TLDR
- LayerZero Foundation proposes $110 million acquisition of Stargate Finance, merging both protocols under one token
- All STG tokens would convert to ZRO at a fixed rate of 1 STG to 0.08634 ZRO, ending STG as standalone token
- Stargate’s current staking program generating $939,000 in quarterly payouts would be eliminated
- Both ZRO and STG tokens jumped over 20% following the announcement
- STG holders express concerns about unfair valuation and loss of staking rewards
LayerZero Foundation has announced plans to acquire Stargate Finance for $110 million in an all-token transaction. The proposal would consolidate two major cross-chain protocols under a single governance structure.
The LayerZero Foundation has proposed an acquisition of Stargate (STG).
Bring the Bridge Home. pic.twitter.com/OfB4eV2r96
— LayerZero (@LayerZero_Core) August 10, 2025
The merger would convert all STG tokens into ZRO at a fixed rate of 1 STG to 0.08634 ZRO. This exchange rate effectively values the entire Stargate ecosystem at $110 million based on current market prices.
Stargate Finance was originally developed by the same team behind LayerZero in 2022. Both protocols share cofounders and have maintained close operational ties since Stargate’s launch.
The acquisition would bring Stargate back under LayerZero’s direct control. LayerZero positions this move as streamlining operations and reducing redundancy between the two platforms.
Stargate operates as a cross-chain bridge allowing users to transfer digital assets between different blockchains. The platform uses liquidity pools instead of traditional bridge mechanisms, which LayerZero claims offers better security.
The protocol has generated $939,000 in revenue payouts to STG stakers over the past three months. This revenue stream currently provides fixed yields to users who lock their STG tokens in the staking program.
Under the proposed merger, Stargate’s bridge revenues would flow directly to the LayerZero Foundation. ZRO holders would benefit through potential token buybacks funded by these revenue streams.
Changes to Token Economics
The merger would eliminate Stargate’s current staking program entirely. STG holders currently receive regular payouts from bridge fees generated by the platform.
Former STG holders would instead participate in LayerZero’s token economy without dedicated staking yields. The new structure would focus all governance and utility functions on the ZRO token.
LayerZero CEO Bryan Pellegrino stated the merger would help both platforms “move faster, ship faster.” He emphasized that consolidation would provide clearer direction and more resources for development.
Community Response and Market Impact
Both tokens saw immediate price increases following the announcement. ZRO gained over 23% in 24 hours, while STG rose approximately 16.5% during the same period.
Despite recent gains, both tokens remain well below their historical peaks. ZRO trades 67% below its December high of $7.47, while STG has fallen over 95% from its 2022 peak of $4.14.
Community feedback has been mixed, with many STG holders expressing concerns about the proposed exchange rate. Several community members argue the swap ratio undervalues STG relative to its revenue generation and historical performance.
Token Holder Concerns
STG holders have raised specific objections to the merger terms. Many cite the loss of staking income as a primary concern, noting that ZRO does not offer equivalent yield opportunities.
Some community members have called for improved terms or alternative compensation mechanisms. Others suggest the exchange rate should be closer to 1:1 based on Stargate’s revenue potential.
The proposal will remain open for community comment for seven days. Stargate’s decentralized autonomous organization will then vote on whether to approve the acquisition terms.
