Development of the Day: One Altcoin Offered to Buy Out Another – Will Remove It from the Market After the Purchase

LayerZero Foundation, the organization supporting the cross-chain interoperability protocol LayerZero (ZRO), has submitted a $110 million offer to purchase the Stargate bridge and STG tokens.

The proposal aims to incorporate Stargate into LayerZero as a key ecosystem participant.

“This proposal is designed to accelerate the development of Stargate and LayerZero, to provide resources for Stargate to aggressively execute on a roadmap that expands beyond bridging, and to more deeply integrate a powerful revenue-generating protocol that directly touches the end user into the LayerZero ecosystem,” the statement said.

Under the proposal, the STG token will be terminated, and investors will be able to exchange their STG holdings for LayerZero’s native token, ZRO. The exchange rate is set at 1 STG = 0.08634 ZRO, equivalent to $0.1675 per STG and $1.94 per ZRO. Stargate will be absorbed into the LayerZero Foundation, and the Stargate DAO will be dissolved.

LayerZero Labs co-founder and CEO Bryan Pellegrino shared on his X account, “We want to move faster. We aim to create a single structure that can integrate with the LayerZero ecosystem while helping Stargate implement its ambitious roadmap.”

Launched by LayerZero in 2022, Stargate is touted as one of the industry’s most widely used bridges, with over $70 billion in transaction volume to date. However, the STG token fell from its peak of $4.14 shortly after launch, falling below $0.20. Following the offering, the STG price rose 12% to $0.188, while ZRO rose 15%, bringing the total value of the offering to approximately $127 million.

Graph showing the price increase following the development in ZRO price.

The proposal will be open for discussion on the Stargate DAO community forum for seven days. Some community members argue that the proposal is not attractive enough for STG holders.

*This is not investment advice.

Source