LayerZero, a blockchain messaging protocol, has successfully acquired the crypto protocol Stargate following a tumultuous initial offer and a competitive four-way bidding process.
The Stargate community voted on Sunday, overwhelmingly approving LayerZero Foundation’s revised $110 million acquisition proposal with a 95% majority after initial concerns about fairness from Stargate (STG) token holders.
Three competitors attempted last-minute bids for Stargate, with Wormhole seeking to delay the vote on LayerZero’s acquisition.
LayerZero originally developed Stargate in 2022, and this acquisition brings the platform back under its management. Stargate enables cross-chain transfers via liquidity pools, promoting native asset transfers over traditional blockchain bridges, which often face security issues.
LayerZero reports record voter turnout
LayerZero co-founder and CEO Bryan Pellegrino announced on X that the community vote for Stargate achieved “the highest participation of any vote” in the history of the platform.
According to the voting platform, over 15,000 addresses participated, with 94.76% (7.2 million STG tokens) voting in favor and 5.24% (399,400 tokens) against.
“Not only did ~95% of the stake weight vote in the affirmative, but ~95% of addresses voted in the affirmative,” Pellegrino noted.
Source: Bryan Pellegrino
Wormhole submitted an offer for Stargate
Wormhole made an offer on Saturday after announcing on Wednesday its intention to propose a “meaningfully higher bid,” arguing that LayerZero’s offer undervalued Stargate’s ongoing potential.
Wormhole proposed a $120 million all-cash option that promised Stargate token stakers “3x the projected revenue for the next 6 months, accelerated and paid immediately, as part of our successful acquisition.”
Axelar and Across also explored bids for Stargate
Both Axelar Network and Across Protocol expressed interest in bidding for Stargate on Sunday, emphasizing the need for a pause in the vote regarding LayerZero’s proposal.
Across co-founder Hart Lambur remarked in Stargate’s forum that he was encouraged to submit an offer, but he preferred not to rush a last-minute proposal, indicating that Across would participate if the process was slowed for proper consideration.
The Axelar Foundation later noted that it was “strongly interested” in submitting a bid if a “competitive process” was initiated for the acquisition, encouraging Stargate to evaluate all options before making a choice.
However, Stargate Foundation lead Angus Lamps stated that the vote on LayerZero’s bid could not be paused, adding that Stargate has been engaging with all parties that sign a non-disclosure agreement and wish to conduct due diligence.
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LayerZero’s initial proposal depicted utilizing Stargate’s excess revenue for a ZRO buyback initiative, which some members within the Stargate community deemed “not attractive at all” since it provided little benefit to STG holders.
The proposal was revised on Sunday to allocate half of all top-line revenue for six months to Stargate stakers, with the other half designated for the buyback of its LayerZero (ZRO) token.
Under the approved agreement, all circulating STG will be exchanged for ZRO at a conversion rate of 1 STG to 0.08634 ZRO.
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