LayerZero Proposes $110 Million Stargate Buyout: Here’s What You Need to Know
LayerZero’s $110 million proposal to absorb Stargate and retire STG tokens could reshape governance, tokenomics, and the future of multi-token models—while igniting immediate market reactions.
A proposal to merge LayerZero & Stargate has been put forward, with all STG tokens to be swapped for ZRO.
The merger of these two projects could serve as a warning sign for other multi-token and sub-DAO models.
What the LayerZero-Stargate Deal Means for Token Holders
The LayerZero Foundation has officially proposed to acquire Stargate and the STG token. The estimated value is USD 110 million.
Under the proposal, each STG token will become redeemable for 0.08634 ZRO through a fixed-rate redemption contract, based on ZRO’s market price of $1.94 at the time of proposal.
If approved, STG will cease its operational role, and LayerZero will dissolve Stargate DAO. LayerZero stated that any excess revenue from Stargate will be used to buy back ZRO. This buyback strategy has recently been observed in several major projects, including Chainlink.
In the long run, it could reduce ZRO’s circulating supply and alter its pricing/risk-return model.
According to the announcement, the proposal will also include a public discussion phase, followed by a three-day voting period on Snapshot. It requires a high approval threshold of 70%, with a quorum calculated based on the veSTG.
The proposal received both positive and negative views from the community. Some argue that managing two tokens simultaneously will cause the team to lose focus and become ineffective.
Others argued that the LayerZero & Stargate merger is inevitable. However, from their operating model, concepts such as multi-token setups and sub-DAOs may not deliver as much value as previously thought.
“Both projects have long been synonymous with each other. This proves: multi-token models; sub-daos and all of that bulls**t has always been inherently bearish for projects,” an X user commented.
One objection focused on the issue of the rights of current STG holders.
“The offers are not attractive at all. They do not offer any advantages to STG holders, and STG’s revenue sharing system is not available on ZRO. We will only be able to hold on to our tokens,” a user shared.
Nevertheless, the dissolution of Stargate DAO and its integration into a larger foundation raises questions about centralized governance. Moreover, the swap mechanism, the redemption contract’s open period, and the benefits for veSTG/stakers could decide whether the LayerZero & Stargate merger deal is approved.
ZRO & STG Price Performance. Source:
The market reacted instantly following the merger announcement. STG and ZRO have surged sharply, currently trading at $0.1942 (+17%) and $2.44 (+22%), respectively. These short-term price movements reflect both merger expectations and the immediate reactions of market makers.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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