tl;dr
A proposal has been made for LayerZero to acquire Stargate by swapping all STG tokens for ZRO tokens at a fixed rate, valuing the merger at around $110 million. If approved, STG will lose its operational role, Stargate DAO will be dissolved, and excess Stargate revenue will be used to buy back ZRO t...
A proposal to merge LayerZero and Stargate has been introduced, wherein all STG tokens would be swapped for ZRO tokens. This potential merger, valued at approximately USD 110 million, signals a significant shift and may serve as a cautionary tale for other multi-token and sub-DAO models.
The LayerZero Foundation plans to acquire Stargate and its STG token, offering a fixed-rate redemption where each STG token can be exchanged for 0.08634 ZRO, based on ZRO’s market price of $1.94 at the time of the proposal. If the merger is approved, STG will lose its operational role, and the Stargate DAO will be dissolved. Excess revenue generated from Stargate is intended to be used for buying back ZRO tokens, a strategy seen in other projects such as Chainlink, potentially reducing ZRO’s circulating supply and shifting its price and risk-return dynamics.
The proposal includes a public discussion phase followed by a three-day voting period requiring a 70% approval threshold with a veSTG-based quorum. Community responses are mixed; some supporters believe managing two tokens splits focus and diminishes effectiveness, endorsing the merger as inevitable. Detractors point to the limited advantages for STG holders, citing that revenue-sharing benefits will not transfer to ZRO holders, leaving STG holders with little incentive besides token possession.
Critics also raise concerns about centralized governance following the dissolution of Stargate DAO and its integration under LayerZero. The success of the merger deal may ultimately depend on the swap process, the redemption contract’s timeframe, and incentives for veSTG holders and stakers.
The market responded swiftly to the merger news, with STG and ZRO tokens surging by roughly 17% and 22%, respectively. These price jumps reflect both speculative merger optimism and rapid market maker reactions, showcasing how impactful such proposals can be in the cryptocurrency landscape.