LayerZero Foundation acquisition of Stargate (STG)

[LayerZero_Fndn]

3 full years after launching, Stargate is still the most used bridge in the industry today.

It’s done $70B+ in volume.

It’s the home of every major OFT.

It has made bootstrapping liquidity to any new chain trivially easy with Hydra.

And yet there is still so much more it could do.

We want to add a huge dose of fuel to the fire that Stargate has been burning – Which is why we are proposing an $110M acquisition of the Stargate token.

Proposal: Acquisition of the Stargate token

As of July 2025, Stargate has a backing of $0.14444 per circulating token

It currently trades at $0.1637 per token.

We are offering $0.1675 per token.

Mechanically, what this will look like:

• All circulating STG (including staked/voting STG) is swapped for ZRO at a ratio of 1 STG : 0.08634 ZRO reflecting a value of $0.1675 per STG and $1.94 per ZRO.

• Stargate will become even more deeply ingrained in the LayerZero ecosystem, building a suite of consumer-facing offerings that may expand on its core in many new ways.

• The dissolution of the Stargate DAO

• All future excess revenue generated by Stargate will be directed towards reducing the circulating supply of ZRO via a buyback program

Governance & Implementation

This proposal requires a governance vote from STG token holders under the existing Stargate Finance DAO rules.

Key steps:

1. Discussion Period: The proposal is now introduced in the Stargate community forum for discussion. STG holders are encouraged to ask questions for the next seven days.

2. Voting: After the discussion period, the proposal will move to Snapshot for three days. STG holders will vote For or Against the offer from the LayerZero Foundation. Quorum is 1.2M veSTG and approval threshold must meet 70% for the vote to pass.

3. Execution: If approved, STG holders will be informed of how to swap for ZRO. LayerZero Foundation will assume ownership and operation of all Stargate Finance duties. Stargate will continue without interruption; users of the Stargate bridge will not experience any downtime or changes in functionality during the transition.

4. Redemption: If the proposal is approved, STG will cease to have any role in the operations of Stargate Finance. Each STG token will become redeemable for 0.08634 ZRO through a fixed-rate redemption contract, based on ZRO’s market price of $1.94 at the time of proposal. The swap contract will remain open indefinitely. Should there ever be a need to close this contract in the future, advance notice will be provided.

Conclusion

This offer is designed to accelerate both Stargate and LayerZero, giving Stargate the resources to ship on an aggressive roadmap that expands its prerogative outside of bridging, while tying an incredible, revenue-generating protocol that touches the end-consumer deeper into the LayerZero ecosystem. If this proposal passes, Stargate will have a more dedicated set of technical resources to ship and move faster than ever before.

A single token, single direction, single focus, and a broader mandate.

Tldr; We want to move faster, ship incredible product and win. Let’s bring the bridge home.

    - LayerZero Foundation

[LayerZero_Fndn]

[Reserving top comment space for FAQs]

[StargateFoundation]

[Reserved comment space for future comment/questions]

[ahmetgumustekin]

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.

[priyeshu]

This seems like a well-thought-out proposal and looks like a step in the right direction. My theory is that bridges in themselves are almost no revenue-making machines, as the competitive landscape has evolved and a bridge having an independent token does more harm than good. For a bridge to be a well oiled machinery it should be supported and funded by a bigger entity that can be a cross-chain message protocol or a Layer-1 which wants to bring better liquidity and users to their ecosystem.

With the dissolution of STG token – I beleive the team would be able to lock-in and focus on what really matters. Managing two tokens is a pain and causes more distractions than necessarry.

I fully support the proposal and I beleive the STG holders will capture more upside in ZRO than they could potentially capture in STG because of the infirmness of the bridge as a business model.

[Supermod]

I’m yet to see the direct benefits to stg holders/stakers.

[Saintani]

I think stakers should be compensated differently from this. Generally it makes sense to merge these two coins, but it does not take into consideration the staking mechanism and the risk that stakers undertake by fixating their STG tokens for years.

In current form, me as a heavy staker, I vote against.
Afterall, stakers are the voters so it should be considered well.

[ahmetgumustekin]

I think LayerZero needs to raise its offer significantly. It’s not a profitable offer for STG holders.

[Vladtheinhaler]

The $STG token has been as high as $4 in previous cycles. Given the amount of revenue Stargate makes and the potential for the protocol, this offer should be significantly higher. I suggest that the historic price of STG be taken into account and that each STG token be redeemable at a 1:1 conversion rate to ZRO.

[NegativeStar]

You know, a long time ago, I bought STG tokens hoping for some “usefulness” in the future… But all I got was a role in the discord, and the opportunity to watch the investment amount rapidly approach zero.

P.S. // OFFTOP //

By the way… about half a year ago old users could get merch and I was among them, but because of the “complexity” of logistics, they couldn’t or didn’t want to send the parcel, but the moderator “havds” told me not to be upset and that they would DEFINITELY come up with another way to thank me for many years of support)… Now three months of deathly silence have passed … So … Do what you want.

[ahmetgumustekin]

If this acquisition goes through:
LayerZero will have acquired this for almost nothing.

Stargate FDN will no longer have to pay bridge revenues to its stakers, and this money will remain with FDN. According to the latest reports, this amounts to $939k over three months.

Current ZRO holders will be able to sell their ZRO at a higher price through buybacks made by Stargate from the revenue generated here.

STG holders, on the other hand, will exchange their tokens for ZRO at a very low price and will have to hold ZRO directly without receiving stake income.

The only losers here are STG holders. Therefore, LayerZero should either significantly increase its offer or this sale should not proceed.

[Dan]

absolutely disgusting for all the stargate hodlers and especially the lockers! After years we had a good way to reward the supporters via the 50/50 fee split and now those people will get massively diluted and generally robbed, bc we now have a 500M token and 2B fdv what will dilute any form of buy backs and mostly help team and vcs because of different emmission schedules???

[Exahash]

We’ve supported high Stargate Foundation run costs to support building a long term business knowing it would put downward pressure on the STG price for twelve months. The offer does not reflect fair value or a fair acquisition premium based on expected growth in the stablecoin marketplace.

U.S. Treasury Secretary Bessent stated that he expects the current stablecoin market to grow from $250 Billion to $3.7 Trillion after the passing of the GENIUS Act. And that’s just the size of the market cap of stablecoins. The velocity of money (how Stargate makes fees) will grow even faster.

Bull market modelling produced by the Stargate Foundation (and seen by LayerZero as directors of the Stargate Foundation) only a few months ago had a valuation of $0.60 per STG. And that’s was before GENIUS Act passed into law in the U.S.

Since then, the number of integrations, transaction volume and fees to long-term stakers has grown substantially. We’ve also been not taking fees on OFT volume to support the growth of the ecosystem.

Now with the upcoming launch into the Intents market, our profitability will also improve.

As is the expected value of Treasury assets. For instance market analysts like Tom Lee are valuing Ethereum at over $10,000 in the coming months.

While strategically, Stargate and LayerZero merging is sensible, the price and timing of this proposal right before a potential ALTSZN (see Raoul Pal and Julian Bittel’s analysis at Real Vision for a start) is not adequately compensating long term stakers of the DAO,

I want to warn everyone in negotiations, that this low-ball offer is called an anchoring strategy to make a later higher offer to sweeten the deal seem more attractive. But this initial offer is robbing the bank, literally trying to buy Stargate out for the value of treasury assets in the DAO.

There is no income stream currently from ZRO tokens, you would have no share in future income from the Stargate DAO and based on the very low participation in the recent LayerZero proposal to turn on the fees, it is unlikely for some time to come.

Owning ZRO is not owning equity in LayerZero.

I’m speculating, but would not be surprised if this is all part of a bigger strategy for LayerZero to clean up the books as part of plans to be publicly listed on U.S. public markets now the regulatory landscape has changed. If you swap your STG for ZRO, your ZRO won’t necessarily represent equity in a future U.S. LayerZero listing.

Maybe we should be considering getting other buyout offers from other parties as part of a competitive process rather than rushing this through in seven days. Here’s some alternatives to consider as part of a competitive process to start: Coinbase, Robinhood, Circle, Tether. Based on the ridiculous offer, we should be appointing bankers to shop the Stargate DAO around.

I urge everyone to delay any approval for any buyout until at least November to see how the market develops post GENIUS Act, to allow an open process and the opportunity for other market participants to do due diligence and make a competitive and realistic initial offer.

This offer from LayerZero is inadequate and should not be allowed to proceed to vote based on the rules of the Stargate DAO without further negotiations and a significantly improved offer.

[Dan]

imho u could convert the tokes 1:1 on the stated market price but u need to compensate all the lockers differently bc they get diluted and there must be a premium paid to the lockers

[Paul_Langford]

Hi, Paul here.

I am a huge fan of Stargate, a significant holder of STG, and highly active with the DAO. I am also a huge fan of LayerZero, and care deeply for its long term success.

I think the objective here is spot on. It makes sense to create a singular focus around one token that everyone can rally around, and I think this is massively bullish for ZRO. That being said, I agree with others feedback here: STG is undervalued and veSTG is massively undervalued.

For those of us who’ve chosen to stake STG tokens for years, we do so because we believe in the mission of STG. There is also an economic dimensions: we share in the fees earned by Stargate.

The current proposal treats liquid STG and veSTG the same when they are anything but. veSTG should receive a significant premium based on their staking period, and overall amount of STG staked.

I kindly ask that the LayerZero foundation reconsider the overall economic structure here for both liquid STG holders, and even more so for veSTG holders.

Thank you for your attention to this matter!

[LLCgenerator]

As a long-term holder of STG and veSTG, I find this acquisition proposal by the LayerZero Foundation to be fundamentally flawed and inequitable. It undervalues Stargate’s assets and potential while disproportionately benefiting LayerZero at the expense of existing stakeholders.

1. Undervaluation of STG: The proposed price per STG fails to account for Stargate’s substantial growth prospects, particularly in light of the expanding stablecoin market. Recent revenue figures and projections for trillion-dollar stablecoin volumes suggest significant upside potential—historically, STG has traded as high as $4. Acquiring the protocol for approximately $110M overlooks this intrinsic value and resembles an opportunistic bid rather than a fair-market transaction.

2. Inadequate Compensation for veSTG Holders and Stakers: Long-term stakers, who have committed capital and foregone liquidity to support governance and emissions, receive no differentiated treatment. The flat 1:0.08634 STG-to-ZRO swap offers neither a premium for lock-up periods nor continued revenue participation. The elimination of the 50/50 fee split, with all future revenues redirected to ZRO buybacks, effectively dilutes our positions and transfers value to LayerZero’s ecosystem without reciprocal benefits.

3. Structural Imbalances and Lack of Transparency: The deal grants LayerZero full control over Stargate’s technology, revenue streams, and roadmap, while dissolving the DAO and imposing a rushed seven-day voting window. This precludes competitive bidding from other entities (e.g., major stablecoin issuers) and raises questions about the process’s integrity. A more equitable approach would involve extending the timeline—potentially to November—to allow market developments and alternative offers.

In summary, this proposal appears designed to consolidate LayerZero’s position rather than foster genuine synergy, potentially eroding trust in decentralized governance. I urge fellow holders to vote against it on Snapshot and advocate for revisions, such as a 1:1 ZRO swap, lock-up-based premiums, and sustained revenue sharing. Stargate’s independent trajectory remains viable and preferable under these terms.

[Exahash]

The proposed process for the offer is not our approved StargateDAO Governance Process.

The rules approved by the DAO warrants that this proposal be further negotiated and revised before being put forward to a vote. It’s already clear it doesn’t have support to go ahead carte blanche.

Once community feedback has been gauged, a revised proposal with an acceptable offer should be submitted for a further seven days then voted.

Furthermore, a proposal of this magnitude should not have only a three day voting window. It should be at least seven days for voting.

LayerZero might be hoping it can be done in 10 days, but they need to allow at least another week to decide to revise and come up with acceptable terms or step away.

The current offer will not meet the 70% quorum.

You can read the agreed StargateDAO governance process on Snapshot:

https://snapshot.box/#/s:stgdao.eth/proposal/0x28ae2cd838afca844561ce095b03dc7838899fe9ef20cb63526f0ecdc84ef772

[unfinished]

As a holder of both STG and ZRO, I support this acquisition as a positive step for the long-term health of both projects.

Operationally, managing two separate tokens creates friction and slows down decision-making. Unifying under ZRO streamlines governance and aligns the ecosystem toward a common goal, which is fundamentally bullish.

Regarding valuation, the market is the most objective measure. Many point to Stargate’s revenue, but we must also ask why the token price was near its all-time low before this proposal was announced. The market had already priced in the protocol’s standalone value.

However, I agree that long-term stakers deserve better compensation. veSTG holders locked capital and took on significant risk. A flat conversion rate doesn’t acknowledge their contribution, and a premium for these holders should be considered to make the deal more equitable.

Ultimately, STG holders must decide if they are better off post-acquisition: holding a standalone bridge token, or a token representing a stake in the broader, unified LayerZero ecosystem. I believe the latter offers a more compelling path for future growth.

[blackeagle]

Better to have beneficial plan for STG holders

[whiteagle]

I have staked STG for more than a year. Looking for better options for STG stakers.