The proposal for LayerZero to acquire Stargate, valued at $110 million, involves swapping all STG tokens for ZRO tokens at a rate of 1 STG to 0.08634 ZRO, effectively dissolving the Stargate DAO and retiring the STG token.

This move, announced on August 10, 2025, aims to consolidate governance and operations under LayerZero’s ecosystem, redirecting Stargate’s $1.4 million annual revenue to ZRO buybacks. The proposal passed with over 97% community approval by August 24, 2025, despite criticism from some STG holders who argued the swap ratio undervalued their tokens and eliminated staking rewards.

Stargate’s veSTG holders, who lock tokens for governance and receive six months of revenue compensation under the acquisition terms. With Stargate’s declining token price (down 95% from its 2022 peak) and reduced Total Value Locked (from $4 billion to ~$500 million).

The dissolution of the Stargate DAO and the retirement of the STG token in favor of ZRO tokens centralizes governance under LayerZero. This reduces community control over Stargate’s operations, shifting decision-making to LayerZero’s framework.

This move could signal a trend where smaller DEXs or cross-chain protocols are absorbed by larger interoperability-focused platforms, potentially reducing the diversity of independent governance models in DeFi. It may lead to streamlined operations but risks alienating communities that value decentralized control.

Stargate’s $1.4 million annual revenue will now fund ZRO buybacks, redirecting economic benefits from STG holders to ZRO holders. The swap ratio (1 STG to 0.08634 ZRO) has been criticized as undervaluing STG, causing discontent among some holders who lose staking rewards.

Acquisitions that prioritize one token over another may create friction with existing token holders, potentially discouraging participation in DEXs with volatile or acquisition-prone tokens. This could push DEXs to adopt clearer tokenomics strategies to retain user trust.

Stargate’s declining metrics—token price down 95% from its 2022 peak and Total Value Locked (TVL) dropping from $4 billion to ~$500 million—highlight challenges in maintaining competitiveness. The acquisition may stabilize Stargate’s operations under LayerZero’s resources but risks further eroding user confidence if perceived as a bailout.

Declining metrics in acquired DEXs could deter users from smaller platforms, favoring larger, more stable ecosystems. This may accelerate consolidation in the DEX market, where only well-funded or interoperable platforms survive.

LayerZero’s acquisition strengthens its position as a leading cross-chain interoperability protocol by integrating Stargate’s bridging capabilities. This enhances LayerZero’s ability to facilitate seamless asset transfers across blockchains.

DEXs may increasingly align with or be acquired by interoperability protocols to remain competitive in a multi-chain world. This could lead to a more interconnected DeFi ecosystem but may reduce the autonomy of standalone DEXs.

Despite 97% community approval, vocal opposition from some STG holders highlights tensions in balancing community interests with strategic acquisitions. The six-month revenue compensation for veSTG holders aims to mitigate this but may not fully address long-term concerns.

Precedents Set by the Acquisition

The use of a token swap (STG to ZRO) sets a precedent for acquisitions where the acquiring entity’s token becomes the primary currency. This could become a common mechanism for DEX acquisitions, simplifying tokenomics but potentially marginalizing original token holders.

Dissolving the Stargate DAO to integrate governance under LayerZero sets a precedent for eliminating independent governance structures in favor of centralized control by the acquirer. This may encourage similar moves by larger protocols, reducing the prevalence of fully decentralized DAOs in DeFi.

Redirecting Stargate’s revenue to ZRO buybacks establishes a model where acquired DEXs’ cash flows support the acquiring protocol’s token value. This could incentivize acquisitions driven by revenue capture, reshaping how DEX profitability is leveraged in deals.

Providing six months of revenue compensation to veSTG holders sets a precedent for addressing locked token holders in acquisitions. Future DEX acquisitions may adopt similar compensatory measures to appease stakeholders with long-term commitments.

This acquisition reflects broader trends in DeFi, where interoperability protocols like LayerZero are consolidating smaller players to build comprehensive ecosystems. Historical examples, such as Uniswap’s acquisition of NFT marketplace Genie in 2022 or SushiSwap’s merger with Yearn.finance in 2020, show similar consolidation efforts, though they typically preserved independent governance or tokens.

OCBC Launches $1bn Blockchain-Enabled U.S. Commercial Paper Programme to Strengthen Dollar Funding

Singapore’s second-largest bank, Oversea-Chinese Banking Corp (OCBC), said on Monday it has established a $1 billion digital U.S. commercial paper programme, a move aimed at bolstering its dollar funding capabilities and signaling how Asian banks are increasingly experimenting with blockchain for capital markets.

U.S. commercial papers are a relatively inexpensive funding source that corporations use to meet immediate cash flow needs. Through this programme, OCBC plans to tap into the $1.4 trillion U.S. commercial paper market, offering itself an alternative channel to raise short-term liquidity in dollars.

The bank noted that the programme has been built on blockchain technology, and it will sit alongside OCBC’s $25 billion conventional U.S. commercial paper programme established in August 2011. J.P. Morgan’s Digital Debt Service application will act as the sole dealer for the digital issuance, reflecting how global investment banks are increasingly positioning themselves at the intersection of blockchain and debt markets. The funds raised will be deployed for general funding purposes, OCBC said.

Kenneth Lai, OCBC’s head of global markets, highlighted how Singapore has become one of Asia’s most active hubs for blockchain innovation in finance.

“Singapore’s blockchain ecosystem is advancing fast, and asset tokenization is gaining real momentum. Our focus is now firmly on commercialization,” Lai said.

He added that the digital issuance complements OCBC’s traditional programme, providing the bank with greater flexibility and efficiency in dollar fundraising.

The first tokenized issuance under the programme took place on August 20, marking OCBC’s entry into blockchain-based debt issuance at scale.

A Trend Among Global Banks

OCBC’s move follows a growing wave of blockchain experiments by major banks in both Asia and the West. Singapore’s largest bank, DBS, for instance, has already tested blockchain-based bond issuances on the government-backed Project Guardian platform, where tokenized assets are piloted in a regulated environment. DBS also launched its own digital exchange, allowing institutional clients to issue and trade tokenized bonds and equities.

In Hong Kong, HSBC has run blockchain-based bond issuance pilots, including tokenized green bonds for the Hong Kong Monetary Authority, demonstrating how the technology can streamline issuance and settlement. Citi, meanwhile, has developed blockchain-based tokenization platforms to modernize debt and equity markets, positioning digital assets as part of its global strategy to transform wholesale banking infrastructure.

The experiments are not confined to Asia. In Europe, banks like Société Générale have issued tokenised bonds on public blockchains such as Ethereum, while in the U.S., Goldman Sachs and JPMorgan have accelerated blockchain adoption with platforms like JPMorgan’s Onyx, which already facilitates billions of dollars in daily transactions.

Why It Matters

For OCBC, the decision to anchor its new programme on blockchain reflects not only the demand for cheaper and more efficient fundraising but also Singapore’s ambition to be a frontrunner in the digital assets race. By blending traditional structures with blockchain-backed innovation, OCBC joins a growing list of global banks that are attempting to prove that tokenization can move from experimental pilots into real-world financial infrastructure.

With the commercial paper market already vast and highly liquid, tokenization promises to reduce settlement times, increase transparency, and potentially broaden investor participation. The move also signals to regulators and market participants that tokenized debt instruments are maturing from pilot projects into fully-fledged funding options.