Stargate price rose sharply as the Wormhole Foundation announced its intention to enter a bidding war for the cross-chain protocol.
- Stargate price jumped by more than 10% amid news that Wormhole Foundation wants to acquire the cross-chain protocol.
- LayerZero has bid $110 million for the protocol, but Wormhole feels this undervalues Stargate.
The price of Stargate (STG) jumped more than 10% to climb from lows of $0.1633 and hit $0.182 across crypto exchanges on Aug. 20.
STG, native to the cross-chain protocol Stargate, had dipped in the wake of the broader crypto downturn that saw top altcoins crash to support levels on Tuesday, Aug. 19.
However, as Bitcoin (BTC) bid to bounce above $114k and Ethereum (ETH) reclaimed the $4,300 level, Stargate’s price shot up. The double digit gains for STG however coincides with another development – a key announcement from the Wormhole Foundation.
Wormhole Foundation wants to acquire Stargate
Stargate has attracted the attention of Wormhole Foundation, the entity supporting the Wormhole (W) ecosystem.
Specifically, it believes it can offer a better deal if it acquires Stargate instead of LayerZero (ZRO).
On Aug. 11, LayerZero outlined a bid to acquire Stargate, and on Aug.17, Stargate announced that a snapshot for the proposed acquisition was live.
Terms include a figure of $110 million, with all circulating STG set to be swapped for ZRO, a revenue-sharing model, and the transition of Stargate operations to the LayerZero Foundation.
Now, the Wormhole Foundation says Stargate should pause the snapshot and allow for a competitive bidding process that will offer a deal that reflects Stargate’s worth and growth potential.
LayerZero’s offer of $110 million in ZRO for about $76.47 million in stablecoins and $15.9 million in ETH, and the “permanent capture of all future protocol revenue,” is low for Stargate, the Wormhole Foundation contended.
“Treasury alone is ~$92M, excluding STG tokens, yet the proposed deal hands over assets and ongoing economic upside for only $110M in token consideration. It doesn’t create a compelling offer, which values Stargate’s ongoing business at an unreasonably low number,” they noted.
Stargate protocol growth
In requesting a pause to the snapshot, the platform said its request is because STG holders deserve to get a better deal.
“The current bid undervalues the protocol’s assets, brand, codebase, and team. We’re prepared to submit a meaningfully higher offer, and we believe a competitive process will drive even more value for everyone involved,” WF wrote.
Stargate’s snapshot vote was scheduled to end on August 24 at 00:15 a.m. GMT.
The STG token traded to highs of $4.28 in April 2022, but has struggled to hit these highs since. However, the Stargate protocol has experienced notable growth, with bridge volume up 10x since July 2024 and the protocol’s total value locked hitting $345 million.
Stargate has gone live across more than 80 chains.
