August 11, 2025
5 min read
Jesse Coghlan
LayerZero Proposes $110 Million Acquisition of Stargate, Tokens Surge Amid Mixed Reactions
The LayerZero Foundation, the team behind the cross-blockchain messaging protocol LayerZero, has proposed acquiring the crypto protocol Stargate for $110 million. This announcement has led to significant gains in the tokens associated with both projects. LayerZero detailed the acquisition plan in a post on Stargate’s forum, describing the offer as "designed to accelerate both Stargate and LayerZero, giving Stargate the resources to ship on an aggressive roadmap that expands its prerogative outside of bridging." The proposal involves swapping Stargate Finance's native token (STG) for LayerZero's token (ZRO) at a rate of 1 STG to 0.08634 ZRO. Stargate was originally developed and launched by LayerZero in 2022, and if the deal is approved by Stargate’s community, the platform would return under LayerZero’s control. Stargate enables users to transfer digital assets across blockchains through liquidity pools. The platform emphasizes native asset transfers instead of relying on traditional blockchain bridges, which have historically been vulnerable to hacks.STG and ZRO Tokens Rally Following Proposal
Following the acquisition announcement, both LayerZero and Stargate tokens experienced double-digit percentage gains. LayerZero’s token surged over 23% in 24 hours, trading at approximately $2.44, marking it as one of the top gainers in the crypto market during that period. Stargate’s token also rose by about 16.5% to just over $0.19, continuing its upward trend over the past week. Despite these gains, both tokens remain significantly below their all-time highs, with ZRO down 67% from its December peak of $7.47 and STG down more than 95% from its mid-2022 peak of $4.14.LayerZero CEO Highlights Benefits of Unified Direction
Bryan Pellegrino, co-founder and CEO of LayerZero, expressed enthusiasm about the proposal on social media, emphasizing the desire "to move faster, ship faster." He stated that the acquisition would help Stargate execute its ambitious roadmap and create a unified technology stack for developers integrating within the LayerZero ecosystem. Pellegrino also noted that the deal would provide STG holders with a more liquid token and offer the Stargate community a clear path forward with increased resources and a unified direction.Community Feedback: Concerns Over Token Swap Terms
Despite the positive market reaction, many Stargate token holders voiced concerns about the fairness of the offer. Some acknowledged the need for a token swap but criticized the proposed terms as unattractive, particularly because the revenue-sharing system available to STG holders would not carry over to ZRO holders. Additionally, the deal does not support staking for rewards post-swap. One Stargate community member commented, "The offers are not attractive at all. They do not offer any advantages to STG holders, and STG’s revenue-sharing system is not available on ZRO. We will only be able to hold on to our tokens." Other users suggested that LayerZero should significantly increase its offer, with some advocating for a 1:1 token swap ratio, citing Stargate’s revenue generation and protocol potential. While some agreed that merging tokens makes sense to reduce complexity, they still found the current deal unfair due to the loss of staking benefits. Stargate has announced that the proposal will remain open for community comments for seven days, after which the platform’s decentralized autonomous organization (DAO), composed of token holders, will vote on the acquisition.Source: Cointelegraph