LayerZero, a blockchain messaging protocol, has finalized the $110 million acquisition of cross-chain platform Stargate following a heated last-minute bidding war.
The Stargate DAO approved the deal with a 95% majority, marking one of its most active votes ever. More than 15,000 addresses cast over 7.5 million veSTG tokens in favor. Under the agreement, the DAO will be dissolved, and governance responsibilities will transition to the LayerZero ecosystem.
Stargate set to move under LayerZero’s governance
As part of the final agreement, Stargate stakers will receive 50% of protocol revenue over the next six months, while the other 50% will fund LayerZero’s ZRO token buybacks to support its value. Starting Monday, Aug. 25, STG holders will also be able to convert their tokens into ZRO at a fixed rate of 1 STG = 0.08634 ZRO.
The move represents a structural shift, aligning Stargate’s cross-chain liquidity network with LayerZero’s broader interoperability strategy as governance and operations transition under the LayerZero framework.
Competing bids fall short in Stargate vote
Securing approval was far from straightforward. LayerZero’s initial proposal faced pushback for ending Stargate’s staking program and allegedly undervaluing its strong revenue stream. This dissatisfaction opened the door for rivals, sparking a rare multi-protocol bidding war in DeFi.
Wormhole, Axelar, and Across Protocol quickly entered the fray, with Wormhole even putting forward a $120 million all-cash offer that included faster payouts for Stargate token holders. Despite the higher bid, the Stargate community ultimately backed LayerZero, prioritizing strategic alignment over immediate financial incentives.
Stargate was originally incubated by LayerZero Labs in 2021 before being spun out as a DAO the following year. Its reacquisition reinforces LayerZero’s ecosystem and strengthens its position in cross-chain messaging and liquidity at a time when interoperability remains one of DeFi’s biggest challenges.
With the deal now finalized, attention turns to how LayerZero will integrate Stargate’s infrastructure and whether the move can deliver lasting value for both ZRO holders and Stargate’s dedicated community.
