Original | Odaily Planet Daily
Author | Azuma
The 'LayerZero Acquisition of Stargate' proposal, which had entered the formal voting process, suddenly changed.
On August 21, LayerZero's direct competitor, the Wormhole Foundation, announced on X that LayerZero's acquisition offer of approximately $110 million for Stargate underestimated the protocol's assets and growth. Therefore, Wormhole plans to submit a higher offer and requests to pause the current Snapshot voting for 5 working days to refine the bidding process, ensuring the interests of STG holders.
Background Summary: LayerZero Initiates Acquisition
The acquisition proposal by LayerZero for Stargate can be traced back to August 11 — see reference (LayerZero Proposes to Acquire Stargate: Token Prices 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 to acquire Stargate for a total price of $110 million.
Specifically, the LayerZero Foundation proposed to exchange all circulating STG (including STG in staking/voting status) at a ratio of 1 STG: 0.08634 ZRO for $0.1675 per STG (actually slightly higher than the market price at that time) and $1.94 per ZRO. After the acquisition is completed, 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 in a buyback plan to reduce the circulating supply of ZRO.
After the proposal was announced, LayerZero and Stargate's official Twitter accounts interacted frequently, both talking about 'cooperation and win-win'. As a result, on that day, both ZRO and STG surged, but upon closer inspection of the discussion content in Stargate's governance forum, the vast majority of Stargate members opposed the acquisition proposal, believing LayerZero's offer was too low.
Early Progress: Voting Initiated, Large Holders Overwhelming
On August 18, the proposal officially initiated voting on Snapshot, where STG holders will collectively decide whether to accept the acquisition offer. Compared to the initial proposal, LayerZero did not raise the acquisition price, but claimed it would share 50% of Stargate's total revenue over the next six months with veSTG holders (i.e., users directly voting).
After the voting was initiated, it not only quickly surpassed the minimum voting requirement but also saw support rates soar to over 97% (according to rules, it passes if over 70% at the end). LayerZero co-founder Bryan Pellegrino even proudly stated during a podcast with CounterParty: 'This is the most participated 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 protocol and frontend product, are very difficult to view as two independent entities, especially given that half of the Stargate Foundation's board members are from LayerZero... Coupled with the interaction language between LayerZero and Stargate, it is not difficult to imagine that both parties' stakeholders already control enough voting power; in plain terms, this is a vote that is 'destined to pass but needs a formality'.
Wormhole's Conspiracy: Even if they can't win, they still have to make you uncomfortable.
Perhaps even LayerZero and Stargate did not expect that Wormhole would intervene at such a critical moment.
As of the publication date, unlike the 'harmonious scene' with frequent interactions between the two parties after LayerZero's acquisition proposal, after Wormhole expressed interest in acquiring, Stargate's official Twitter did not publish any related updates, and LayerZero has only had co-founder Bryan seemingly respond: 'This cannot happen.'
As of the publication date, Wormhole has not made a formal offer, and the reason is quite amusing — Wormhole claims to need more time for due diligence on Stargate's valuation because they are not as familiar with Stargate as LayerZero, which is familiar enough to occupy half of the latter's foundation board seats...
Considering the current situation, the subsequent development of this incident will be one of the following four scenarios, and in any case, Wormhole will be pleased to see it.
The first scenario is that Stargate pauses the voting, then enters into bidding between Wormhole and LayerZero, assuming Wormhole wins. In this case, Wormhole would directly take away the core product of its biggest competitor, thereby capturing more market share.
The second scenario assumes LayerZero wins the bidding, or LayerZero unilaterally raises the offer and advances the proposal. In this case, LayerZero would pay more funds to STG holders, while Wormhole could watch their competitor expend more 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 continues to advance as is (currently still over 88% support). In this case, if LayerZero completes the acquisition, STG holders who missed out on a higher offer would inevitably be angry, and Wormhole would be pleased to see a community split on the LayerZero side.
The fourth scenario is that Stargate forcibly pushes the vote, assuming the proposal ultimately fails due to opposition from the Stargate community (currently still over 88% support, with a very low probability of failure), Wormhole's obstruction plan would succeed.
Overall, I personally tend to prefer 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.
Fluid COO DMH succinctly summarized the current situation: 'Clearly, Stargate and LayerZero had already reached an agreement before the proposal; Wormhole is very angry that LayerZero bought Singapore for a bag of rice; thus Wormhole chooses to raise the price, attempting to disrupt LayerZero's acquisition plan; but Stargate will ultimately be absorbed by LayerZero, this is well known in the market, so no dramatic situations will occur.'
Wormhole may have known the final outcome was predetermined even before making an offer, but just by talking they could make their biggest competitor extremely uncomfortable, while suffering no loss themselves; this move is simply a top-level conspiracy.
