LayerZero Proposes $110M Acquisition of Stargate Bridge

On Sunday, the LayerZero Foundation proposed acquiring the Stargate bridge and its STG tokens for $110 million, signaling a move to integrate a key player into its ecosystem. This initiative aims to bolster the capabilities of both Stargate and LayerZero, providing the former with the necessary resources to implement an ambitious expansion beyond its bridging services. According to the proposal, the STG token would be phased out, allowing holders to exchange their STG for ZRO, LayerZero's native token, at a rate of 1 STG to 0.08634 ZRO—a valuation of $0.1675 per STG and $1.94 per ZRO. This acquisition would place Stargate under the LayerZero Foundation, resulting in the dissolution of its DAO. LayerZero Labs CEO, Bryan Pellegrino, emphasized the need for speed in execution, tweeting, "We want to help Stargate follow through on its ambitious plans while creating a unified system for LayerZero's ecosystem." Launched in 2022 by LayerZero, the Stargate bridge reached a peak token price of $4.14 shortly thereafter. Despite being recognized as the most utilized bridge in the industry, with historical volumes exceeding $70 billion, the value of the STG token has plummeted to below $0.20. Following LayerZero's acquisition proposal, STG saw an approximate 12% increase, trading at about $0.188 by 2:30 PM ET. Similarly, the ZRO token rose around 15% post-announcement. This fluctuation in token prices raises the dollar value of the deal from the initial $110 million to nearly $127 million at current rates. The proposal is actively inviting feedback in the Stargate DAO community forum for the next week, with early comments indicating dissatisfaction among STG holders regarding compensation. One user noted, "The $STG token previously peaked at $4. Given Stargate's revenue and potential, the offer should be higher." Disclaimer: The Block is an independent media outlet delivering timely news and data. As of November 2023, Foresight Ventures is a major investor in The Block and operates independently in the crypto industry.