The decentralized autonomous organization Stargate DAO, managing the interchain bridge #Stargate , voted in favor of selling the project to LayerZero Foundation. Nearly 95% of the votes were in favor, despite late attempts by competitors — Wormhole, Axelar, and Across — to intervene.

Deal terms

As a result of the voting, Stargate DAO will be dissolved. STG holders will be able to exchange their tokens for $ZRO from #LayerZero at the rate of 1 STG : 0.08634 ZRO. At current prices, the deal is valued at approximately $120 million.

The initial conditions sparked dissatisfaction: veSTG holders, who locked tokens for bridge fee income, risked losing their entire revenue stream. In response, LayerZero softened the conditions by offering:

  • 50% of Stargate's revenue will go to veSTG holders for six months

  • The remaining portion, and then all "excess revenue," will be directed toward the buyback and burning of ZRO

Competitors attempted to intervene

In the last days of voting, competitor Wormhole entered the market, offering $120 million in cash for $USDC and even transferred funds to a separate wallet. Wormhole requested a five-day suspension of voting to consider their proposal.

Almost immediately, other players expressed interest:

  • Across, through co-founder Hart Lambur, stated readiness to participate in the process if it is conducted "according to the rules."

  • Axelar Foundation also confirmed its willingness to prepare a full proposal provided that the voting is slowed down.

Despite the pressure, Stargate DAO did not stop the process and approved the deal with LayerZero.

Statements and significance of the deal

CEO of LayerZero Labs Brian Pellegrino called the acquisition a "clear entry point to the end user and an immediate source of revenue" for the ecosystem. The company positions the deal as one of the first precedents of DAO acquisitions worth over $100 million.

Stargate was launched by LayerZero in 2022 and became one of the most popular cross-chain bridges. However, its STG token significantly lags behind similar assets of Wormhole and Axelar in terms of market capitalization. Against the backdrop of the news, the ZRO token traded at $2.13, gaining 2.3% over the day.

What's next?

The deal strengthens LayerZero's position as a leader in the cross-chain infrastructure segment. Despite competitors' attempts, the DAO confirmed its trust in the original developer of Stargate.

The DeFi industry received an important signal: large DAO acquisition deals are becoming a reality. This could set a trend for new mergers and acquisitions in the crypto industry.