Original Title: "Wormhole Interferes with Price and Acquisition, Can LayerZero Still Push Forward with Stargate Acquisition?"

Original Author: Azuma, Odaily Planet Daily

The proposed "LayerZero Acquisition of Stargate" that has entered the formal voting process has suddenly taken a new turn.

On August 21, LayerZero's direct competitor, the Wormhole Foundation, publicly announced that LayerZero's approximately $110 million acquisition offer for Stargate undervalued Stargate's protocol assets and growth. Therefore, Wormhole plans to submit a higher bid and has requested a 5-day pause on the current Snapshot vote to refine the bidding process and safeguard STG holders' interests.

Background Summary: LayerZero Initiates Acquisition

The acquisition proposal by LayerZero for Stargate can be traced back to August 11—refer to the article "LayerZero Proposes Acquisition of Stargate: Tokens Surge Over 20% But Face Strong Opposition from Community."

In the early morning of that day, the LayerZero Foundation posted a draft proposal in Stargate's governance forum, proposing to acquire Stargate for a total price of $110 million.

Specifically, the LayerZero Foundation proposed to exchange all circulating STG (including STG in staking/voting status) at a rate of 1 STG: 0.08634 ZRO at the price of $0.1675 per STG (slightly higher than the market price at the time) and $1.94 per ZRO. After the acquisition, Stargate will be more deeply integrated into the LayerZero ecosystem, the Stargate DAO will dissolve, and all future excess revenue generated by Stargate will be used in a buy-back program to reduce the circulating supply of ZRO.

Following the proposal announcement, LayerZero and Stargate's official accounts interacted frequently, emphasizing "win-win cooperation." As a result, ZRO and STG both surged. However, upon closer examination of the discussions in Stargate's governance forum, the majority of Stargate community members expressed opposition to the acquisition proposal, believing that LayerZero's offer greatly undervalued Stargate.

Progress Update: Voting Initiated, Whale Dominance

On August 18, the proposal was officially launched for voting on Snapshot, where STG holders will collectively decide whether to accept the acquisition offer. In contrast to the original proposal, LayerZero did not increase the acquisition bid but instead claimed they would share 50% of Stargate's total revenue over the next six months with veSTG holders (i.e., users who directly voted).

After the voting initiation, not only did it quickly surpass the minimum quorum requirement, but the support rate also briefly surged to over 97% (according to the rules, anything above 70% at the end results in approval). LayerZero's Co-founder Bryan Pellegrino even proudly mentioned on a CounterParty podcast participation: "This is the largest turnout in a vote in Stargate history."

Such a one-sided voting pattern was not surprising. Although many Stargate community members were against the offer, LayerZero and Stargate, as a fully integrated backend protocol and frontend product, were already challenging to perceive as separate entities. Even half of the board members of the Stargate Foundation were appointed by LayerZero. Considering the interaction narrative of LayerZero and Stargate, it's not difficult to imagine that both sides' stakeholders already control enough voting power. In essence, this was a "vote that was destined to pass but needed a show" kind of situation.

Wormhole's Machination: Even if we can't snatch it, we'll still annoy you

Perhaps not even LayerZero and Stargate themselves expected Wormhole to intervene at such a critical moment.

As of the time of writing, unlike the "harmonious scene" of frequent interactions between LayerZero and Stargate after LayerZero proposed the acquisition, there was no relevant activity on Stargate's official Twitter after Wormhole expressed intent to acquire. Additionally, the LayerZero side only had Co-founder Bryan's seemingly responsive comment: "This cannot happen."

As of the time of writing, Wormhole has not made a formal offer, and the reason is somewhat amusing—a claim by Wormhole that they need more time to conduct due diligence on Stargate's valuation because they are not as familiar with Stargate, unlike LayerZero, who is so familiar that they hold half of the foundation board seats...

Based on the current situation, the subsequent development of this event can only be one of the following four scenarios, and regardless of the outcome, Wormhole will welcome it.

· The first scenario is if Stargate temporarily suspends voting, leading to a bidding war between Wormhole and LayerZero, assuming Wormhole emerges victorious. In this case, Wormhole will directly take away the core product of its biggest competitor, thus capturing more market share.

· The second scenario involves LayerZero winning the bid, or LayerZero unilaterally increasing its offer and advancing the proposal. In this case, LayerZero will pay more funds to STG token holders, while Wormhole can sit back and watch its competitor spend more without spending a penny.

· The third scenario is if Stargate, citing that the process has already begun, disregards Wormhole's bid, and the proposal continues as planned (with current support still high). If LayerZero completes the acquisition in this scenario, STG token holders who missed out on a higher bid will surely be frustrated, and Wormhole would be pleased to see community discord on the LayerZero side.

· The fourth scenario is if Stargate forcefully pushes through the vote, and assuming the proposal ultimately fails due to community opposition (current support still over 88%, very low likelihood of failure), Wormhole will have successfully obstructed the plan.

Overall, I personally lean towards the second and third scenarios, as Stargate is the core product of LayerZero, which would definitely not want to bear the consequences of losing that product.

Fluid's CEO DMH succinctly summarized the current situation: "Evidently, Stargate and LayerZero had already reached a consensus before the proposal; Wormhole is furious that LayerZero managed to buy Singapore with a bag of rice; hence, Wormhole chose to increase its bid, attempting to disrupt LayerZero's acquisition plan; but it is a well-known fact in the market that Stargate will eventually be absorbed by LayerZero, so there will be no dramatic turn of events."

Wormhole may have known the final outcome before placing their bid, but by simply using words, they have managed to greatly upset their biggest competitor and incur no losses themselves, making this move a top-tier strategic maneuver.

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