LayerZero Proposes $110 Million Merger With Stargate Tokens to Streamline Ecosystem

LayerZero Proposes $110M Token Merger With Stargate in Major Ecosystem Consolidation

The LayerZero Foundation has announced a proposal to merge Stargate Finance’s token economy with its own, converting all STG tokens into ZRO at a fixed exchange rate. The move would retire STG as a standalone governance and reward token, consolidating both protocols under a single asset.

Stargate, which operates a prominent cross-chain liquidity bridge, was developed by the same team behind LayerZero, with both projects sharing co-founders. The proposed merger would see Stargate’s revenue—over $930,000 paid to STG stakers in the last quarter—redirected to the LayerZero Foundation. That revenue could then be used to fund ZRO token buybacks, benefiting existing holders.

In addition to streamlining governance and utility under ZRO, the merger would end Stargate’s staking program, eliminating fixed-yield payouts. Former STG holders would instead participate in the broader LayerZero economy, though without dedicated staking incentives.

LayerZero argues the integration will reduce redundancy, focus value within one unified token, and strengthen the long-term scalability of its cross-chain infrastructure. However, the proposal has drawn mixed reactions. Some STG holders say the swap ratio undervalues their tokens, especially given historical prices and ongoing bridge revenues. Others are calling for enhanced terms or alternative mechanisms to compensate for the loss of staking rewards.

If passed, the merger would be one of the largest token consolidations in the current crypto cycle and could influence how other interoperable projects approach governance and ecosystem streamlining.

Both STG and ZRO tokens jumped more than 20% following the announcement, according to CoinGecko data.