Original | Odaily Planet Daily ( @OdailyChina )

Author｜Azuma ( @azuma_eth )

In the early morning of August 11, the foundation of the cross-chain protocol LayerZero released a draft in the governance forum of Stargate, a cross-chain bridge built on the protocol, proposing to acquire Stargate for a total price of US$110 million.

Specifically, the LayerZero Foundation proposed to exchange all STG in circulation (including STG in staking/voting status) for ZRO at a ratio of 1 STG: 0.08634 ZRO, at a price of $0.1675 per STG (actually slightly higher than the market price at the time) and $1.94 per ZRO at the time of posting.

After the acquisition is completed, Stargate will be more deeply integrated into the LayerZero ecosystem, the Stargate DAO will be dissolved, and all future excess revenue generated by Stargate will be used to reduce the circulating supply of ZRO through a buyback program.

Following the announcement of the acquisition proposal, the prices of both ZRO and STG saw a surge. OKX market data shows that as of 3:00 PM Beijing time on August 11, ZRO was trading at 2.479 USDT, a 27.49% increase over the previous 24 hours. STG was trading at 0.2002 USDT, a 21.3% increase over the previous 24 hours.

LayerZero’s perspective: Bringing together protocols and products to unify value media

From LayerZero's perspective, the idea of acquiring Stargate is not difficult to understand.

As a backend protocol and front-end product, LayerZero and Stargate clearly have a deeply intertwined relationship, so much so that users often don't consider them separate projects. However, LayerZero and Stargate have long maintained separate operations, each with its own governance structure and token system. ZRO and STG, respectively, serve as governance vehicles and provide additional functionality within each project.

While early market narratives suggested that the layered structure of ZRO and STG, corresponding to cross-chain protocols and bridge products respectively, helped differentiate ZRO from other cross-chain bridge tokens, making it appear as something "higher-level," this split model objectively has its flaws. For example, it incurs increased development and operational costs; independent governance systems inevitably lead to misalignment in direction and direction; and most importantly, a multi-token model inevitably leads to value diversion, thereby weakening token value . Regarding this point, the belief that "a single token is better than multiple tokens" has gradually become an industry consensus in recent years.

Obviously, LayerZero is aware of this problem. In the proposal to acquire Stargate and related X dynamics, LayerZero mentioned a slogan-like phrase- "bring the bridge home" .

LayerZero founder Bryan Pellegrino also said: "Let's bring the cross-chain bridge home. Within LayerZero, we make decisions every day - which products to develop? Which collaborations to establish? How to integrate? Every day we are entangled in tiny choices, should we do it ourselves? Or hand it off to Stargate? Who will be responsible for writing the code? All of this is a burden. It's all too slow. We want to move faster and deliver faster..."

It is not difficult to see from Bryan's words that from the perspective of LayerZero, integrating the originally independent cross-chain bridge product Stargate and unifying it with the protocol into a whole will effectively eliminate unnecessary development and operational friction, improve the development and delivery efficiency of both parties, and at the same time unify ZRO and STG into a single value medium, mentioning ZRO's value capture ability - in the future, Stargate's excess income will be used to repurchase ZRO.

This is why the LayerZero team, including Bryan, is actively calling for support for the proposal.

Stargate's perspective: The token is at a low point, and community opposition is strong.

However, from Stargate's perspective, the community's reaction to the acquisition proposal was not optimistic. Under LayerZero's acquisition proposal, a large number of STG token holders actively expressed their opposition.

• Community member @ahmetgumustekin said: “This offer is unattractive. It provides no benefits to STG holders, and the STG revenue sharing mechanism does not apply to ZRO. We should continue to hold our tokens... unless LayerZero increases its offer.”
• Community member @Vladtheinhaler said: "STG tokens have reached a high of $4 in previous market cycles. Considering the actual revenue scale and development potential of the Stargate Protocol, the current price is clearly significantly undervalued. We recommend that STG be converted to ZRO tokens at a 1:1 exchange ratio based on STG's historical price levels."
• Community member @Dan said: “In my opinion, while tokens can be redeemed 1:1 at the current market price, stakers must be compensated differently because their interests will be diluted, and stakers deserve additional premium compensation.”
• Community member @LLCgenerator stated, "As a long-term holder of STG and veSTG, I believe the LayerZero Foundation's acquisition proposal is fundamentally flawed and manifestly unfair. It severely underestimates Stargate's asset value and development potential, effectively allowing LayerZero to gain disproportionate benefits at the expense of existing stakeholders. This proposal is essentially an expansion of LayerZero's power rather than true collaboration, which could erode the trust foundation of decentralized governance. I urge token holders to vote against it in Snapshot and push for the following revised terms: a 1:1 ZRO exchange ratio, premium compensation based on lock-up duration, and a continuous revenue sharing mechanism. Beyond these conditions, Stargate's continued independent development remains the preferred option."

Based on the opinions expressed by many community members, the opposition of STG token holders mainly focuses on the following three aspects:

First, the offer price is too low. STG is currently at a historical low, and the market has shown an upward trend. It is not reasonable to sell it at the current price.

Second, because STG adopts the ve governance model, staking and locking users fail to receive corresponding additional rewards;

Third, STG holders can share the Stargate platform fee income through staking, but LayerZero has not yet turned on the fee switch, so STG has more value capture capabilities.

The process will continue, but the outlook is not optimistic

According to the procedural progress mentioned in the LayerZero Foundation's proposal, the proposal has now entered the discussion period, and the Stargate community can freely discuss it in the governance forum and has seven days to raise questions.

After the discussion period, the proposal will be put to a three-day vote on Snapshot, where STG holders will vote for or against the LayerZero Foundation's acquisition proposal. The vote must reach a quorum of 1.2 million veSTG, and 70% of the votes in favor must be passed.

If the proposal is passed, STG holders will be notified how to exchange for ZRO, and the LayerZero Foundation will take over and operate all responsibilities of Stargate. Stargate will continue to operate normally, and users of the Stargate Bridge Protocol will not experience any interruptions or functionality changes during the transition.

Considering that the final decision on this matter lies with STG holders, and considering the current strong opposition from the Stargate community, the prospects for the acquisition proposal to pass are likely to be bleak without further revisions . Based on this logic, while both ZRO and STG saw sharp increases following the proposal's release, continued growth may be difficult.