Wormhole Challenges LayerZero's $110M Stargate Acquisition Bid

Wormhole Foundation Prepares Counter-Offer for Stargate Protocol

Cross-blockchain bridge protocol Wormhole is positioning itself to outbid LayerZero's $110 million acquisition offer for Stargate Finance, claiming the current proposal undervalues the popular DeFi protocol. The Wormhole Foundation criticized LayerZero's bid as insufficient and announced plans to submit a "meaningfully higher" counter-offer.

LayerZero's Initial Bid Faces Community Resistance

LayerZero Foundation's original $110 million acquisition proposal for Stargate faced significant pushback from the community in August. The bid was widely criticized by STG tokenholders who viewed the offer as unfair and below market value. Following community feedback, LayerZero updated its proposal on Sunday, receiving more positive reception from stakeholders.

The revised offer includes a revenue-sharing mechanism where staked Stargate tokenholders would receive 50% of all top-line Stargate revenue for six months. The remaining 50% would fund LayerZero (ZRO) token buyback programs, creating additional value for the ecosystem.

Wormhole Requests Vote Suspension for Due Diligence

Wormhole has formally requested the Stargate community suspend voting on LayerZero's bid for five business days. This pause would allow Wormhole sufficient time to conduct comprehensive due diligence and finalize its competing offer.

The Wormhole Foundation has requested access to:

• Complete asset listings and financial statements

• User engagement and traffic metrics since launch

• Outstanding liabilities and legal obligations

• Any pending regulatory actions or lawsuits

Strategic Vision: Creating a Market-Dominant Ecosystem

Wormhole pitched its potential acquisition as creating a "market-dominant ecosystem" in the cross-chain bridge sector. The foundation highlighted complementary strengths between the two protocols:

Stargate brings proven user demand and deep unified liquidity pools to the table. Meanwhile, Wormhole offers extensive ecosystem integration across dozens of blockchains and protocols, plus significant exposure to growing crypto sectors like Real World Assets (RWAs).

Community Support for LayerZero's Updated Proposal

LayerZero's revised acquisition proposal has gained substantial community backing, with 88.6% of STG holders voting in favor. The approval represents 6.6 million tokens supporting the updated terms.

The final proposal maintains the original token swap ratio of 1 STG to 0.08634 ZRO for all circulating Stargate tokens. However, the addition of revenue-sharing provisions addressed many community concerns about the initial offer.

Token Market Performance Reflects Acquisition Battle

All three protocols have experienced positive price movements amid the acquisition competition:

Wormhole's W token surged 6.3% in 24 hours to approximately 8 cents, with gains coinciding with the forum announcement. Stargate's STG token climbed 6% during the same period, reaching a 24-hour high above 18 cents before settling around 17 cents.

LayerZero's ZRO token posted modest 3.6% gains to $2, participating in broader crypto market recovery alongside Bitcoin and Ethereum's respective 1% and 5.2% increases.

Background: Stargate's Role in DeFi Infrastructure

Stargate Finance launched in 2022 as a LayerZero-developed protocol providing cross-chain liquidity solutions. The platform enables users to swap native assets across different blockchains while maintaining unified liquidity pools.

The acquisition battle represents significant consolidation potential in the cross-chain bridge sector, with both Wormhole and LayerZero seeking to expand their market presence and technical capabilities.

What's Next for the Stargate Acquisition

The outcome of Wormhole's intervention remains uncertain as the community weighs options between LayerZero's established relationship and Wormhole's promise of a higher valuation. The requested five-day pause will determine whether Wormhole can present a compelling alternative to disrupt LayerZero's acquisition plans.

Both protocols have not responded to requests for additional comment regarding their competing proposals and strategic visions for Stargate's future development.

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