LayerZero Acquires Stargate Finance for $120M in ZRO Tokens After DAO Approval

LayerZero Acquires Stargate Finance for $120 Million

LayerZero has acquired Stargate Finance for $120 million worth of ZRO tokens. The Stargate Finance DAO approved the deal with 94% of votes in favor. This marks one of the most significant acquisitions in the cross-chain space, both in size and impact.

The deal also marks a reunion. Stargate Finance was first created by the LayerZero team in 2021. Later it spun out into an independent DAO. Since then, Stargate has become one of the most used multichain bridges in crypto. It connects about 50 blockchains and has powered over $70 billion in transactions. By merging again, the two projects will now operate under one umbrella, with ZRO as the official token.

The deal almost did not happen. Wormhole made a late attempt to challenge the acquisition. It argued that LayerZero’s first offer undervalued Stargate. Wormhole suggested that it could submit a higher bid than the $110 million proposal from LayerZero. Wormhole even asked Stargate DAO to pause the voting process to allow it to present a new offer. Reports also suggested that Across Protocol and Axelar were watching closely and had shown interest.

Source: Bidget

Despite the challenge, most DAO members supported LayerZero. The revised offer from LayerZero increased the deal’s value and added incentives. This included a revenue-sharing period for STG token stakers. With those adjustments, DAO members decided that the revised LayerZero offer was stronger. Their decision ended the possibility of Wormhole or others taking control.

This deal is also important for another reason. It represents one of the first times a DAO has been acquired for more than $100 million. This sets a new precedent in the crypto space. It shows how decentralized organizations can still take part in large-scale mergers and acquisitions that were once thought of as exclusive to traditional companies.

For LayerZero, the deal is about more than a reunion. It strengthens its control of the cross-chain ecosystem. According to data from Token Terminal, LayerZero currently controls over 85% of the blockchain interoperability industry. Prominent firms like BitGo, Paxos, and PayPal already make use of its technology. Reintroducing Stargate into its environment expands its value and reach.

Bryan Pellegrino, CEO of LayerZero Labs, offered his thoughts on the transaction. According to him, the group has been constructing cross-chain interoperability infrastructure for years. With Stargate back, the ecosystem can now directly reach customers, generate income right away, and shift wealth more quickly. His comments demonstrate how crucial Stargate is to LayerZero's further expansion.

Stargate DAO will be disbanded as a result of this merger. At a ratio of 1 STG to 0.08634 ZRO, holders of STG tokens will exchange them for ZRO. Buybacks of ZRO will henceforth be financed by revenue from Stargate operations. This establishes a clear link between ZRO's long-term worth and Stargate's success.

Source: X

ZRO Token Struggles Despite the News

Despite the major announcement, ZRO’s price has not risen. In the last 24 hours, it has dropped slightly, in line with a broader decline across the crypto market. However, ZRO’s losses go deeper. It is down 7.52% in the past week, 26% over three months, and 61% year-to-date. At $2.032, it has faced heavy pressure.

STG is not performing much better. At $0.1769, the token is down 2% in the past week and has lost more than 50% this year. Holders of both tokens are now watching closely. Many are hoping that the combined ecosystem can revive ZRO’s performance and bring back some of the value lost over the year.

The acquisition sets the stage for the next chapter of LayerZero’s growth. By reuniting with Stargate, it now controls both the infrastructure and the consumer-facing bridge. This gives it more dominance in the cross-chain space. Although both tokens face challenges in the market, the merger may create the momentum needed for a long-term turnaround.