The cross-chain bridge protocol Wormhole plans to counter LayerZero's $110 million acquisition offer for the crypto protocol Stargate, arguing that LayerZero's proposal does not "constitute an attractive plan."
The Wormhole Foundation posted on the Stargate forum on Wednesday, stating that after LayerZero Foundation's initial $110 million acquisition offer earlier this month failed to resonate with the community, Stargate "should have a more competitive process." LayerZero updated its offer on Sunday, receiving a better response.
Wormhole commented on LayerZero's offer, stating, "This does not constitute an attractive proposal, as its valuation of Stargate's ongoing operational business is significantly below a reasonable level. We are prepared to submit a clearly higher bid."
The upcoming bidding could trigger a bidding war for Stargate. Stargate was developed by LayerZero and launched in 2022. If LayerZero's deal goes through, Stargate would once again fall under its umbrella. However, many Stargate Finance (STG) token holders believe the initial offer is unfair.
Wormhole has requested that the Stargate community pause voting on LayerZero's offer for five business days to allow time to finalize its bid.
Wormhole added, "We hope to have more time for research and communication with the Stargate team," and stated that if more time were available for a proper process, "the current offer could be improved."
Wormhole also requested a list of Stargate's assets, financial data since its launch, user and traffic metrics, and liabilities. Additionally, it asked for disclosure of any pending litigation or regulatory actions.
Wormhole positions its potential acquisition of Stargate as a move to create a "market-leading ecosystem."
Wormhole wrote, "Stargate brings deep unified liquidity pools and validated user demand, while Wormhole has achieved extensive ecosystem integration across dozens of blockchains and protocols, with a presence in key growth areas of crypto such as RWA (real-world assets)."
As of the time of publication, Wormhole had not commented on the matter, and the LayerZero Foundation could not be reached.
LayerZero updated its proposal to acquire Stargate on Sunday, which includes a revenue-sharing mechanism for users staking Stargate tokens, a move that has received broad support from the Stargate community.
LayerZero's final proposal states that within six months, half of Stargate's total revenue will be distributed to STG token holders who stake their tokens, while the remaining half will be used to repurchase LayerZero (ZRO) tokens.
In contrast, its initial proposal planned to use Stargate's excess revenue for the ZRO repurchase program.
LayerZero stated that all circulating STG will be exchanged at a rate of 1 STG to 0.08634 ZRO, consistent with the initial proposal.
The new proposal received 88.6% support from STG holders, involving 6.6 million tokens.
Some members of the Stargate community have previously stated that LayerZero's initial plan was "unattractive" because it did not provide advantages for STG holders, and some believe the token exchange ratio should be adjusted to 1:1.
The three major platform-related tokens all rose that day, and the overall crypto market also saw a slight rebound.
According to CoinGecko data, the Wormhole (W) token rose 6.3% in the past 24 hours to above 8 cents, receiving a boost during its post on the Stargate forum.
The Stargate token rose 6% that day, also climbing to a 24-hour high of above 18 cents during Wormhole's posting, before falling back to above 17 cents.
LayerZero tokens also recorded gains, rising slightly by 3.6% to $2, in line with the overall crypto market, where Bitcoin (BTC) and Ethereum (ETH) rose by 1% and 5.2%, respectively.
Related: All roads lead to inflation: Whether the Federal Reserve cuts rates or not, Bitcoin (BTC) may benefit.
Original article: “Wormhole plans to propose a competing bid to counter LayerZero's $110 million acquisition offer for Stargate”
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