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LayerZero Moves to Absorb Stargate in $110M Token Swap, Community Pushes Back
In a surprising move, LayerZero announced its plans to absorb Stargate in an enormous $110 million token swap. The proposal has sparked a heated debate among the cryptocurrency community, with many pushing back against the terms of the deal.
According to reports, the proposed acquisition would see Stargate’s STG tokens converted into LayerZero’s native ZRO tokens at a fixed exchange rate of 1 STG for 0.08634 ZRO. While this move could potentially streamline operations and accelerate development across both protocols, many users are expressing concerns about the swap ratio undervaluing their tokens.
Critics argue that Stargate’s revenues justify a higher valuation in any token merger and point out the lack of a revenue-sharing model in ZRO. In contrast to other blockchains, this move would remove direct staking rewards for STG holders, who currently receive payouts totaling nearly $939,000 over the past three months.
Despite concerns from some community members, LayerZero has emphasized that the acquisition aims to accelerate the development of both protocols by consolidating governance and utility under a single token. This centralization could simplify integration processes across cross-protocol bridges, ultimately enhancing user experience.
The proposed deal is currently open for public comment before moving to a community vote. If approved, this would mark one of the largest token consolidations in the current crypto market cycle. Its outcome may influence how similar cross-protocol integrations are structured in the future.
With LayerZero’s ZRO token surging over 23% in just 24 hours and trading at $2.44 according to CoinGecko, it remains to be seen whether this proposal will garner sufficient support from the community or prompt a significant market reaction upon its approval.
Source: coincentral.com
