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Cryptocurrencies have started the week on an optimistic note as Bitcoin reclaimed $120,000 and Ethereum trades above $4,300 early on Monday.
While the markets brace for an altseason, the LayerZero Foundation has introduced a proposal to purchase the Stargate bridge.
Known for the cross-chain interoperability network LayerZero, the Foundation has offered Stargate DAO $110 million to acquire the bridge and discontinue the native STG coin.
The LayerZero Foundation has proposed an acquisition of Stargate (STG). Bring the Bridge Home.
Meanwhile, STG holders will vote on this proposal, which requires a 70% majority, in the coming days.
A successful acquisition would mean dissolving the Stargate DAO and phasing out STG tokens, with holders swapping them for ZRO at a determined conversion rate.
The proposal reads:
If approved, STG holders will be informed of how to swap for ZRO. LayerZero Foundation will assume ownership and operation of all Stargate Finance duties. Stargate will continue without interruption; users of the Stargate bridge will not experience any downtime or changes in functionality during the transition.
Notably, the LayerZero Foundation aims to bring an active cross-chain bridge and its control to support its long-term goals.
Traders and analysts have shifted attention to tokens’ performance following the announcement.
ZRO and STG recorded substantial rallies in the past few hours, gaining 22% and 15% on their daily price charts.
Accelerating the protocols’ roadmap
The proposal indicates that the acquisition is beyond a financial transaction.
It represents a strategic step toward bolstering the projects’ development.
With this merging, the ecosystems will attain technical alignment, a unified brand recognition, and enhanced resources.
STG to ZRO token swap
The terms include STG holders swapping their assets for ZRO and effectively retiring the former and making the latter the sole token for the merged ecosystem.
If the proposal is approved, STG will cease to have any role in the operations of Stargate Finance. Each STG token will become redeemable for 0.08634 ZRO through a fixed-rate redemption contract, based on ZRO’s market price of $1.94 at the time of proposal. The swap contract will remain open indefinitely.
Stargate’s rise and challenges
The LayerZero team launched Stargate in 2022.
The bridge attracted attention due to its reliability, with its volume topping $70 billion.
STG coin traded at above $4 at its peak.
Nonetheless, the altcoin failed to keep pace despite the bridge’s continued activity.
STG trades at around $0.1940 after surrendering 50% of its value within the past twelve months.
The community has debated the disconnect between Stargate’s adoption and STG’s performance, and the proposed acquisition might address the gap by discontinuing STG.
ZRO price outlook
LayerZero token gained over 22% in the past 24 hours to trade at $2.30 as of this publication.
The massive 540% 24-hour volume uptick suggests robust investor activity.
Chart by CoinMarketCapThat positions ZRO for more gains in the near term.
Crossing $2.80 might propel the coin past $3 psychological mark in the upcoming sessions.
Also, STG trades at $0.1940 after soaring more than 15% in the past day.
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