Who Wins the Cross-Chain Bid: Wormhole Foundation Challenged LayerZero

Wormhole Foundation challenged LayerZero and has presented a counter offer to challenge a bid made by rival cross-chain messaging company LayerZero to buy Stargate.

Source : X

This may result in a bidding war between both the renowned companies for the acquisition. Let's find out why the Wormhole Foundation challenged LayerZero for Stargate acquisition

LayerZero’s Bold $110M Play for Stargate

The proposal came earlier this month to spend $110 million to acquire the Stargate ecosystem and incorporate it into its technology stack. All tokens would be converted to ZRO as a result of the merger, and tokens would be repurchased using Stargate's almost $1 million in income during the previous three months.

The proposal calls for exchanging all circulating STG tokens, including staked and voting, for ZRO at a ratio of 1 STG for 0.08634 ZRO. The DAO would also be disbanded. The proposal weighs high because the protocol was built by the same team that developed StargateFinance and the two firms share cofounders also.

Wormhole Strikes Back with Counter-Bid

But, another heavyweight in the cross-chain space, isn’t letting its rival walk away so easily. On Wednesday, the Wormhole Foundation challenged LayerZero competing bid, claiming it has been undervalued.

The foundation argued that Stargate’s metrics—$4 billion in July bridge volume, $345 million TVL, and $92 million in treasury assets—paint a far more valuable picture than “STG holders deserve better,” the team said in a statement. “We’re prepared to submit a meaningfully higher offer.”

The Numbers Game: What’s Stargate Really Worth?

Its reported assets include:

• $76.47M in stablecoins

• $15.9 million in Ethereum

• $55 million in tokens

• $5.24M in other holdings

In addition, the protocol holds $345 million in total value locked (TVL) and generates roughly $2M in annual revenue.

The Bigger Picture: Cross-Chain Wars Intensify

ZRO’s proposal priced STG tokens at just $0.1675 apiece, based on the conversion ratio. Yet recent revenues and war chest suggest a higher valuation may be justified.

The Wormhole Foundation challenged LayerZero "doesn't create a compelling offer, which values Stargate's ongoing business at an unreasonably low number.

But one thing is clear if either player secures Stargate, they gain a massive advantage in liquidity, user trust, and market coverage. The team humbly requests that the ongoing Snapshot be halted for five business days in order to give us enough time to complete our offer and optimize value for STG token holders."

Wormhole Foundation challenged LayerZero What This Means for STG, ZRO, and W Holders

• Investors may see unforeseen fluctuations in token values as a result of the drama: STG holders stand to benefit if a bidding war raises offers. The coin is now trading at $0.174419 USD, up 6.14%.

• Stargate's integration could be advantageous to ZRO holders, but only if Layer Zero prevails. ZRO is now trading at $2.01, up 3.89% over the past day.

• If it can successfully execute a strategic purchase, demand in its W token may increase. Today's price of W is $0.080635 USD with a hike of 6.17%.

The looming question: Wormhole Foundation challenged LayerZero offer is significantly good, or is this a strategic move to stall the deal? How this will play out and how much Wormhold plans to provide are unknown.