TLDR
- LayerZero Foundation has proposed acquiring Stargate (STG) for $110 million in an all-token deal
- The plan would convert all STG tokens to ZRO at a fixed rate of 1 STG to 0.08634 ZRO
- Both tokens have seen price increases of over 20% in 24 hours following the announcement
- Community feedback has been mixed, with many STG holders criticizing the swap ratio and loss of staking rewards
- If approved, the merger would consolidate cross-chain infrastructure under a single token economy
LayerZero Foundation has proposed a $110 million acquisition of Stargate Finance, aiming to merge the STG token economy into the LayerZero ecosystem. The plan would convert all STG tokens into ZRO at a fixed rate, effectively ending Stargate’s standalone governance and rewards system.
The proposal was announced on August 10, 2025, through LayerZero’s official channels and Stargate’s community forum. This move would bring Stargate back under the LayerZero umbrella, as Stargate was originally developed and launched by LayerZero in 2022.
The LayerZero Foundation has proposed an acquisition of Stargate (STG).
Bring the Bridge Home. pic.twitter.com/OfB4eV2r96
— LayerZero (@LayerZero_Core) August 10, 2025
Under the proposed terms, STG tokens would be swapped for ZRO at a rate of 1 STG to 0.08634 ZRO. This conversion would retire STG as a separate token, consolidating both protocols’ cross-chain infrastructure under a single asset.
The news has had a major impact on both tokens’ prices. LayerZero’s ZRO token has gained over 23% in the past 24 hours to trade at around $2.44, while Stargate’s STG token saw 24-hour gains of approximately 16.5%, trading at just over 19 cents.
Community Reaction
The proposal has received mixed feedback from the Stargate community. Many STG token holders have expressed concerns about the swap ratio and the loss of staking benefits.
Stargate’s bridge operations generated $939,000 in payouts to STG stakers over the past three months. After the merger, these revenues would flow directly to the LayerZero Foundation instead of STG holders. The plan would eliminate Stargate’s current staking program, ending fixed-yield payouts to locked 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,” one Stargate user wrote in the forum.
Other community members suggested that LayerZero should improve the terms, possibly offering a 1:1 token swap due to “the amount of revenue Stargate makes and the potential for the protocol.”
Strategic Rationale
LayerZero co-founder and CEO Bryan Pellegrino explained the strategic rationale behind the proposal on social media. He stated that he wants “to move faster, ship faster” and believes the merger would “help Stargate execute on its ambitious roadmap while creating a single stack that anybody integrating within the LayerZero ecosystem can adopt.”
Pellegrino added that the deal would give STG holders “a more liquid token” and would provide the Stargate community “a clear path forward with significantly more resources and a single unified direction.”
The LayerZero Foundation has pitched the acquisition as “designed to accelerate both Stargate and LayerZero, giving Stargate the resources to ship on an aggressive roadmap that expands its prerogative outside of bridging.”
LayerZero also stated that combining the two tokens will make the system simpler, reduce overlap, and focus value in one asset.
Stargate allows users to transfer digital assets across blockchains using liquidity pools. The platform is designed to enable native asset transfers instead of relying on traditional blockchain bridges, which have a history of security vulnerabilities.
Both tokens remain well below their all-time highs. ZRO is down 67% from its December peak of $7.47, while STG has fallen over 95% from its mid-2022 high of $4.14.
The proposal will remain open for community comments for seven days. Following this period, Stargate’s decentralized autonomous organization (DAO), made up of token holders, will vote on whether to approve the deal.
The outcome of this proposal could set a precedent for how closely linked protocols navigate governance, valuation, and revenue redistribution in similar consolidations within the crypto ecosystem.
