LayerZero has officially reclaimed Stargate in a $110 million acquisition, ending weeks of speculation and a tense four-way bidding war. With overwhelming support from Stargate’s community, the deal marks one of the most significant consolidations in the decentralised finance (DeFi) sector this year.
A Heated Contest for Stargate
LayerZero, a blockchain messaging protocol, won Stargate after a turbulent process that saw competitors rushing in with last-minute proposals. The acquisition, approved on Sunday, came despite higher bids and pressure from rival protocols. Stargate, launched by LayerZero in 2022, is a cross-chain platform designed to transfer assets natively between blockchains through liquidity pools. Unlike traditional blockchain bridges, Stargate avoids wrapped tokens and reduces the risks that have plagued bridges in past hacks.
The community vote was decisive. More than 15,000 wallet addresses took part, and 94.76% of them supported the deal. That translated to around 7.2 million STG tokens in favour, compared to fewer than 400,000 against. LayerZero co-founder Bryan Pellegrino called it the “highest participation in voting history” for Stargate. The result confirmed majority alignment between tokenholders and LayerZero’s strategic push.
Rival Bids and Rising Tensions
The approval capped a week of drama. Just one day before the vote, Wormhole put forward a $120 million all-cash offer, seeking to outbid LayerZero. Wormhole also promised Stargate’s stakers three times the projected revenues for six months, paid immediately. At the same time, it asked Stargate leadership to halt voting to consider its offer. The proposal was ultimately dismissed by Stargate’s foundation, which said the process could not be paused.
Two additional firms Axelar Network and Across Protocol, signalled a willingness to join the contest. However, both stated they would only submit formal offers if the community slowed down the process for competitive bidding. Across Protocol’s co-founder, Hart Lambur, even admitted he would avoid rushing an 11th-hour deal but would participate under extended timelines. Similarly, Axelar’s team expressed “strong interest” in a competitive process that never materialised.
Despite Wormhole’s higher cash offer, Stargate voters chose LayerZero. For many, continuity outweighed financial incentives. Stargate was originally incubated by LayerZero before spinning off as its own decentralised autonomous organisation (DAO). That history seemed to reassure STG holders that strategic alignment mattered more than a one-off payout.
From Controversy to Consensus
LayerZero’s initial acquisition pitch faced sharp criticism. The original $110 million plan suggested funding a ZRO buyback programme with Stargate’s excess revenues. Many STG holders resisted the idea, arguing it did not directly benefit them. Some even called the early proposal “not attractive at all”.
Feedback forced LayerZero to amend its offer. The final plan gave Stargate stakers 50% of top-line revenues over a six-month period, with the remaining 50% reserved for ZRO buybacks. That revision helped to sway undecided voters and boosted community approval.
Under the new arrangement, all existing STG tokens, including those staked, will convert to LayerZero’s native currency, ZRO. The swap ratio was fixed at 1 STG = 0.08634 ZRO, valuing STG slightly higher than its price before the announcement. This structure effectively dissolves the Stargate DAO and places governance under the LayerZero ecosystem. The market reaction clearly reflected the deal’s significance. STG surged by almost 5% after the vote, trading near $0.19. ZRO, meanwhile, jumped nearly 4.7% to $2.17, though it later dipped with broader market volatility.
Implications for DeFi and LayerZero
This acquisition is more than just a return-to-base for Stargate. It consolidates LayerZero’s dominance in the cross-chain interoperability sector. Currently, LayerZero holds roughly 85% market share in blockchain messaging solutions, with firms like PayPal, BitGo, and Paxos already using its services.
Regaining Stargate enables LayerZero to unify liquidity pools with its messaging protocol, ultimately simplifying cross-chain asset flows. By removing the dependency on wrapped tokens, it also strengthens both security and efficiency for end-users. Pellegrino has even described Stargate as a crucial “access point to the end-consumer,” suggesting it will accelerate value transfer between blockchains.
For Stargate, the deal provides resources and support for a new development roadmap, including scalability enhancements and a planned V2 upgrade built on LayerZero’s technology. However, it also ends Stargate’s independence as a DAO, raising questions about decentralisation and reduced community governance. In the bigger picture, the deal shows a rising trend in DeFi. Projects are increasingly consolidating to pool resources, reduce redundancy, and respond to the growing demand for seamless cross-chain functionality. Stargate’s sale might now serve as a benchmark for future acquisitions in the sector.
Written By Fazal Ul Vahab C H
