The LayerZero Foundation, supporter of the cross-chain messaging protocol LayerZero, has proposed a $110 million acquisition of the crypto protocol Stargate, sending both projects’ tokens higher.
In a Sunday post on Stargate’s forum, LayerZero framed the offer as a move to “accelerate both Stargate and LayerZero,” providing Stargate with the resources to pursue an ambitious roadmap and broaden its scope beyond bridging.
Under the plan, Stargate Finance’s STG tokens would be exchanged for LayerZero’s ZRO tokens at a rate of 1 STG to 0.08634 ZRO.
Stargate, originally developed and launched by LayerZero in 2022, would return to the foundation’s control if the deal wins community approval.
Stargate enables users to move digital assets across blockchains through liquidity pools, which it promotes as allowing native asset transfers rather than relying on traditional blockchain bridges — a technology often targeted by hackers.
STG, ZRO tokens rise on plan
Tokens linked to both platforms jumped by double-digit percentages following LayerZero’s proposal.
LayerZero’s token surged more than 23% in the past 24 hours to $2.44, ranking among the top performers in the crypto market over the period, according to CoinGecko.
Stargate’s token climbed about 16.5% over the past 24 hours to just above $0.19, building on its gains from the past week.
Despite the recent rally, both tokens remain far below their all-time highs: ZRO is down 67% from its December peak of $7.47, while STG has plunged more than 95% from its mid-2022 high of $4.14.
LayerZero CEO praises plan as a “unified direction”
LayerZero co-founder and CEO Bryan Pellegrino shared on X that he aims “to move faster, ship faster.”
He explained that the proposal would “help Stargate execute on its ambitious roadmap while creating a single stack that anyone integrating within the [LayerZero] ecosystem can adopt.”
Pellegrino also highlighted that the deal would provide STG holders with “a more liquid token” and offer the Stargate community “a clear path forward with significantly more resources and a single unified direction.”
STG tokenholders call the plan “not attractive at all”
Despite the proposal, Stargate tokenholders responded mostly with criticism, acknowledging the need for a token swap but calling the offer unfair and concerned it excludes staking opportunities.
“One Stargate user wrote, ‘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.’”
This user urged LayerZero to “raise its offer significantly.” Others described the proposal as “fundamentally flawed” and suggested a 1:1 token swap might be more appropriate given Stargate’s revenue and growth potential.
Some users recognized the challenges of managing two tokens, calling the merge sensible, but still agreed the current deal was unfair since STG holders would lose the ability to stake for rewards.
The proposal will remain open for feedback over the next seven days, after which Stargate’s decentralized autonomous organization—composed of tokenholders—will vote on the deal.
