The cross-chain protocol Stargate is at the center of an acquisition battle between Wormhole and LayerZero. Wormhole has challenged LayerZero's initial $110 million bid, arguing it undervalues Stargate's significant assets and market potential. Wormhole is preparing a more competitive offer, requesting a pause in the ongoing voting process to finalize its proposal.
Key Takeaways
-
Wormhole is preparing a higher bid to acquire Stargate, challenging LayerZero's initial offer.
-
Stargate has a Total Value Locked (TVL) of $345 million, including substantial stablecoin and Ethereum holdings.
-
Wormhole cites Stargate's tenfold increase in bridge volume and extensive network integrations as justification for a higher valuation.
-
LayerZero updated its bid to include a revenue-sharing period for Stargate token holders, which has gained community support.
-
The acquisition could significantly impact the cross-chain infrastructure landscape.
The Bidding War Intensifies
Wormhole Foundation has escalated its efforts to acquire Stargate, a prominent cross-chain protocol. This move comes after criticism of LayerZero's initial $110 million offer, which many in the DeFi community perceived as undervaluing Stargate's assets and future potential. Stargate's treasury boasts approximately $76.47 million in stablecoins, $15.9 million in Ethereum, and $55 million in Stargate tokens, alongside other holdings.
Wormhole is advocating for a five-day pause in the current Snapshot vote to submit a more competitive bid. The foundation highlights Stargate's impressive growth, including a tenfold increase in bridge volume to $4 billion in July 2025 compared to the previous year, and its integration across over 80 blockchain networks. Wormhole believes merging Stargate's liquidity and user base with its own ecosystem will foster significant growth in bridge volume and fee revenue, creating long-term value for stakeholders.
LayerZero's Revised Offer and Community Response
LayerZero, the original developer of Stargate, initially proposed acquiring the protocol with a bid that included using Stargate's excess revenue for a LayerZero (ZRO) token buyback program. However, this offer was met with criticism from many Stargate (STG) token holders who felt it was unfair and did not adequately benefit them.
In response, LayerZero updated its proposal to include a six-month revenue-sharing period for staked Stargate tokenholders, granting them half of Stargate's top-line revenue. This revised offer has garnered significant support from the Stargate community, with a substantial majority of STG holders voting in favor. The token swap ratio remains at 1 STG for 0.08634 ZRO.
Market Impact and Future Outlook
The competition between Wormhole and LayerZero for Stargate is seen as a pivotal moment for cross-chain infrastructure. The outcome could reshape the competitive landscape and influence future integration strategies and acquisition models within the DeFi space. Stargate's estimated annual revenue of around $2 million and its continuous expansion across blockchain networks underscore the high stakes involved. The valuation models for DeFi protocols remain a subject of debate, and the transparency of this bidding process is crucial for maintaining trust among all parties.
Sources
-
Wormhole Challenges LayerZero in Stargate Acquisition Bid Amid $345M TVL Debate, AInvest.
-
Wormhole to Compete With LayerZero’s Stargate Bid, Cointelegraph.
This article was created with support from AI-driven technology, drawing on multiple reputable sources. The final content has been thoroughly reviewed and edited by BlockzHub's editorial team to ensure accuracy, clarity, and coherence. Original reporting sources are credited whenever appropriate and as required. The opinions expressed in this article do not necessarily represent the official views or positions of BlockzHub. This article is intended for informational purposes only and should not be considered financial or professional advice. Investing involves risk, and you should consult a qualified financial advisor before making any investment decisions.