Wormhole Challenges LayerZero's $110M Stargate Deal

The Wormhole Foundation is making a move to counter LayerZero’s recent $110 million offer to acquire Stargate, which could spark a bidding war over this key blockchain bridge. LayerZero's proposal aims to integrate Stargate's ecosystem into its own, converting STG tokens into ZRO and using Stargate’s revenues to buy back LayerZero tokens. The merger would allow all circulating STG, including staked and voting tokens, to be exchanged at a rate of 1 STG for 0.08634 ZRO. This values STG at $0.1675 and ZRO at $1.94, and would result in the dissolution of the Stargate DAO. LayerZero’s proposal states that the merger would provide Stargate with the necessary resources to pursue an ambitious development plan and deepen its integration into the LayerZero ecosystem. However, Wormhole has launched a competing bid, expressing that Stargate's holders "deserve a more competitive process." They are calling for a pause in the voting period to reassess Stargate’s true value, citing future cash flows and significant treasury reserves. With Stargate having processed $4 billion in bridging volumes in July and holding $92 million in stablecoins and ether, Wormhole believes LayerZero's offer undervalues the potential future earnings of Stargate. Stargate operates as a decentralized bridge to facilitate seamless cross-chain transfers across over 80 blockchains. In contrast, Wormhole employs a different, older methodology of locking and minting assets. Wormhole has argued that until an adequate counter-offer is established, suspending the ongoing vote would benefit Stargate token holders. Initial plans indicated that the vote on LayerZero’s proposal would end on August 24. Comments from industry observers suggest that the protocol may be entering a new era of mergers and acquisitions in the crypto sphere, signaling an exciting competitive landscape ahead.