LayerZero Reclaims Stargate in $110 Million Acquisition Deal Approved by Token Holders

Community Overwhelmingly Backs Acquisition Despite Last-Minute Rival Bids

In a landmark decision reflecting robust community governance in the blockchain space, Stargate token holders have overwhelmingly approved a $110 million acquisition offer from LayerZero Foundation, returning the cross-chain liquidity protocol to its original developer. The Sunday vote saw approximately 95% of participants supporting the deal, concluding what had evolved into an unexpected multi-party bidding contest in the decentralized finance sector.

The acquisition represents one of the most significant community-approved blockchain protocol transactions of the year, with more than 15,000 wallet addresses participating in the governance process—a record turnout according to Bryan Pellegrino, LayerZero’s co-founder. The final tally showed 7.2 million STG tokens (94.76% of voting stake) in favor of the acquisition, with just 399,400 STG (5.24%) opposed.

“What we witnessed was unprecedented engagement from the Stargate community,” noted blockchain governance analyst Elena Martinez. “This level of participation demonstrates the maturing ecosystem of decentralized governance, where token holders actively shape the future of protocols they’re invested in.”

The Path to Agreement: How LayerZero Secured Community Support

The approved proposal represents a significant evolution from LayerZero’s initial offer, which many token holders criticized as undervaluing the protocol. Responding to community feedback, LayerZero revised key terms, particularly around token conversion rates and revenue sharing mechanisms.

Under the finalized agreement, all circulating Stargate (STG) tokens will be swapped for LayerZero’s ZRO tokens at a fixed ratio of 1 STG to 0.08634 ZRO. This exchange rate was carefully calibrated to reflect fair market value while providing liquidity for STG holders. Additionally, LayerZero incorporated a six-month revenue sharing program that favors existing stakers, addressing concerns about immediate post-acquisition value.

“The adjustment to include enhanced revenue sharing for current stakers was the turning point in garnering community support,” explained DeFi researcher Amir Goldstein. “LayerZero demonstrated willingness to negotiate in good faith, ultimately crafting terms that respected the value Stargate holders had built.”

Last-Minute Bidding War Highlights Stargate’s Strategic Value

What began as a straightforward acquisition proposal transformed into an unexpected bidding competition when three of LayerZero’s competitors entered the fray with competing offers. Wormhole made the most aggressive counter-move, proposing a $120 million all-cash deal and formally requesting that the LayerZero vote be delayed to allow for proper consideration of alternatives.

Meanwhile, cross-chain communication protocols Axelar and Across also expressed interest, indicating they would submit competitive offers if given the opportunity through a more structured bidding process. Despite these eleventh-hour developments, the Stargate community proceeded with the scheduled vote on LayerZero’s proposal.

Industry observers note that this unexpected competition underscores the strategic importance of Stargate’s technology in the cross-chain interoperability landscape. “This last-minute bidding war reveals just how valuable Stargate’s liquidity protocol has become to the broader cross-chain ecosystem,” said blockchain strategist Sophia Williams. “The interest from multiple major players confirms that secure cross-chain liquidity remains one of the most critical infrastructure components for blockchain interoperability.”

Reunification: LayerZero Brings Stargate Back Into Its Ecosystem

The acquisition effectively returns Stargate to its creator’s fold, as LayerZero originally developed and launched the protocol in 2022. This reunification represents a significant strategic advantage for LayerZero as it competes in the increasingly important cross-chain messaging and liquidity sector.

Stargate has distinguished itself in the blockchain bridge space by pioneering a native asset transfer approach using specialized liquidity pools. This methodology offers potential security advantages over traditional bridging technologies, which have suffered from high-profile security breaches resulting in hundreds of millions in losses. By leveraging Stargate’s technology, LayerZero strengthens its position in facilitating secure cross-chain transactions—a capability increasingly demanded as blockchain ecosystems diversify.

“Bringing Stargate back under LayerZero’s development umbrella creates natural synergies,” explained blockchain architect Marcus Chen. “The integration allows for more seamless coordination between messaging and liquidity layers, potentially accelerating innovation in cross-chain functionality while maintaining Stargate’s unique security attributes.”

What’s Next for STG Token Holders and the Combined Protocol

With the acquisition approved, Stargate token holders now face a straightforward path forward. The token swap process will commence according to the timeline outlined in LayerZero’s proposal, with all circulating STG tokens being exchanged for ZRO at the specified ratio. Token holders are encouraged to review official communications regarding the mechanical process of this conversion.

The six-month revenue sharing program represents an immediate benefit for current stakers, providing continuity of returns during the transition period. Beyond this timeframe, the combined protocol aims to leverage LayerZero’s messaging capabilities with Stargate’s liquidity solution to create a more comprehensive cross-chain infrastructure.

“For STG holders, this represents both closure and a new beginning,” said DeFi analyst Regina Torres. “While the independent Stargate protocol chapter concludes, token holders gain exposure to LayerZero’s broader ecosystem and technology stack through their new ZRO positions.”

Implications for the Cross-Chain Infrastructure Landscape

The LayerZero-Stargate reunification arrives at a pivotal moment for blockchain interoperability. As the multi-chain paradigm continues to solidify, secure and efficient cross-chain communication and asset transfer mechanisms have become essential infrastructure for the broader cryptocurrency ecosystem.

This acquisition potentially strengthens LayerZero’s competitive position against rivals like Wormhole, Axelar, and Across in the cross-chain messaging and liquidity space. Each of these protocols offers different technical approaches to solving the interoperability challenge, and consolidation may help LayerZero accelerate development and adoption of its particular solution.

“The cross-chain infrastructure space is experiencing a period of intense competition and innovation,” noted blockchain economist Dr. Jonathan Wells. “LayerZero’s acquisition of Stargate signals confidence in a unified approach to messaging and liquidity, rather than treating these as separate protocol layers. This could influence architectural decisions across the industry if it proves successful.”

As blockchain ecosystems continue evolving toward greater interconnection, the reunification of LayerZero and Stargate represents not just a significant business transaction, but potentially a harbinger of further consolidation in the infrastructure layer of web3 technologies. For developers, users, and investors alike, the successful conclusion of this acquisition process opens a new chapter in the ongoing story of blockchain interoperability.