3.5 years ago, Stargate was a protocol, a DAO, and a few core contributors. Those contributors lived in the community, and in LayerZero Labs. The success of Stargate V1 made it incredibly clear that a problem was solved and Stargate had a strong product market fit.
The Stargate Foundation was then born, initially serving a passive role to ensure the DAO functioned from an operational perspective. 2 years ago, the Stargate Foundation needed to grow in size in order to keep up with the speed of Stargate’s growth. This was necessary, and has landed Stargate where it is today. However - the role of the Foundation never changed. It has very much remained an operational entity, delivering on the mandate of the DAO – not a technical entity or business driven entity.
The entirety of technical innovation
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Stargate v1
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Stargate v2 & Hydra
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OFTs
were entirely invented, written, and audited by LayerZero Labs.
On top of this, the significant majority of commercial opportunities (Berachain, Story, USDT0, etc), has continued to be directed due to partnerships and existing relationships with LayerZero.
LayerZero has and continues to contribute to significant areas of Stargate. While this is naturally a mutually beneficial relationship, their value contributions to Stargate have been outsized.
If this proposal does not pass, the DAO will need to absorb all projected costs at significantly higher resource requirements. The recent DAO treasury reports have shown flat revenue MoM, with an average $300k earnings for the previous quarter. The industry is undergoing continued fee compression, despite growth in activity. With token prices down from highs earlier in the year, the annual budget has already increased in relative terms to maintain operation, and a recent restructure just undertaken reflects the need to stay lean.
Today, our incentives and priorities are aligned but if we continue to operate independently, we risk continued misalignment - and at times even direct competition - which will hurt both protocols long-term. In a world where LayerZero starts to directly pursue product lines in Stargate’s market, not only will it materially hurt Stargate’s revenue but it likely means Stargate will run at a significant net deficit; backing would reduce instead of increase monthly.
This proposal, if approved by the DAO, is an opportunity to lock in that alignment and bring to bear the LayerZero core contributors to build on and accomplish Stargate’s mission.
I fully support the voice of the community and look forward to the LayerZero Foundation addressing the concerns raised in this proposal. But I also believe that uniting Stargate with one of the strongest teams in crypto, will secure Stargate’s future and provide us with full unequivocal alignment and focus. This is the fuel Stargate needs.
One team, one focus, one massive story to tell.