The blockchain messaging protocol LayerZero successfully bid to acquire the crypto protocol Stargate, despite initial uncertainty in their preliminary offer, culminating in a four-way bidding war.
The Stargate community voted on Sunday, with 95% supporting the $110 million acquisition proposal from the LayerZero Foundation, which was amended after STG token holders pointed out the unfairness of the original proposal.
Three competitors of LayerZero also submitted bidding intentions at the last moment, with Wormhole requesting to pause the vote on LayerZero, but this was unsuccessful.
LayerZero developed and launched Stargate in 2022, and this transaction now means the platform is back under its control. Stargate facilitates cross-chain asset transfers through liquidity pools instead of relying on blockchain bridges that are susceptible to hacks.
LayerZero claims the vote set a record.
LayerZero co-founder and CEO Bryan Pellegrino stated on the X platform that this Stargate community vote had the highest participation rate in the platform's history.
The voting website shows that over 15,000 addresses participated in the voting, of which 94.76% representing 7.2 million STG tokens voted in favor, while 5.24% or 399,400 tokens voted against.
Wormhole had previously offered to acquire Stargate.
Wormhole submitted an offer on Saturday, claiming that LayerZero's proposal undervalued Stargate's business. They proposed a $120 million all-cash purchase plan, promising token stakers three times the expected income over the next six months.
Two cross-chain platforms, Axelar and Across, also expressed interest in bidding but stated they needed to postpone decisions to consider other options.
However, Angus Lamps, the head of the Stargate Foundation, stated that the vote on the LayerZero proposal could not be paused, as Stargate had been engaging with parties who signed a confidentiality agreement and conducting due diligence.
LayerZero's initial offer suggested using Stargate's remaining income for the ZRO buyback project, but some community members found this proposal unattractive to STG holders. They subsequently amended the proposal, allowing Stargate stakers to receive half of the total income over six months, with the other half used to buy back LayerZero (ZRO) tokens. After the final agreement, all circulating STG will be exchanged at a rate of 1 STG for 0.08634 ZRO.
