A significant acquisition battle is unfolding in the blockchain space as Wormhole, a prominent cross-chain bridge, challenges LayerZero's bid to acquire the Stargate protocol. This dispute highlights the strategic value of Stargate and the competitive nature of decentralized finance mergers.
Wormhole Challenges LayerZero's Bid
Wormhole Foundation has publicly contested LayerZero's $110 million offer for Stargate, labeling it as "unconvincing" and valuing the protocol "unreasonably low." While LayerZero developed and launched Stargate in 2022, its initial offer faced strong criticism from Stargate's token holders. Wormhole has expressed its readiness to present a "significantly higher offer" and has formally requested a five-business-day suspension of the ongoing vote on LayerZero's proposal. This pause would allow Wormhole to finalize its own bid and conduct due diligence, including reviewing Stargate's financial records, user metrics, and liabilities. Wormhole envisions a potential acquisition forming a "market-dominant ecosystem" by combining Stargate's deep liquidity and user demand with Wormhole's extensive blockchain integrations and growth areas like Real-World Assets (RWAs).
LayerZero's Revised Offer Gains Traction
Despite Wormhole's challenge, LayerZero has been proactive in addressing community concerns. The LayerZero Foundation recently updated its acquisition proposal, which was met with much better reception from the Stargate community. The revised offer includes a six-month revenue-sharing period for staked Stargate (STG) token holders, granting them half of Stargate's gross revenue, with the remaining half used for LayerZero (ZRO) token buybacks. This contrasts with their initial plan, which solely focused on ZRO buybacks using surplus revenue. The updated proposal also maintains the original token exchange ratio of 1 STG for 0.08634 ZRO. This strategic adjustment has garnered substantial support, with 88.6% of STG token holders, representing 6.6 million tokens, voting in favor of LayerZero's revised offer, signaling a strong community preference for the updated terms.
