Wormhole Foundation Challenges LayerZero’s Bid for Stargate Finance
Wormhole Foundation (WF) has thrown its hat into the ring in the bidding war for Stargate Finance, challenging LayerZero’s proposed $110 million acquisition. In a statement released on Aug. 20 via X, WF argued that LayerZero’s offer severely undervalues the cross-chain bridge protocol.
LayerZero Foundation had initially announced its acquisition proposal on Aug. 10, offering to buy all circulating STG tokens at $0.1675 per token through a swap for ZRO tokens. The proposal is subject to approval from STG holders through Stargate’s governance process, requiring a 70% approval threshold for passage.
However, Wormhole Foundation contested that LayerZero’s bid does not accurately reflect Stargate’s true value, pointing to the protocol’s substantial treasury holdings and recent performance metrics. Stargate reportedly holds over $92 million in treasury assets, including $76 million in stablecoins and $16 million in Ethereum, while showing significant growth momentum.
Performance Drives Valuation Dispute
On-chain data reveals that Stargate processed $4 billion in bridge volume in July 2025, marking a 10x year-over-year increase. As of Aug. 20, the protocol boasted $348 million in total value locked (TVL) across more than 80 chains. Wormhole Foundation insisted that STG holders deserve a better offer, emphasizing that the current bid undervalues the protocol’s assets, brand, codebase, and team.
LayerZero Foundation defended its pricing, noting that Stargate’s backing of $0.14444 per circulating token exceeds its trading price of $0.1637 per token at the time of the proposal. The foundation argued that its offer represents a premium on both metrics.
Differences Beyond Offers
LayerZero positioned the acquisition as a move towards ecosystem consolidation, leveraging Stargate’s established infrastructure and user base. The foundation plans to channel all future Stargate excess revenue towards ZRO token buybacks while diversifying the protocol’s services beyond traditional bridging.
In contrast, Wormhole Foundation proposed a different approach, suggesting a fusion of “Stargate’s unified liquidity pools with our broad ecosystem of integrations.” The foundation believes this strategy would generate higher volumes, revenues, and loyalty, benefiting both STG and W token holders. It also called for a temporary suspension of LayerZero’s proposal vote to allow for thorough due diligence and bid preparation.
The governance vote necessitates a 1.2 million veSTG token quorum with a 70% approval threshold for LayerZero’s proposal to proceed. An amendment was made to the proposal to offer additional compensation for veSTG stakers through six months of revenue distribution, addressing concerns about the equal treatment of locked versus unlocked tokens.
In conclusion, the battle for Stargate Finance is heating up as Wormhole Foundation challenges LayerZero’s bid, highlighting differing visions for the future of the protocol and its potential impact on the DeFi landscape.