The Layerzero Foundation, an organization that supports the Cross-Chain Interoperability Protocol, Layerzero (ZRO), has submitted a $110 million offer to purchase Stargate Bridge and STG Tokens.
The proposal aims to incorporate Stargate into Leayerzero as a major ecosystem participant.
“The proposal is designed to accelerate the development of Stargate and Layerzero, and provide resources to help Stargate actively implement a roadmap that expands beyond bridging, and to provide more resources to deepen integration of powerful revenue generation protocols that will directly touch end users with the Layerzero ecosystem,” the statement said.
Under this proposal, the STG token will be terminated and investors will be able to exchange STG Holdings for Layerzero’s native token Zro. The exchange rate is set at STG = 0.08634 ZRO, which is equivalent to $0.1675 per STG and $1.94 per Zro. Stargate will be absorbed by the Layerzero Foundation, and Stargate Dao will be disbanded.
“We want to move faster. We aim to create a single structure that can integrate with the Layerzero ecosystem while helping Stargate implement an ambitious roadmap,” said Bryan Pellegrino, co-founder and CEO of Layerzero Labs, in his X account.
Launched by Layerzero in 2022, Stargate is touted as one of the most widely used bridges in the industry, with trading volumes of over $70 billion so far. However, the STG token fell from its peak at $4.14 shortly after launch, falling below $0.20. Following the offering, STG prices rose 12% to $0.188, while Zro rose 15%, bringing the total offering to around $127 million.
A graph showing price increases after ZRO prices have been developed.
This proposal will be open for seven days to discuss at the Stargate DAO Community Forum. Some community members argue that the proposal is not attractive enough to STG holders.
*This is not investment advice.
