LayerZero Foundation acquisition of Stargate (STG)

General
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Below is a summary of the Community Call held on Tuesday 12th August.

LayerZero x Stargate Community Call – 2025-08-12

Topic: Proposed LZ–STG acquisition terms, pricing rationale, revenue sharing, and post-merger plans.

Q: How was the price ratio for the deal determined?

Bryan:
We looked at the STG treasury backing and current market price, and proceeded to set a premium on top of that. With that in mind, we thought, “What’s the most we’re willing to pay for this deal?” and proposed that number. We also considered that veSTG holders have tokens locked for years, and have factored that into our revised proposal.

Q: Why differentiate between veSTG and liquid STG holders?

Bryan:
We heard the feedback that treating locked veSTG holders as liquid holders who bought after the announcement may have been of concern. Therefore, with the updated proposal, veSTG holders receive six months of revenue sharing.

Q: Will there be revenue growth during those six months?

Bryan:

Yes. Our goal is significant growth through:

  1. Stronger monetization focus.

  2. New products (e.g., stablecoin hubs, OFT hubs).

  3. Faster shipping with combined teams.

    1. We can execute immediately because we already know the tech stack and partners.

    2. Expect 4–8 weeks to align teams and roll out deals, not 6–8 months.

Q: Why merge now? Couldn’t this have been foreseen earlier?

Lamps:
The industry is shifting rapidly. Stablecoins are reaching product-market fit. Institutions are more comfortable working with LayerZero than with a DAO/Foundation structure.

Bryan:
Originally, Stargate was designed to be independent and immutable. V1’s growth stalled; V2 revived it. But Stargate needs more to stay in front. Without unifying as an organisation, we risk building overlapping products that could cannibalize each other. The merger avoids this and fully aligns resources.

Q: How will the Stargate Foundation budget and costs change?

Lamps:
Past budget went to team salaries, protocol operations, audits, legal, and some marketing. To maintain market share and innovate, a larger team and more funding are required. A rejection of this proposal will lead to a larger budget required for the next 12 months as we would not be able to rely as much on LayerZero resources.

**Q: What exactly is the six-month revenue sharing plan?
**
Context: The new proposal introduces a 6 month revenue sharing plan, so all veSTG holders at the time of the proposal can continue receiving STG staking revenue share.

Bryan:

  • veSTG holders will receive 50% of all top-line protocol revenue (same as today) for six months post-merger.

  • Applies to all products and new revenue streams.

  • The remaining 50% will be used to buy back ZRO.

  • After six months, 100% of excess revenue (net after costs) goes to ZRO buybacks.

Q: Where will the ZRO for the deal come from?

Bryan:
From the LayerZero Foundation. Details will come from their side later.

Q: Why trade STG for ZRO when ZRO has unlocks and no buybacks yet?

Bryan:
Without the merger, Stargate risks slower growth or decline due to limited resources and competing product development. The offer includes a premium, six months of revenue sharing, and integration into the LayerZero ecosystem—positioning for faster growth.

Closing Remarks (Henry):
The merger addresses past resource and attention gaps. It unifies two communities under one asset, enabling faster innovation and positioning to build critical infrastructure for how value moves onchain.

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