LayerZero to Acquire Stargate, Retire STG in $110M Token Merger

- LayerZero plans $110M Stargate buyout, swapping STG for ZRO at a fixed 0.08634 rate.
- Stargate DAO may dissolve, ending staking rewards as governance centralizes to LayerZero.
- Revenues shift to ZRO buybacks, cutting supply and ending direct yields for STG holders.
LayerZero has moved to Stargate in a $110 million deal, aiming to retire the STG token entirely. The proposal would convert all circulating STG into ZRO at a fixed rate of 0.08634 ZRO per STG. This planned consolidation targets a single-token model to streamline governance, simplify operations, and integrate revenues into LayerZero’s broader ecosystem.
STG Token Swap and DAO Dissolution
The agreement values each STG at $0.1675, slightly above its current market price but below past highs. If approved, Stargate DAO will dissolve, ending its independent governance structure and staking rewards system. All future operational and strategic control will shift to the LayerZero Foundation.
According to this mechanism, STG holders may exchange their tokens through the open redemption contract at the designated ratio. The LayerZero foundation has assured that any surplus Stargate revenue in the future will be used to buy back ZRO. This scheme may limit the supply in the open market, which could positively influence ZRO’s market performance.
The vote will adhere to Stargate DAO guidelines, where 70% of the voting is required, and 1.2 million veSTG votes must be present. The program will commence with a seven-day community discussion followed by a three-day Snapshot vote. With approval, there would be instant conversion of operations, but with no disruption to Stargate bridge users.
ZRO Integration and Revenue Redirection
The integration will fold Stargate’s $70 billion-plus transaction volume into LayerZero’s core network operations. Stargate’s revenues, which recently generated $939,000 in quarterly payouts to stakers, will instead flow into LayerZero’s centralized treasury. The buyback plan aligns with strategies seen in other major projects, including Chainlink.
LayerZero has stressed that this merger of the tokens will eliminate non-distributive functions and consolidate value in ZRO. The transition will remove the fixed-yield staking mechanism found on Stargate and expand the move into the LayerZero token economy. But STG holders will also no longer share direct revenue as part of their staking positions.
The proposal has faced mixed reactions in the market, with some participants being excited by efficiency gains and some worried about the loss of valuation and yields. Though the proposed swap rate offers a minor premium, the opponents claim that it is too low, as it does not reflect well on STG’s continuous revenue potential. Discussions continue over whether additional incentives might balance the transition.
Related: TRUMP Token Boosts Reach with its Move to TRON via LayerZero
Consolidation and Strategic Implications
The transaction is one of the biggest tokenized mergers in the ongoing blockchain infrastructure merger trend. The relocation is intended to enhance LayerZero as a cross-chain interoperability leader and dedicate resources. Its proponents view it as a means towards greater speed of execution and more aligned product development.
Critics point to the centralization threat of breaking up a working DAO and centralizing decision-making under a single foundation. They caution that this can lead to a precedent of related governance rollbacks across other related protocols. The proposal’s result may change the future of multi-token and sub-DAO ecosystems.
In the event of its approval, LayerZero will completely absorb Stargate, manage its revenues, and dictate the technical growth using one operation center. That ruling will reveal whether the market favors consolidation for efficiency or opposes it to protect decentralized governance.
The post LayerZero to Acquire Stargate, Retire STG in $110M Token Merger appeared first on Cryptotale.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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