LayerZero Stargate Acquisition Triumphs Despite $120M Rival Bids

The LayerZero Stargate acquisition has been officially approved, with the Stargate DAO voting overwhelmingly in favor of a $120 million deal, cementing one of the largest DAO takeovers in crypto to date.

Nearly 95% of votes supported the proposal, despite last-minute competing offers from Wormhole, Axelar, and Across.

The Deal at a Glance

Under the terms, the Stargate DAO will be dissolved, and holders of the STG token can swap their assets for LayerZero’s ZRO tokens at a ratio of 1 STG : 0.08634 ZRO. This values the acquisition around $120 million at current market prices.

Originally, veSTG holders who locked tokens for bridge fee revenue risked losing their yield income. But LayerZero revised its terms to appease concerns, offering veSTG holders 50% of Stargate’s top-line revenue for six months. Afterward, all excess revenue will fund a ZRO token buy-and-burn program to drive long-term value.

Wormhole, Axelar, and Across Enter the Fray

As the vote neared conclusion, the Wormhole Foundation shocked the community with a rival $120 million cash offer, backed by USDC stablecoins already secured in a wallet. Wormhole urged Stargate to delay its decision for at least five days to consider the bid.

Cross-chain protocols Axelar and Across also expressed interest in joining the bidding war if the vote were paused. Across co-founder Hart Lambur argued that “rushing an 11th-hour proposal” was against holders’ best interests, while Axelar signaled it was preparing its own offer.

Despite these late challenges, the vote finalized Saturday night, sealing LayerZero’s victory.

Strategic Value and Industry Firsts

LayerZero Labs CEO Bryan Pellegrino framed the outcome as both a strategic expansion and an industry milestone:

“Stargate’s return gives the LayerZero ecosystem a clear access point to the end-consumer, an immediate revenue-generating asset, and a clear focus on accelerating the velocity of value transfer.”

The deal is being hailed as “one of, if not, the first private acquisitions of a DAO over $100M.”

Market Impact

Launched by LayerZero in 2022, Stargate has long been a leader in cross-chain bridging. However, the STG token has lagged competitors like Wormhole and Axelar in terms of market cap. Now, STG will be retired in favor of ZRO, which is currently trading at $2.13, up 2.3% over the past 24 hours.

While the LayerZero Stargate acquisition secures LayerZero’s dominance in interoperability, critics argue the rushed process may have cut off holders from fully evaluating alternative offers.