Wormhole Foundation challenges LayerZero’s $110M Stargate acquisition proposal
Wormhole Foundation (WF) entered the bidding competition for Stargate Finance, challenging LayerZero’s proposed $110 million acquisition.
In an Aug. 20 statement via X, WF argued that LayerZero’s offer significantly undervalues the cross-chain bridge protocol.
LayerZero Foundation announced its acquisition proposal on Aug. 10, offering to purchase all circulating STG tokens at $0.1675 per token through a swap for ZRO tokens.
The proposal requires approval from STG holders through Stargate’s governance process, with a 70% approval threshold needed for passage.
Wormhole Foundation contended that LayerZero’s bid fails to reflect Stargate’s true value, citing the protocol’s treasury holdings and recent performance metrics.
Further, Wormhole shared that Stargate maintains over $92 million in treasury assets, including $76 million in stablecoins and $16 million in Ethereum, while demonstrating substantial growth momentum.
Performance drives valuation dispute
On-chain data shows that Stargate processed $4 billion in bridge volume during July 2025, representing a 10x year-over-year increase. As of Aug. 20, it had $348 million in total value locked (TVL) across more than 80 chains.
According to the Wormhole Foundation:
“STG holders deserve better. The current bid undervalues the protocol’s assets, brand, codebase, and team.”
The WF added that these fundamentals justify a “meaningfully higher offer” than LayerZero’s proposed valuation.
LayerZero Foundation defends its pricing, noting Stargate’s backing of $0.14444 per circulating token compared to its trading price of $0.1637 per token at proposal time. It added that based on its calculations, the offer represents a premium on both metrics.
Differences beyond offers
LayerZero positions the acquisition as ecosystem consolidation, noting Stargate’s established infrastructure and user base. The foundation plans to direct all future Stargate excess revenue toward ZRO token buybacks while expanding the protocol’s mandate beyond traditional bridging services.
In addition, LayerZero argued that unified governance would eliminate resource conflicts between potentially competitive protocols.
At the same time, Wormhole Foundation proposed an alternative vision combining “Stargate’s unified liquidity pools with our broad ecosystem of integrations.”
The foundation said this approach would generate “higher volumes, higher revenues, and greater stickiness,” benefiting both STG and W token holders. It also requested a five-business-day suspension of the ongoing on LayerZero’s proposal vote to allow time for due diligence and bid preparation.
The governance vote requires a 1.2 million veSTG token quorum with 70% approval for LayerZero’s proposal to pass. The proposal was amended to provide additional compensation for veSTG stakers through six months of revenue distribution.
The amendment happened following criticism about the equal treatment of locked versus unlocked tokens.
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