LayerZero Foundation Completes Stargate DAO Acquisition
The LayerZero Foundation, which oversees the cross-chain interoperability protocol LayerZero, has secured approval to acquire the Stargate decentralized autonomous organization (DAO). Stargate is known for its leading cross-chain bridge technology. The proposal passed after LayerZero adjusted its terms to address concerns among Stargate's native token holders.
Revised Offer for STG and veSTG Holders
Under the approved deal, Stargate DAO will dissolve and holders of the STG token can exchange them for LayerZero's ZRO tokens at a ratio of 1 STG to 0.08634 ZRO. The deal values Stargate at approximately $120 million, based on current token prices. For veSTG holders�those who locked their tokens to earn a share of Stargate's bridge fees�the original proposal would have ended their yield benefits. However, LayerZero revised the offer to grant veSTG holders 50% of Stargate's gross revenue for six months post-acquisition. The other 50% will fund buybacks and burns of ZRO tokens, with all future excess revenue going to this process.
Competing Bids and Community Debate
The voting process was complicated by last-minute offers from other cross-chain projects. The Wormhole Foundation, a competitor to LayerZero, requested a pause in the vote to present a counter-offer backed by $120 million in USDC, placed in a segregated wallet. Additional interest came from Axelar and Across, who suggested they may submit bids if the process allowed more time for proposals. Both organizations called for a competitive bidding process to maximize value for Stargate stakeholders. Despite these appeals, the vote proceeded as planned and concluded with the approval of the original LayerZero acquisition proposal.
Industry Implications and Future Outlook
LayerZero Labs CEO Bryan Pellegrino highlighted the significance of the acquisition, describing it as a new milestone for DAO mergers and acquisitions within the crypto sector. He noted that the integration of Stargate will provide the LayerZero ecosystem with direct access to end users, as well as a substantial revenue-generating asset. Launched by LayerZero in 2022, Stargate is cited as one of the most widely used cross-chain bridges, but its STG token has underperformed compared to tokens from other bridge protocols. The latest acquisition emphasizes increasing activity in crypto M&A, as established protocols look to expand their capabilities through strategic deals.
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