LayerZero proposes $110M buyout of Stargate amid STG token struggle

LayerZero Foundation has put forward a proposal to acquire all circulating Stargate tokens for roughly $110 million in ZRO, aiming to consolidate control over one of the most-used cross-chain bridges in the market.

Summary

• LayerZero proposes $110M acquisition of all Stargate tokens, offering $0.1675 per STG.
• Deal would dissolve Stargate DAO, integrate governance under LayerZero, and use revenue for ZRO buybacks.
• STG rose 12% and ZRO 15% after the announcement; community vote requires 70% approval.

The Aug. 11 proposal values Stargate (STG) at $0.1675, a slight premium to its pre-announcement price of $0.1637, and would dissolve the Stargate DAO in favor of a unified governance structure under LayerZero (ZRO).

LayerZero buyout proposal details

The plan would see all circulating and staked STG swapped for ZRO at a fixed ratio of 1 STG = 0.08634 ZRO, based on ZRO’s $1.94 market price at the time of the offer. After completion, STG would no longer play any operational role, and token holders would be able to use a fixed-rate contract to redeem their tokens indefinitely. 

All future Stargate earnings would go toward ZRO buybacks under LayerZero’s plan, gradually lowering the amount of stock in circulation. By going beyond bridging into new consumer-facing services, the integration aims to speed up product delivery.

Stargate, launched in 2022, has processed over $70 billion in volume and introduced the Hydra system to streamline liquidity deployment across chains.

Market and community reaction

Following the announcement, STG surged 12% to $0.188 and ZRO rose 15%, increasing the deal’s estimated value to about $127 million. The proposal is now in a seven-day discussion phase on the Stargate DAO forum, after which STG holders will vote. Approval requires 70% support and a quorum of 1.2 million veSTG.

While LayerZero says the acquisition will accelerate development and streamline governance, some STG holders argue the offer undervalues the bridge’s revenue potential and historical token price. If passed, the transaction would mark a significant consolidation in LayerZero’s control over its flagship bridging infrastructure.