LayerZero’s $110M Buyback Gets Green Light, Stargate Investors Challenge Pricing

LayerZero Foundation has unveiled a $110 million buyback plan, aiming to repurchase 50 million

tokens from its early supporters. This initiative represents a major move to strengthen its ecosystem and refocus project governance. The plan, described in a 24 August 2025 update, includes swapping Stargate’s tokens for ZRO at a conversion rate of 1 STG = 0.08634 ZRO, effectively integrating Stargate’s cross-chain liquidity capabilities into LayerZero’s network. The buyback and swap proposal was approved by 88.6% in a contentious governance poll, surpassing a competing $120 million cash offer from Wormhole. This step seeks to unify fees and user activity under ZRO, though some STG holders argue the valuation undervalues Stargate given its $4 billion bridging volume in July.

The buyback announcement sparked swift market movement, sending both STG and ZRO prices higher. After the news, ZRO surged by over 20%, fueled by expectations that Stargate’s annual revenue of more than $20 million would now support ZRO buybacks. Observers noted ZRO could gain from limited token supply, as protocol fees—estimated at $0.01 per transaction—will be burned using a Treasury Contract. This approach is designed to align user incentives with the protocol’s long-term sustainability, a central focus in LayerZero’s governance plans.

Integrating Stargate’s technology is anticipated to broaden ZRO’s use cases. More than $70 billion in Stargate bridge volume will now flow through LayerZero’s platform, consolidating governance under ZRO and channeling future Stargate income toward token buybacks. However, some challenges remain. STG investors have raised issues with the swap rate, claiming it does not reflect Stargate’s market worth. Additionally, the deal’s completion depends on ongoing DAO support, requiring 70% of veSTG holders to approve the measure.

LayerZero’s growth strategy reaches beyond the Stargate deal. Its partnership on 20 August 2025 with Wyoming’s state-backed FRNT stablecoin highlights potential for broad enterprise adoption. The FRNT stablecoin, backed by USD and Treasuries with 2% overcollateralization, now operates on seven blockchains through LayerZero’s omnichain system, with plans for listing on Kraken. This alliance could increase protocol fees from institutional trades, but FRNT’s adoption is contingent on regulatory developments under the GENIUS Act.

Unpredictable markets and tokenomics concerns still exist. In 2025, ZRO will see a $46 million token unlock, amounting to 23% of its circulating supply, which could add selling pressure. The rise of airdrop scams exploiting LayerZero’s popularity is also alarming, with Chainalysis reporting $12.5 billion in crypto scam losses in 2025, including phishing schemes linked to LayerZero. Despite these obstacles, LayerZero’s brand reputation remains strong, and the project encourages using official channels for claim verification.

The buyback reflects larger patterns in digital assets, such as institutional engagement and cross-chain integration. Corporate

holdings and new spot ETF offerings indicate rising institutional trust in cryptocurrencies—an opportunity intends to seize with its governance and liquidity tactics. Although short-term volatility and token unlocks pose risks, ZRO’s long-term success will depend on the effective rollout of its buyback strategy and the smooth merger of Stargate’s infrastructure.