LayerZero's Proposal for $110 Million Stargate Token Merger Aims at Consolidation

What You Should Know

The LayerZero Foundation is looking to acquire Stargate, merging its token system into the LayerZero ecosystem to enhance cross-chain infrastructure.
In this merger, all STG tokens will be converted to ZRO, concurrently terminating Stargate’s governance and rewards program.
Community feedback reveals worries regarding token value and potential reductions in staking income.

Proposal Overview

The LayerZero Foundation has proposed a significant acquisition of Stargate, a closely-associated token economy, intending to consolidate it under the LayerZero umbrella. This action aims to enhance the existing cross-chain capabilities between both protocols, which were developed by a shared founding team.

Stargate’s independent rewards mechanism will conclude, and its tokens will transition to LayerZero’s ecosystem.

Recent Community Reactions: Responses indicating valuation concerns arise as some community members believe the conversion underestimates the STG tokens relative to former price levels and current revenue potential. There are calls for improved terms or additional incentives to alleviate income loss from staking.

The proposal is a significant maneuver within the layer 1 system and could guide future governance and revenue strategies among closely-knit financial protocols. Both ZRO and STG tokens have shown a rising trend, increasing over 20% in the past day.