Cross-blockchain bridge Wormhole is looking to bid against LayerZero’s $110 million bid to acquire crypto protocol Stargate, arguing LayerZero’s bid doesn’t “create a compelling offer.”
The Wormhole Foundation said in a post on Stargate’s forum on Wednesday that it deserves “a more competitive process” after the LayerZero Foundation’s initial $110 million bid earlier in August to buy the platform failed to resonate with the community. LayerZero updated its offer on Sunday to a greater reception.
“It doesn’t create a compelling offer, which values Stargate’s ongoing business at an unreasonably low number,” Wormhole wrote of LayerZero’s bid. “We are prepared to submit a meaningfully higher bid.”
The impending bid could set up a bidding war for Stargate, which LayerZero developed and launched in 2022. LayerZero’s deal would see the platform come back under its umbrella, but many Stargate Finance (STG) tokenholders slammed its initial offer as unfair.
Wormhole asks for vote pause on LayerZero’s bid
Wormhole asked the Stargate community to suspend the vote on LayerZero’s bid for five business days to allow it time to finalize its offer.
It added that it “would appreciate additional time to conduct research and to speak with the Stargate team,” and it could “improve upon the current offer if more time is allowed to conduct a proper process.”
It asked for a list of assets, its financials since its launch, user and traffic metrics, its liabilities and if it’s facing any ongoing lawsuits or regulatory actions.
Wormhole pitched its potential acquisition of Stargate as forming a “market-dominant ecosystem.”
“Stargate brings deep, unified liquidity pools and proven user demand, while Wormhole commands broad ecosystem integration across dozens of blockchains and protocols, as well as key growth areas in crypto, like RWAs [real world assets],” it wrote.
Wormhole did not immediately respond to a request for comment. The LayerZero Foundation could not be reached for comment.
Stargate community backs LayerZero’s updated bid
LayerZero updated its proposal to acquire Stargate on Sunday to include a revenue-sharing period for those who had staked their Stargate tokens, which has seen wide support from Stargate’s community.
LayerZero’s final proposal said it would give staked Stargate tokenholders half of all top-line Stargate revenue for six months, with the remaining half used to buy back its LayerZero (ZRO) token.
In comparison, its initial proposal pitched using Stargate’s excess revenue for a ZRO buyback program.
LayerZero said all circulating STG would be swapped for ZRO at a ratio of 1 STG to 0.08634 ZRO — aligning with its original proposal.
The new proposal has seen 88.6% of STG holders vote in favor, accounting for 6.6 million tokens.
Some Stargate community members had called LayerZero’s original pitch “not attractive at all” as it didn’t give advantages to STG holders, while others said the token swap should be upped to a 1:1 basis.
Wormhole, Stargate, LayerZero tokens gain
The tokens tied to all three platforms all saw gains on the day alongside a modest lift in the wider crypto market.
The Wormhole (W) token is up 6.3% in the past 24 hours to just over 8 cents, having seen a boost around the time of its post to Stargate’s forum, according to CoinGecko.
Stargate’s token has gained 6% on the day, also climbing around the time of Wormhole’s forum post to a 24-hour high of over 18 cents, which has since cooled to just over 17 cents.
LayerZero’s token has also seen gains, a modest 3.6% on the day to $2, joining gains in the wider crypto market as Bitcoin (BTC) and Ether (ETH) are up 1% and 5.2%, respectively.
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