback over unfavorable terms for STG token holders. The foundation revised its proposal to address these concerns before the final vote.
The updated offer provides STG stakers with 50% of Stargate’s top-line revenue for six months post-acquisition. The remaining revenue funds ZRO token buybacks and burns, benefiting LayerZero’s ecosystem.
Under the approved terms, all circulating STG tokens exchange for ZRO tokens at a fixed 1:0.08634 ratio. This conversion rate values the transaction at approximately $120 million based on current market prices.
LayerZero originally developed Stargate in 2022, making this acquisition a return to its original creator. The protocol facilitates cross-blockchain transfers using liquidity pools instead of traditional bridge infrastructure.
Record-Breaking DAO Vote
LayerZero CEO Bryan Pellegrino highlighted the vote’s historic participation levels on social media. He emphasized that both stake weight and individual addresses showed 95% approval rates.
Stargate operates as one of crypto’s most widely used cross-chain bridges, processing significant daily transaction volumes. The acquisition provides LayerZero with immediate revenue generation and expanded user access.
The deal dissolves Stargate’s decentralized autonomous organization structure, bringing the protocol under direct LayerZero control. This consolidation aims to streamline operations and accelerate development.
Wormhole’s higher cash offer included immediate payments of three times projected six-month revenues to STG stakers. Despite the attractive terms, the community chose LayerZero’s long-term vision over immediate cash returns.
The acquisition represents one of crypto’s largest DAO buyouts, demonstrating growing consolidation trends in the cross-chain infrastructure sector. LayerZero now controls both the underlying messaging protocol and one of its most successful applications.
