LayerZero Moves to Absorb Stargate in $110M Token Merger Proposal
LayerZero Foundation has proposed a full-scale merger of Stargate Finance’s STG token into the LayerZero (ZRO) ecosystem, aiming to streamline its cross-chain infrastructure under a single asset. If approved, STG holders would swap their tokens for ZRO at a fixed exchange rate, effectively retiring STG as a standalone governance and rewards token.
Stargate, created by the same team behind LayerZero, has operated as a parallel liquidity bridge with its own staking model. The proposed merger would transfer all protocol revenue—such as the $939,000 paid to STG stakers over the past three months—directly to the LayerZero Foundation. This revenue could be used to support ZRO buybacks, enhancing long-term value for token holders.
The plan also calls for the removal of Stargate’s fixed-yield staking program. Instead, former STG holders would participate in LayerZero’s broader ecosystem, with governance and utility fully centered on ZRO.
According to the foundation, combining the two tokens will simplify token economics, eliminate overlap, and consolidate value creation into one unified asset. However, some community members have expressed concern over the proposed swap terms, arguing that the valuation underrepresents STG’s market potential and past performance. Others are calling for revised terms or added incentives to compensate for the loss of staking income.
The proposal marks one of the largest protocol-to-protocol token mergers of the current cycle and could set a model for future consolidations across DeFi and cross-chain networks.
Both ZRO and STG tokens rallied over 20% following the announcement, data from CoinGecko shows.
