LayerZero’s $110M all-token offer for Stargate boosts both tokens, but some in the crypto community oppose the deal.
The currencies associated with both projects have increased after the Foundation, which supports the cross-blockchain messaging system LayerZero, proposed to pay $110 million to acquire the crypto platform Stargate.
The offer is “designed to accelerate both Stargate and LayerZero, giving Stargate the resources to ship on an aggressive roadmap that expands its prerogative outside of bridging,” according to a post made by LayerZero on Sunday on Stargate’s forum, outlining the strategy.
According to the statement, LayerZero would exchange the platform’s Stargate Finance token for its token, LayerZero, at a rate of 1 STG to 0.08634 ZRO.
The Foundation created and introduced Stargate in 2022, and if the Stargate community accepts the agreement, the platform will again be under its control.
Using liquidity pools, which the platform promotes as enabling native asset transfers rather than depending on blockchain bridges, which have a track record of hacking, Stargate allows users to move digital assets between blockchains.
ZRO, STG Tokens Rise As Planned
The day following LayerZero’s proposal, both tokens associated with the platforms saw double-digit percentage point gains.
According to CoinGecko, LayerZero’s token increased by more than 23% on the last day of trading at $2.44, making it one of the largest gainers in the cryptocurrency market.
On the other hand, Stargate’s token continued its climb over the past week with 24-hour gains of almost 16.5% to just over 19 cents.
With ZRO down 67% from its December high of $7.47 and STG down over 95% from its mid-2022 peak of $4.14, both tokens have seen massive declines.
Plan Is Praised By LayerZero Boss As Having “Unified Direction”
Bryan Pellegrino, the CEO and co-founder of LayerZero, said on X that he wants “to move faster, ship faster.”
He said the plan would “create a single stack that anybody integrating within the [LayerZero] ecosystem can adopt while helping Stargate execute on its ambitious roadmap.”
He also said it would provide the Stargate community with “a clear path forward with significantly more resources and a single unified direction” and give STG holders “a more liquid token.”
Owners Of STG Tokens Claim That Proposal Is “Not Attractive At All”
However, most Stargate token holders gave the offer an unfavorable review, with some stating that while they recognize the necessity of a swap, the proposed agreement is unjust and does not permit staking.
“The offerings are completely unappealing.
They don’t give STG holders any benefits, and ZRO doesn’t support STG’s revenue-sharing scheme.
One Stargate user remarked, “We will only be able to keep our tokens.”
While some users stated that LayerZero “needs to raise its offer significantly,” others agreed that the offer was “fundamentally flawed” and that, given “the amount of revenue Stargate makes and the potential for the protocol,” the offer should be higher, perhaps a 1:1 token swap.
According to one user, the swap was essential because “managing two tokens is a pain and causes more distractions than necessary.”
Another user agreed that the agreement was unfair because it would prevent STG holders from staking their tokens for rewards, but stated it “makes sense to merge” them.
Stargate stated that the idea will be open for comments for the following seven days.
The agreement will next be put to a vote by tokenholders, who make up the platform’s decentralized autonomous organization.
