The cross-chain bridge Wormhole is preparing to counter LayerZero’s $110 million offer for the crypto protocol Stargate, claiming that LayerZero’s bid fails to present a convincing proposal.
The Wormhole Foundation stated in a forum post on Stargate’s site on Wednesday that a “more competitive process” is warranted after LayerZero’s initial bid in August did not resonate with the community. LayerZero revised its offer on Sunday, garnering better reception.
“It does not make a convincing offer, which values Stargate’s ongoing business at an unrealistically low figure,” Wormhole expressed regarding LayerZero’s bid. “We are ready to make a significantly higher offer.”
This upcoming bid could ignite competition for Stargate, which was originally developed and launched by LayerZero in 2022. The deal would bring the platform back into LayerZero’s fold, although numerous Stargate Finance (STG) tokenholders criticized its initial proposal as inequitable.
Wormhole requests a pause on LayerZero’s bid vote
Wormhole has asked the Stargate community to halt the vote on LayerZero’s bid for five business days, giving them time to finalize their proposal.
They expressed that they “would like additional time to conduct research and converse with the Stargate team,” indicating that they could “enhance the existing offer if allowed to perform a thorough process.”
The foundation requested a list of assets, financials since launch, user statistics, traffic metrics, liabilities, and information regarding any ongoing lawsuits or regulatory issues.
Source: Wormhole Foundation
Wormhole proposed its possible acquisition of Stargate as a way to create a “market-leading ecosystem.”
“Stargate contributes extensive, unified liquidity pools and demonstrated user demand, while Wormhole ensures broad ecosystem integration across dozens of blockchains and protocols, in addition to vital growth sectors in crypto, such as RWAs [real-world assets],” they noted.
Wormhole did not immediately reply to a request for comments. The LayerZero Foundation was also unavailable for comment.
Stargate community supports LayerZero’s revised bid
LayerZero updated its proposal to acquire Stargate on Sunday, incorporating a revenue-sharing period for stakers of Stargate tokens, which has received significant backing from the Stargate community.
LayerZero’s latest proposal indicates that staked Stargate tokenholders would receive half of all top-line Stargate revenue for six months, with the rest dedicated to buying back its LayerZero (ZRO) token.
In contrast, the initial proposal suggested utilizing Stargate’s excess revenue for a ZRO buyback initiative.
LayerZero stated that all circulating STG would be converted to ZRO at a rate of 1 STG to 0.08634 ZRO, aligning with its original plan.
The revised proposal has garnered 88.6% of STG holders voting in favor, representing 6.6 million tokens.
Some members of the Stargate community described LayerZero’s initial offer as “not appealing at all,” as it failed to provide advantages for STG holders, while others suggested increasing the token swap to a 1:1 ratio.
Wormhole, Stargate, LayerZero tokens rise
Tokens associated with all three platforms experienced gains on the day, reflecting a slight uptick in the broader crypto market.
The Wormhole (W) token rose 6.3% over the past 24 hours, surpassing 8 cents, boosted around the timing of its forum post to Stargate, according to CoinGecko.
Stargate’s token climbed 6% today, also spiking around the time of Wormhole’s forum announcement to a 24-hour high of over 18 cents, which has since settled to slightly above 17 cents.
LayerZero’s token has also made modest gains of 3.6% to $2, in sync with rises in the wider crypto landscape, as Bitcoin (BTC) and Ether (ETH) increased by 1% and 5.2%, respectively.
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