The cross-blockchain bridge Wormhole is planning to counter LayerZero’s $110 million proposal to acquire the crypto protocol Stargate, claiming that LayerZero’s offer does not present a “compelling opportunity.”
The Wormhole Foundation stated in a post on Stargate’s forum on Wednesday that it is deserving of “a more competitive process” after LayerZero Foundation’s initial $110 million bid in August failed to strike a chord with the community. LayerZero revised its offer on Sunday, receiving a better reception.
“It doesn’t create a compelling offer, which values Stargate’s ongoing business at an unreasonably low number,” Wormhole remarked regarding LayerZero’s proposal. “We are ready to present a significantly higher bid.”
This upcoming bid might initiate a bidding war for Stargate, which LayerZero originally developed and launched in 2022. LayerZero’s acquisition would bring the platform back under its ownership, but many Stargate Finance (STG) tokenholders criticized its initial offer as inequitable.
Wormhole requests vote suspension on LayerZero’s bid
Wormhole urged the Stargate community to pause the vote on LayerZero’s offer for five business days in order to finalize its own proposal.
It expressed a desire for additional time to conduct research and communicate with the Stargate team, suggesting it could “enhance the current offer if more time is provided for a thorough process.”
It requested details on asset lists, financials since launch, user and traffic metrics, liabilities, and whether any ongoing lawsuits or regulatory actions are present.
Wormhole presented its proposed acquisition of Stargate as creating a “market-dominant ecosystem.”
“Stargate provides deep, unified liquidity pools and demonstrable user demand, while Wormhole boasts broad ecosystem integration across numerous blockchains and protocols, as well as key growth sectors in crypto, like RWAs [real world assets],” it noted.
Wormhole did not respond immediately to a request for comment. The LayerZero Foundation was also unavailable for comment.
Stargate community supports LayerZero’s revised bid
LayerZero updated its proposal to acquire Stargate on Sunday, adding a revenue-sharing period for stakers, which has received considerable support from Stargate’s community.
LayerZero’s final proposal stated it would offer staked Stargate tokenholders half of all top-line Stargate revenue for six months, with the other half directed towards buying back its LayerZero (ZRO) token.
In contrast, its initial proposal suggested using Stargate’s surplus revenue for a ZRO buyback program.
LayerZero stated that all circulating STG would be exchanged for ZRO at a ratio of 1 STG to 0.08634 ZRO — consistent with its original proposal.
The revised proposal has garnered 88.6% support among STG holders, representing 6.6 million tokens.
Some Stargate community members had labeled LayerZero’s original offer as “not attractive at all” because it offered no benefits to STG holders, while others argued that the token swap should be boosted to a 1:1 ratio.
Wormhole, Stargate, LayerZero tokens rise
Tokens associated with all three platforms experienced gains, along with a slight uptick in the broader crypto market.
The Wormhole (W) token rose by 6.3% over the last 24 hours to just above 8 cents, experiencing a surge around the time of its post on Stargate’s forum, according to CoinGecko.
Stargate’s token increased by 6% throughout the day, peaking around the time of Wormhole’s forum post at over 18 cents, before settling back to just above 17 cents.
LayerZero’s token also saw an increase, rising by a modest 3.6% today to $2, joining the positive trend in the broader crypto market, with Bitcoin (BTC) and Ether (ETH) up 1% and 5.2%, respectively.
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