LayerZero Proposes $110M Stargate Acquisition, Token Swap Sparks Mixed Reactions
The LayerZero Foundation has proposed acquiring cross-chain liquidity protocol Stargate in a $110 million deal that would see Stargate’s token (STG) swapped for LayerZero’s native token (ZRO).
The LayerZero Foundation has proposed acquiring cross-chain liquidity protocol Stargate in a $110 million deal that would see Stargate’s token (STG) swapped for LayerZero’s native token (ZRO).
The announcement has boosted the prices of both assets but also triggered backlash from some STG holders.
LayerZero unveiled the plan on Stargate’s governance forum on Sunday, describing it as a move to “accelerate” development and bring Stargate back under its umbrella. Stargate was originally launched by LayerZero in 2022 to enable native asset transfers between blockchains without relying on traditional, hack-prone bridges.
The LayerZero Foundation has proposed an acquisition of Stargate (STG).
Bring the Bridge Home. pic.twitter.com/OfB4eV2r96
— LayerZero (@LayerZero_Core) August 10, 2025
Under the proposal, STG would be exchanged at a rate of 1 STG for 0.08634 ZRO. The foundation argues that consolidating the two tokens would streamline operations, expand Stargate’s scope beyond bridging, and provide more liquidity for STG holders.
The market reacted positively, with ZRO climbing over 23% in 24 hours to $2.44 and STG rising 16.5% to $0.198, according to CoinGecko. Still, both tokens remain far below their peaks—ZRO is down 67% from its December 2024 high of $7.47, while STG has fallen over 95% from its mid-2022 top of $4.14.
LayerZero CEO Bryan Pellegrino said the merger would help the project “move faster” and deliver on its roadmap, while offering the Stargate community “a clear path forward with significantly more resources and a single unified direction.”
However, several Stargate tokenholders criticized the deal, calling the exchange rate “unfair” and noting that ZRO does not offer STG’s revenue-sharing or staking benefits. Some suggested the offer should be significantly higher—potentially a 1:1 swap—given Stargate’s revenue potential. Others acknowledged the benefits of a unified token but still objected to the loss of staking rewards.
The proposal is open for community feedback for the next seven days, after which Stargate’s decentralized autonomous organization (DAO) will vote on whether to approve the acquisition.
Meanwhile, The Wyoming Stable Token Commission partnered with LayerZero to develop and distribute the state’s official stablecoin.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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