Stargate DAO Dissolves As LayerZero Wins Historic $120 Million Cross Chain Takeover
LayerZero Foundation completed its acquisition of Stargate Finance on August 24, 2025, following overwhelming approval from the Stargate DAO community. According to BeInCrypto, more than 94% of voting participants supported the $120 million deal. The community vote saw exceptional turnout with over 15,000 members casting more than 7.5 million veSTG tokens.
The acquisition dissolves the Stargate DAO and converts all STG tokens into ZRO at a fixed rate of 1 STG equals 0.08634 ZRO. LayerZero CEO Bryan Pellegrino confirmed that both liquid and staked STG balances qualify for conversion. The deal values each STG token at approximately $0.1675, representing a slight premium over pre-announcement trading prices.
Stargate Finance has processed more than $70 billion in cross-chain transactions across 50 blockchain networks since launching in 2021. The protocol was originally developed by LayerZero Labs before spinning out as an independent decentralized autonomous organization.
Why This Matters
This transaction represents one of the first nine-figure acquisitions of a decentralized organization in cryptocurrency history. The deal provides immediate revenue benefits for LayerZero while giving Stargate access to expanded development resources. According to CoinDesk, Stargate will allocate 50% of its top-line revenue to holders for six months after approval.
The acquisition eliminates STG's existing staking rewards program that previously distributed protocol fees to token holders. Future Stargate earnings will fund ZRO token buybacks instead of paying direct yields to STG stakers. Data shows ZRO climbed 4.7% to $2.17 while STG rose 4.9% to $0.19 immediately following the announcement.
The merger creates a unified governance structure under LayerZero's ZRO token framework. This consolidation allows both protocols to operate with shared technical infrastructure and combined treasury resources for accelerated development.
Industry Implications
The LayerZero-Stargate deal reflects broader consolidation trends in the cross-chain bridge sector. According to PANews analysis, total cross-chain transaction volume reached a record $56.1 billion in July 2025, representing 188% growth since September 2024. This surge demonstrates increasing demand for interoperability solutions as institutional capital flows between blockchain networks.
The acquisition faced late-stage competition from Wormhole Foundation, which proposed a rival $110 million bid claiming LayerZero undervalued Stargate's revenue potential. Invezz reported that Wormhole requested a five-day vote delay to finalize its competing offer, but Stargate DAO members ultimately supported LayerZero's revised proposal.
LayerZero now controls approximately 85% of the cross-chain messaging market according to Token Terminal data. Major companies including PayPal, BitGo, and Paxos already use LayerZero services. The Stargate integration positions LayerZero to expand beyond infrastructure into consumer-facing applications while maintaining its technical leadership position.
Traditional finance institutions monitoring blockchain interoperability may view this consolidation as progress toward mature infrastructure standards. The successful DAO governance process demonstrates that decentralized organizations can execute complex corporate transactions comparable to traditional mergers and acquisitions.
Further Reading
For those interested in decentralized governance tools and infrastructure, our comprehensive DAO tooling guide provides detailed analysis of over 100 platforms and tools used in decentralized governance. The guide covers voting mechanisms, treasury management systems, and proposal frameworks that enabled complex decisions like the LayerZero-Stargate acquisition.
