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LayerZero Foundation's proposal to acquire Stargate has garnered over 97% support, with voting ending on August 24. The acquisition is virtually certain. The buyout price is set at $0.1675 per STG token, with 1 ZRO = 0.08634 STG, and plans are underway to merge Stargate DAO into the ZRO-driven economy.
Analysis of the Biggest Beneficiaries
LayerZero and ZRO holders stand to gain the most from this acquisition. The deal is structured as a liquidity acquisition using LayerZero’s native token, while Stargate’s annual revenue of $1.74 million will be used to repurchase ZRO, enhancing its utility.
In contrast, STG and veSTG holders receive limited benefits—only six months of revenue compensation—and the recent rise in ZRO’s price has reduced the effective discount for STG holders.
Dissatisfaction Among STG Holders
Key concerns include the fairness of the acquisition premium, the dilemma faced by token holders (whether to sell or accept low returns), and insufficient incentives for veSTG holders (who face an average lock-up period of one year but receive only six months of compensation).
Some STG holders have demanded a 1:1 exchange for ZRO, but LayerZero considers this unreasonable, as it would require committing its entire Fully Diluted Valuation (FDV) to acquire Stargate, which currently generates modest revenue.
Potential for a Win-Win Outcome
Stargate relies on LayerZero’s infrastructure, and the acquisition could allow it to leverage LayerZero’s technical and financial resources to expand its functionality.
However, LayerZero must carefully address the interests of STG holders to avoid alienating potential loyal users. This acquisition is not predatory; at this stage, LayerZero’s gains far exceed those of Stargate token holders.
Original Author: matt
Compiled by: Odaily Planet Daily Golem
Editor’s Note:
On the morning of August 18, LayerZero Foundation began voting on the proposal to acquire Stargate. With a current approval rate of 97.09% and voting set to conclude on August 24, the acquisition appears inevitable. The key question now is: who benefits the most?
Proposal Overview
LayerZero aims to acquire Stargate tokens and its treasury (which backs each STG token at $0.1444), effectively dissolving Stargate DAO and integrating it into the ZRO-driven economy. The acquisition price is $0.1675 per STG, with 1 ZRO = 0.08634 STG.
The proposal follows standard procedures, requiring at least 1.2 million votes and a 70% quorum for approval. If passed, any excess revenue generated by Stargate will be used to repurchase ZRO, reducing its circulating supply.
Who Benefits the Most?
LayerZero and ZRO holders emerge as the primary beneficiaries:
The acquisition is structured as a liquidity buyout using LayerZero’s native token, offering a 16% premium over the treasury-backed STG price while expanding the ZRO holder base.
Stargate’s annual revenue of $1.74 million (per DefiLlama) will be used to repurchase ZRO on the open market.
The integration aligns ZRO tokenomics with LayerZero’s cross-chain expertise, enhancing utility through buybacks.
STG and veSTG holders, however, receive minimal benefits. Due to ZRO’s recent price appreciation, the effective discount for STG holders has shrunk. After discussions, LayerZero decided to compensate veSTG holders with six months of Stargate’s revenue, as they cannot unlock their tokens before the lock-up period ends.
Complaints from STG Holders
The situation hinges on compromise. While LayerZero poised to gain significantly, STG holders are left dissatisfied. Key issues include:
The appropriateness of the acquisition premium for STG tokens.
The dilemma for STG holders: sell tokens permanently or opt for a safer but low-yield alternative.
Inadequate incentives for veSTG holders, who face an average one-year lock-up but receive only six months of compensation.
Some STG holders demanded a 1:1 exchange for ZRO, but this is unrealistic—it would imply an immediate 12x return, requiring LayerZero to commit its entire FDV to acquire a company with solid funding but limited current revenue.
A Potential Win-Win
While LayerZero should reconsider the premium for STG holders and offer better revenue-sharing for stakers, the acquisition is not catastrophic for Stargate.
Stargate DAO relies on revenue and token issuance for funding. With STG down over 95% from its all-time high and annual revenue at just $2 million, Stargate has limited room for expansion. Its dependence on LayerZero’s infrastructure makes the acquisition a logical step, enabling it to leverage LayerZero’s stack and funding to deliver and scale more features.
The acquisition makes sense for Stargate, but LayerZero’s ability to retain STG holders’ loyalty will depend on how it handles their concerns. Otherwise, it risks losing a large group of potential loyal ZRO holders and Stargate stakeholders who have supported the project from its inception.
This is not a predatory acquisition; LayerZero’ current gains far exceed those of STG and veSTG token holders.
LayerZero Foundation's proposal to acquire Stargate has garnered over 97% support, with voting ending on August 24. The acquisition is virtually certain. The buyout price is set at $0.1675 per STG token, with 1 ZRO = 0.08634 STG, and plans are underway to merge Stargate DAO into the ZRO-driven economy.
Analysis of the Biggest Beneficiaries
LayerZero and ZRO holders stand to gain the most from this acquisition. The deal is structured as a liquidity acquisition using LayerZero’s native token, while Stargate’s annual revenue of $1.74 million will be used to repurchase ZRO, enhancing its utility.
In contrast, STG and veSTG holders receive limited benefits—only six months of revenue compensation—and the recent rise in ZRO’s price has reduced the effective discount for STG holders.
Dissatisfaction Among STG Holders
Key concerns include the fairness of the acquisition premium, the dilemma faced by token holders (whether to sell or accept low returns), and insufficient incentives for veSTG holders (who face an average lock-up period of one year but receive only six months of compensation).
Some STG holders have demanded a 1:1 exchange for ZRO, but LayerZero considers this unreasonable, as it would require committing its entire Fully Diluted Valuation (FDV) to acquire Stargate, which currently generates modest revenue.
Potential for a Win-Win Outcome
Stargate relies on LayerZero’s infrastructure, and the acquisition could allow it to leverage LayerZero’s technical and financial resources to expand its functionality.
However, LayerZero must carefully address the interests of STG holders to avoid alienating potential loyal users. This acquisition is not predatory; at this stage, LayerZero’s gains far exceed those of Stargate token holders.
Original Author: matt
Compiled by: Odaily Planet Daily Golem
Editor’s Note:
On the morning of August 18, LayerZero Foundation began voting on the proposal to acquire Stargate. With a current approval rate of 97.09% and voting set to conclude on August 24, the acquisition appears inevitable. The key question now is: who benefits the most?
Proposal Overview
LayerZero aims to acquire Stargate tokens and its treasury (which backs each STG token at $0.1444), effectively dissolving Stargate DAO and integrating it into the ZRO-driven economy. The acquisition price is $0.1675 per STG, with 1 ZRO = 0.08634 STG.
The proposal follows standard procedures, requiring at least 1.2 million votes and a 70% quorum for approval. If passed, any excess revenue generated by Stargate will be used to repurchase ZRO, reducing its circulating supply.
Who Benefits the Most?
LayerZero and ZRO holders emerge as the primary beneficiaries:
The acquisition is structured as a liquidity buyout using LayerZero’s native token, offering a 16% premium over the treasury-backed STG price while expanding the ZRO holder base.
Stargate’s annual revenue of $1.74 million (per DefiLlama) will be used to repurchase ZRO on the open market.
The integration aligns ZRO tokenomics with LayerZero’s cross-chain expertise, enhancing utility through buybacks.
STG and veSTG holders, however, receive minimal benefits. Due to ZRO’s recent price appreciation, the effective discount for STG holders has shrunk. After discussions, LayerZero decided to compensate veSTG holders with six months of Stargate’s revenue, as they cannot unlock their tokens before the lock-up period ends.
Complaints from STG Holders
The situation hinges on compromise. While LayerZero poised to gain significantly, STG holders are left dissatisfied. Key issues include:
The appropriateness of the acquisition premium for STG tokens.
The dilemma for STG holders: sell tokens permanently or opt for a safer but low-yield alternative.
Inadequate incentives for veSTG holders, who face an average one-year lock-up but receive only six months of compensation.
Some STG holders demanded a 1:1 exchange for ZRO, but this is unrealistic—it would imply an immediate 12x return, requiring LayerZero to commit its entire FDV to acquire a company with solid funding but limited current revenue.
A Potential Win-Win
While LayerZero should reconsider the premium for STG holders and offer better revenue-sharing for stakers, the acquisition is not catastrophic for Stargate.
Stargate DAO relies on revenue and token issuance for funding. With STG down over 95% from its all-time high and annual revenue at just $2 million, Stargate has limited room for expansion. Its dependence on LayerZero’s infrastructure makes the acquisition a logical step, enabling it to leverage LayerZero’s stack and funding to deliver and scale more features.
The acquisition makes sense for Stargate, but LayerZero’s ability to retain STG holders’ loyalty will depend on how it handles their concerns. Otherwise, it risks losing a large group of potential loyal ZRO holders and Stargate stakeholders who have supported the project from its inception.
This is not a predatory acquisition; LayerZero’ current gains far exceed those of STG and veSTG token holders.
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