Initial Analysis: Stargate Valuation & M&A Market
Relayzero is pleased to share some preliminary analysis on how we should think about valuing Stargate in the context of the LayerZero offer and Wormhole’s expressed intent to counter.
Valuation
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Offer Market Cap: $110.6M (based on 660.5M STG in true circulation × $0.1675 offer price).
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Treasury (ex-STG): ~$95M in stablecoins, ETH, and other assets.
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Enterprise Value (EV): $110.6M – $95M = ~$15.6M.
Protocol fee data (DefiLlama): Last 30d fees ≈ $180K → annualized ≈ $2.16M.
This means the Enterprise Value (EV) Revenue Multiple = ~7.2× annualized revenue.
Note: this does not account for the proposed 6mo rev share for veSTG holders.
View google sheet calculations here.
How This Fits M&A Market Multiples
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In M&A, protocols and companies are usually priced on revenue multiples.
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High growth projects**:** 10–15× revenue
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Slower/lower growth projects**:** 5–10× revenue
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Stargate’s revenue growth has been declining over the past 12 months, making a ~7× multiple a reasonable starting point for an offer.
For context, the public stock market (especially in the U.S.) is at all-time highs — with median multiples around 30×, driven heavily by AI stocks. Crypto M&A does not trade at those levels because revenue is still narrow and highly variable.
However, valuation is about payback period and how much long-term revenue growth a buyer believes they can capture. With the entrance of Wormhole, we can easily see a bidding war that drives up multiples - a big win for token holders. As of yesterday, STG traded at $0.1772 which is an expected 6% premium over the original offer and 10x revenue.
| Multiple | EV (Revenue × Multiple) | Token Value (EV + Treasury) | Token Price |
|---|---|---|---|
| 7.24× | $15.64M | $110.64M | $0.1675 |
| 10× | $21.60M | $116.60M | $0.1765 |
| 12× | $25.92M | $120.92M | $0.1831 |
| 15× | $32.40M | $127.40M | $0.1929 |
| 30× | $64.80M | $159.80M | $0.2419 |
Strategic Upside Considerations
If Wormhole or any other buyer believes they can gain market share by owning Stargate, that means more revenue and possibly pricing power. For example, Stargate has significant volume on Arbitrum. Is this a market, Wormhole or other bidders want to enter or grow market share?
There may also be hidden revenue opportunities:
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Fee switches not turned on.
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Potential to adjust fee split between protocol and LPs.
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Fees on the stargate website or consumer apps.
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New products or integrations that monetize the messaging layer more deeply.
These upside levers would justify a higher multiple.
Alternative Pricing Mechanisms
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In consumer tech, valuations evolved to be based not just on revenue, but on users.
- Facebook popularized DAU (daily active users). Coinbase and others in crypto are now reporting MTA (monthly transacting accounts) which indicates a similar intent.
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In this model, market cap is a function of revenue potential per user — which may ultimately be a better measure for cross-chain infrastructure than just one way to protocol makes money today.
Other Considerations
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In all token like all equity deals, sellers generally can dictate a higher multiple than all cash deals.
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As this is a token swap and liquidity of tokens can vary widely and the potential for insider trading, setting an offer priced based on a premium on a 30d VWMA may be wise.
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An overview on the plan for the protocol and teams working on these protocols, will be critical for operational buy-in from bidders like Wormhole.
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IP and other assets owned by the DAO not living onchain may affect the valuation.
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Post-closing governance and risk mitigation may add risk here. See FEI-RARI token merger.
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Wormhole’s due diligence request is reasonable and token holders should push for disclosure. If this were a public company, the board would have a fiduciary duty to equity holders to pursue the best financial outcome.
Exit Market Fit
Like companies and their founders, protocols also need to find the right buyer. A buyer should align culturally and strategically on the big idea - what we call “Exit Market Fit”.
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What is Stargate’s vision? Is it simply to be the bridge for all onchain assets? If so, both LayerZero and Wormhole are natural fits.
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Or is there a more nuanced, unwritten promise — shared vision and alignment with LayerZero’s founding team?
Exit market fit isn’t just about price — it’s about cultural alignment, vision, and operational execution. Token holders should consider both numbers and narrative.”
Recommendations:
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Disclose everything (wallets, assets, revenue, veSTG).
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Delay the vote to attract additional bidders.
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Set a community-governed auction framework with VWMA-based pricing.
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Hire an independent M&A advisor.
Closing Thought
The numbers tell us this offer values Stargate at ~7× revenue. That’s within reason, given declining growth — but not the whole story. The ultimate question is: who can best unlock Stargate’s strategic upside, align with its long-term vision, and fairly capture the value of its treasury, protocol, and community?
Regardless of whether Wormhole submits a bid, the community and controlling voting interests can and should negotiate. This is your deal to decide.
P.S. - Relayzero is not your attorney, financial, or tax advisor. The analysis provided herein is for informational and educational purposes only. Relayzero and its team hold no STG, ZRO, W or related tokens as of this post.
WATCH Unchained Live Analysis with Laura Shin, David Nage (Arca), and Lawson Bae (Relayzero) - HERE