Recap · August 31, 2025 · 29:37
Bryan Pellegrino: Biggest Acquisition in Crypto, Stargate, Building LayerZero and More | TG Podcast
The Signal
LayerZero CEO Bryan Pellegrino makes the case for acquiring Stargate, the bridge his team originally invented and built but launched as a separate DAO. The deal would retire STG, convert holders into ZRO at a fixed ratio, and direct all future Stargate revenue into LayerZero buybacks. His argument is less about rescuing Stargate than ending a split that now forces LayerZero to build adjacent products that could compete with it — while a late expression of interest from Wormhole raises the stakes for DAO voters.
Key Takeaways
- 01
Stargate was always LayerZero-built
Pellegrino says his team invented Stargate, wrote every contract for both V1 and V2, and handled the technical work. It was separated into its own DAO because LayerZero needed to look like an agnostic base layer in the regulatory environment of the time, not because the products were technically unrelated.
- 02
Success created an alignment problem
Stargate became a leading bridge with more than $70 billion in volume and roughly $90–95 million in protocol-owned liquidity. But as LayerZero began building a broader money-movement stack for major issuers and institutions, its new products started edging into Stargate's territory, creating the risk of cannibalizing something it had built.
- 03
The offer merges both economics and identity
The proposal fixes a ZRO-for-STG conversion ratio, sunsets STG and the DAO, and gives veSTG holders six months of protocol revenue. After that, Pellegrino says 100% of Stargate-related revenue would feed LayerZero's buyback program — one ecosystem, one token, and one consumer-facing product suite.
- 04
The founders are abstaining
LayerZero founders and team members still hold nearly all the Stargate tokens they received and could have meaningful influence, but Pellegrino says they will not vote on their own acquisition proposal. The decision is left to the DAO, with a 70% approval threshold; at the time of the conversation, support was running near 90%.
- 05
Wormhole's move is not yet a competing bid
Wormhole asked for customer, technical, and financial information and signaled acquisition interest, but Pellegrino characterizes it as an intent rather than a priced offer. His blunt view is that Stargate would wither inside a rival ecosystem, whereas LayerZero could consolidate its product pipeline into Stargate and scale its revenue dramatically.
On the Record
“We wrote every line of code of Stargate. We invented V1. We invented V2.”
“This will be the largest DAO acquisition that's ever happened.”
“We will not vote on our own proposal.”
“I want one ecosystem. I want everyone to know it's one token. It's one place. There is only one bet to make.”
The Breakdown
The founder behind LayerZero
Pellegrino sketches an unconventional path: computer science, dropping out, eight years playing professional poker, then building and selling companies before founding LayerZero with two longtime collaborators. The protocol's job is simple to state and difficult to execute — let independent blockchains communicate — and he says hundreds of billions of dollars in assets and transfers now depend on it.
Why Stargate became a separate DAO
LayerZero needed an application that could move the same asset between chains without every DeFi project building its own bridge. The team created Stargate and turned it into a separate DAO so the underlying messaging protocol could remain neutral. That structure fit the moment, but it also produced two brands and two economic systems that users routinely mistake for one.
Why buy it now
LayerZero's institutional work and new money-movement products increasingly sit next to — or compete with — Stargate. A deal explored three months earlier did not work economically, but the parties found terms shortly before the proposal went live. Pellegrino wants to stop maintaining parallel ecosystems and put LayerZero's new consumer-facing products through Stargate.
How the acquisition works
The bid was worth about $110 million when posted and rose with ZRO afterward because the token exchange ratio was fixed. STG would be retired, veSTG holders would receive six more months of revenue, and all subsequent Stargate revenue would support ZRO buybacks. Pellegrino also points to protocol-owned liquidity backing STG as a floor that holders can weigh against the premium in the offer.
DAO vote, founder stake, and abstention
The proposal follows a forum period and snapshot vote, with 70% support required. LayerZero insiders retain a substantial STG stake, but Pellegrino commits them to abstaining because it is their own transaction. He draws a distinction between that conflict and future proposals that might damage Stargate, where he says he would use his holdings to defend the protocol.
The Wormhole complication
Wormhole's last-minute letter asks the Stargate Foundation for diligence materials but contains no price or firm terms, so the active vote continues. Pellegrino argues that LayerZero has the clearer operating plan: consolidate products under Stargate, ship quickly, grow annual revenue from a few million into the tens of millions, and route it all toward one token. His closing pitch is that the protocol and token holders should prosper through the same decision.
Distilled from the episode transcript · Counterparty Recap Desk
