LayerZero acquires Stargate in $120M deal, boosts cross-chain dominance
The LayerZero protocol team announced the acquisition of Stargate Finance for $120 million. The deal between the two protocols strengthens the joint project’s position in the cross-chain segment.
Stargate Finance (ranked 336th among cryptocurrencies by market capitalization) was created by the LayerZero team (ranked 149th) in 2021 but eventually became a decentralized autonomous organization (DAO). Thus, the current deal marks STG’s return to its roots.
Initially, LayerZero offered $110 million for Stargate, but Wormhole Foundation intervened, stating that the offer underestimated Stargate’s value and was unconvincing, adding that it was prepared to offer a higher bid.
Competition in the cross-chain market
As a result, LayerZero revised its offer, while Wormhole requested a five-day pause in voting to finalize its proposal and review Stargate’s financials. According to Cryptopolitan, Across Protocol and Axelar also showed interest in acquiring Stargate.
Nevertheless, 94% of Stargate DAO participants supported LayerZero’s revised $120 million proposal, which also included additional incentives such as a revenue distribution period for STG stakers.
Following the acquisition, LayerZero and Stargate will merge into a single project, with ZRO becoming the official token for both cross-chain protocols. Stargate DAO will be dissolved, and STG tokens will be exchanged for ZRO at a ratio of 1 STG to 0.08634 ZRO. Revenue from Stargate will also be allocated to ZRO buybacks.
“Stargate’s return provides the LayerZero ecosystem with a clear consumer access point, an immediately revenue-generating asset, and a strong focus on accelerating value transfer speed,” said LayerZero Labs CEO Bryan Pellegrino.
He added that the team had been working for years on infrastructure enabling cross-chain interoperability, and Stargate’s return would help enhance its services.
Stargate is one of the largest multichain bridges in the crypto ecosystem, connecting around 50 blockchain networks and facilitating over $70 billion in transactions.
This deal will further strengthen LayerZero’s dominance in blockchain interoperability. Data from Token Terminal shows that in the past 12 months, the company already controlled around 85% of the market share, with several companies including PayPal, BitGo, and Paxos using its services.
As we wrote, LayerZero enables PYUSD expansion to Ethereum, Solana for seamless transactions
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