The LayerZero Foundation has put forward a significant proposal to acquire Stargate Bridge for US$110 million (approximately AU$168 million). This acquisition plan aims to transition ownership and governance of Stargate Bridge from the community-led STG token holders to the LayerZero Foundation, resulting in the complete dissolution of Stargate’s decentralised autonomous organisation (DAO).
If approved by the holders of STG tokens, the new framework would mean that current STG token holders would have the opportunity to exchange their tokens for LayerZero’s native ZRO token at a rate of 1 STG to 0.08634 ZRO, equivalent to US$0.1675 per STG and US$1.94 per ZRO.
### Background on Stargate Bridge
Launched in March 2022 by LayerZero Labs, Stargate Bridge gained traction early on, with its STG token hitting an all-time high of US$4.14 within weeks of its launch. However, the token’s value has since seen a drastic decline, dropping over 95% to about US$0.1677, despite the bridge facilitating more than US$70 billion in cross-chain swaps, which LayerZero Foundation still regards as the highest usage in the industry.
The acquisition also includes a provision for any excess revenue generated by Stargate Bridge to be redirected into a buyback program for ZRO, intended to support the token’s market value by reducing its circulating supply.
### Rationale Behind the Acquisition
LayerZero’s proposal aims to enhance the operational efficiency of Stargate Bridge, with co-founder and CEO Bryan Pellegrino asserting that the DAO’s current governance structure slows down decision-making processes and progress. “We want to move faster and help Stargate execute its ambitious roadmap,” Pellegrino stated, envisioning a streamlined operational model under LayerZero’s control.
### Community Response
The proposal has elicited mixed reactions within the Stargate community. Some community members have voiced concerns regarding the fairness and attractiveness of the offer. Critics argue that the compensation being offered does not adequately reflect the historical value of STG. One community member articulated dissatisfaction, noting that the proposal does not offer compelling advantages, while another emphasised that the valuation of STG tokens in the offer felt significantly low compared to the token’s previous highs.
Conversely, some supporters acknowledge the need for a unified token focus and see potential benefits in moving towards ZRO as the primary operational currency for the project. Despite this, even supportive voices warn that the STG token appears undervalued in the context of the proposal.
### Voting Process and Future Implications
The proposal is currently undergoing a 10-day discussion phase, post which STG token holders will vote. For the proposal to pass, it requires a daunting threshold of 70% approval from participants. Given the apparent division in community sentiment, achieving this consensus may prove challenging.
### Conclusion
This proposed acquisition represents a pivotal moment for both Stargate Bridge and its stakeholders, raising questions about governance, valuation, and future strategic direction. As the community deliberates on the merits of this plan, the outcome will shape the trajectory of Stargate Bridge and its integration within LayerZero’s broader ecosystem. Thus, the coming days will be crucial in determining whether the transition to LayerZero will be embraced or resisted by the STG community.
