Author: Azuma, Odaily Planet Daily
The proposal for 'LayerZero's acquisition of Stargate', which had entered the formal voting process, suddenly changed.
On August 21, Wormhole Foundation, a direct competitor of LayerZero, publicly announced on X that LayerZero's proposed acquisition bid of approximately $110 million for Stargate undervalued Stargate's protocol assets and growth. Therefore, Wormhole plans to submit a higher bid and requests a suspension of the current Snapshot vote for 5 working days to improve the bidding process and protect STG holders' interests.
Background summary: LayerZero initiates acquisition.
The acquisition proposal from LayerZero to Stargate can be traced back to August 11 - Reference reading (LayerZero proposes to acquire Stargate: both tokens surge over 20%, but this group strongly opposes).
In the early hours of the day, the LayerZero Foundation released a draft in Stargate's governance forum, proposing a total acquisition price of $110 million for Stargate.
Specifically, the LayerZero Foundation proposed to exchange all circulating STG (including STG in staking/voting status) for ZRO at a ratio of 1 STG: 0.08634 ZRO at the price of $0.1675 per STG (actually slightly higher than the market price at that time) and $1.94 per ZRO. After the acquisition, Stargate will be more deeply integrated into the LayerZero ecosystem, Stargate DAO will be dissolved, and all excess revenue generated by Stargate in the future will be used to reduce the circulating supply of ZRO through a repurchase plan.
After the proposal was announced, LayerZero and Stargate's official Twitter accounts frequently interacted, both talking about 'cooperation and win-win,' which led to a surge in both ZRO and STG that day. However, upon closer inspection of the discussions in Stargate's governance forum, the vast majority of Stargate members opposed the acquisition proposal, believing that LayerZero's offer was too low.
Early progress: voting initiated, large holders overpower.
On August 18, the proposal officially launched voting on Snapshot, and STG holders will jointly decide whether to accept the acquisition offer. Compared to the original proposal, LayerZero did not raise the acquisition bid, but claimed it would share 50% of Stargate's total revenue over the next six months with veSTG holders (i.e., users who vote directly).
After the voting started, it not only quickly surpassed the minimum voting requirement, but the support rate also surged to over 97% (according to the rules, over 70% at the end means passing). LayerZero co-founder Bryan Pellegrino even proudly stated during a podcast for CounterParty, 'This is the highest participation vote in Stargate's history.'
Such a one-sided voting pattern is not surprising. Although many Stargate community members oppose the offer, LayerZero and Stargate, as fully integrated backend protocols and frontend products, are difficult to view as two independent entities, especially since half of Stargate's foundation board members are from LayerZero... Considering the interaction language between LayerZero and Stargate, it is not hard to imagine that both parties control enough voting power. In simple terms, this is a vote that is 'destined to pass, but requires a formality.'
Wormhole's ulterior motive: even if it can't take action, it still has to make things unpleasant for you.
Perhaps neither LayerZero nor Stargate expected Wormhole to intervene at such a critical moment.
As of the publication, unlike the 'harmonious scene' of frequent interactions between both parties after LayerZero's acquisition proposal, after Wormhole expressed interest in acquiring, Stargate's official Twitter did not post any related updates, and LayerZero's co-founder Bryan only allegedly responded with, 'This can't happen.'
As of the publication, Wormhole has not made a formal offer, and the reason is somewhat amusing - Wormhole claims it needs more time to conduct due diligence on Stargate's valuation because they are not as familiar with Stargate as LayerZero, who occupies half of the board seats of the latter's foundation...
Based on the current situation, the subsequent developments of this event can be categorized into four scenarios, and in any case, Wormhole would be pleased.
The first scenario is that Stargate pauses the vote, then enters a bidding war between Wormhole and LayerZero, ultimately assuming Wormhole wins. In this case, Wormhole would directly seize the core product of its biggest competitor, thereby capturing more market share.
The second scenario assumes LayerZero wins the bid, or LayerZero unilaterally raises the offer and advances the proposal. In this case, LayerZero would pay more funds to STG holders, and Wormhole would watch its competitor exhaust more resources without spending a dime.
The third scenario is that Stargate ignores Wormhole's offer on the grounds that the process has already started, and the proposal will continue to advance as it is (currently still over supported). If LayerZero completes the acquisition, those who missed out on a higher offer for STG will inevitably be angry, and Wormhole would be happy to see community division on LayerZero's side.
The fourth scenario is that Stargate forcibly pushes for a vote, assuming the proposal ultimately fails due to opposition from the Stargate community (currently support is still over 88%, so the possibility of failure is extremely low), Wormhole successfully obstructs the plan.
Overall, I personally lean more towards the second and third scenarios, as Stargate is a core product of LayerZero, which absolutely does not want to bear the consequences of losing that product.
DMH, COO of Fluid, succinctly summarized the current situation: 'Clearly, Stargate and LayerZero had reached an agreement before the proposal; Wormhole is very angry that LayerZero bought Singapore for a bag of rice; therefore, Wormhole chose to raise the price, trying to disrupt LayerZero's acquisition plan; but Stargate will ultimately be absorbed by LayerZero, which the market is well aware of, so there will be no dramatic situations.'
Wormhole may have already known the final result was predetermined before making the offer, but just by speaking, it could make its biggest competitor extremely uncomfortable, with no loss to itself. This move is simply a top-tier ulterior motive.
