LayerZero Acquires Stargate: $120M DAO Buyout Explained

LayerZero Acquires Stargate, Beats Rival Wormhole Bid

LayerZero Acquires Stargate: A Landmark Crypto Deal Worth $120 Million

The decentralized governance body behind Stargate Finance has officially approved an acquisition by the LayerZero Foundation, the team behind one of the industry’s most innovative interoperability protocols. This development is big for the cross-chain ecosystem, bringing together two well-known names and giving users and investors plenty to discuss in crypto market.

Source : X

What’s interesting is that this isn’t a typical acquisition—it’s a reunion. Stargate was created by Layer Zero in 2022 but later became its own decentralized autonomous organization (DAO). Now, again Layerzero acquires Stargate, and the community has given the green light.  The company has posted on twitter that its going back to home. 

Source : Twitter 

What’s in the Deal? Breaking Down the Token Swap

Here’s what the deal looks like: the financial firm’s DAO voted overwhelmingly—almost 95% in favor—to approve the acquisition. Under the plan, it will dissolve its DAO, and STG token holders will be able to exchange their tokens for ZRO, LayerZero’s native token, at a rate of 1 STG = 0.08634 ZRO. To make things fair for existing users, Layerzero acquires Stargate and sweetened the deal.

Source : X

One of the biggest concerns was from veSTG holders, who had locked their tokens to earn yield from its fees. The initial plan would have cut off that income, but the firm has adjusted the offer: for six months after the vote, veSTG holders will receive 50% of company’s revenue. After that, revenue will be used to buy back and burn ZRO tokens, which could reduce supply and potentially support its value.

This is a big reason why LayerZero acquires Stargate and won overwhelming support it wasn’t just a buyout, it was a community support.

Rival Bids and Last-Minute Drama 

This acquisition wasn’t without suspense. Just before voting closed, Wormhole, a competitor in the cross-chain space—tried to throw a wrench into the plan. It put forward a competing $120 million cash offer, even moving USDC funds to a separate wallet to show it was serious. Axelar and Across, two other interoperability players, also hinted they would be interested if there was time to make a proper bid.  

Despite those offers, the community stayed with the original creators. It wasn’t just about money; it was about trust and continuity. As Across co-founder Hart Lambur noted, a rushed bidding process wasn’t ideal, but the community chose not to delay. The vote wrapped up, and LayerZero acquires Stargate officially, leaving Wormhole and others on the sidelines.  

What’s Next for ZRO Tokens?  

Despite the Layerzero acquires Stargate news the token fell 2.5% in the last 24hr. The coin is now trading at $2.05, and has raised 24hr trading volume by 96% with $93M. According to coinmarketcap there is 87% bullish sentiment among traders representing the acceptance of the proposal. 

Source : Coinmarketcap

The low may indicate acquisition uncertainty as the investors are still figuring out the changes done in the approved proposal. Technical breakout and market sentiments are also a key factor in token’s price drop.  It is trading between $1 to $2 from past months and, if the token can break a resistance level of $2.3 then there are chances to see a massive surge above $5 by the end of this year.