LayerZero Foundation has put forward a $110 million counter proposal to acquire Stargate, the cross-chain bridge it first launched in 2022. The acquisition seeks to centralize governance, maximize technical efficiencies, and strengthen various functions related to ongoing development. No wonder that in the wake of the announcement, LayerZero’s ZRO token skyrocketed by 1700% to an all-time high of $2.30. At the same time, Stargate’s STG token saw significant momentum.
If approved, LayerZero will take full ownership of Stargate’s functioning. Our proposal details a strategy for reinvesting Stargate’s revenues into ZRO buybacks. We believe that this strategic move would contribute to increasing the long-term value of ZRO token. This strategic alignment aims to bring the various pieces of functionality that both platforms have created over the years under one broader and common direction.
LayerZero CEO Bryan Pellegrino described the proposal as providing a “singular unified north star” for the two projects. The move aims to create more seamless, manageable operations, playing to the strengths of both platforms to provide improved features that benefit the entire data ecosystem. The proposal needs to receive at least 70% supermajority approval from the Stargate DAO to be implemented.
Since launching in April of this year, Stargate has already processed over $70 billion in cross-chain transactions. The platform is humming with huge network activity. It has failed to translate this performance into long-term development for its native STG token. The proposed acquisition hopes to remedy this by bringing Stargate’s infrastructure further into the fold of LayerZero’s ecosystem.
As part of the acquisition proposal, dissolving the Stargate DAO and winding down the STG token are part of the plan. This decision brings resources together for increased efficiency. It further spotlights the ZRO token, the lifeblood asset of our all-in-one integrated ecosystem. The move is intended to offer more obvious guidance, as well as perhaps realizing additional value for token holders.
Shortly after the announcement, the ZRO token soared 26% in price. In the opposite direction, trading volume increased by an incredible 540%! This positive market reaction highlights industry investor confidence in the acquirer’s ability to realize the benefits of the acquisition. In tandem, the STG token saw a 20% pump, showcasing the bullish sentiment of Stargate holders.
According to market analysts, ZRO could rally upwards and remove the resistance level of $2.80. In doing so, this brings it closer to the $3 psychological level. This bullish sentiment is possible due to the hope that the LayerZero-Stargate acquisition goes through. Combined, they’ll be building a more robust and efficient solution to address cross-chain interoperability. This idea of higher utility and value creation at scale is what’s propelling a lot of the current market excitement.
The build-up LayerZero–Stargate cross-border merger, if allowed, could potentially reconfigure the cross-chain interoperability landscape. Both platforms do have incredible technological firepower and resources behind them. Together, the new combined entity can drive a more seamless and efficient experience for users and developers alike. Collectively, this consolidation would create a new template for how cross-chain solutions will operate within the developing blockchain environment.
