In a groundbreaking move for the decentralized finance (DeFi) sector, the LayerZero Foundation has proposed a $110 million acquisition of Stargate Bridge, a cross-chain protocol it helped develop and launch in 2022. This deal aims to consolidate control over Stargate by acquiring all circulating STG tokens and transitioning them to LayerZero’s native ZRO tokens.
Details of the Acquisition Proposal
The proposal includes dissolving the Stargate DAO and integrating its operations under LayerZero’s umbrella. This strategic move is intended to streamline operations and tie bridge revenue to ZRO buybacks, potentially enhancing the value of LayerZero’s token. The deal, initially valued at $110 million, could now be worth around $127 million due to a recent market rally.
LayerZero’s CEO, Bryan Pellegrino, emphasized that the acquisition would accelerate development for both projects. By merging resources, Stargate could pursue an expanded roadmap beyond its current bridging capabilities, potentially reshaping the cross-chain market.
Market Reactions and Community Feedback
Following the announcement, both STG and ZRO tokens saw significant price surges, with STG increasing by approximately 12-16.5% and ZRO jumping by up to 23%. However, the proposal has sparked mixed reactions within the community, with debates over governance implications and the perceived value of the token swap.
The discussion is currently open on the Stargate DAO community forum, where stakeholders are weighing the benefits and drawbacks of this consolidation. As the DeFi space continues to evolve, this acquisition could set a precedent for future mergers and integrations in the industry.
Maria Lourdes
