The Ethereum Foundation has released a roadmap to bring end-to-end privacy features to the Ethereum network, a layer-1 (L1) smart contract blockchain, and rebranded its “Privacy & Scaling Explorations” initiative to “Privacy Stewards of Ethereum” (PSE).

PSE said it aims to bring privacy solutions to the protocol, infrastructure, networking, application, and wallet layers in Friday’s announcement, and laid out several key goals for the next 3-6 months.

These included enabling private transfers through the development of the PlasmaFold layer-2 network, confidential voting, and privacy in decentralized finance (DeFi) applications. 

The roadmap also proposed exploring a workaround for personal data being broadcast through remote procedure call (RPC) services, and private identity solutions through zero-knowledge (ZK) proofs, a way of verifying information without revealing the specific contents of that information. PSE outlined its mission:

“Ethereum deserves to become core infrastructure for global digital commerce, identity, collaboration, and the internet of value. But this potential is impossible without private data, transactions, and identity. We take responsibility within the Ethereum Foundation for ensuring privacy goals at the application layer are reached.

“We’ll work with protocol teams to ensure that any L1 changes needed to enable strong, censorship-resistant intermediary-free privacy take place,” the announcement continued.

Privacy has always been at the core of the cypherpunk ethos that spawned cryptocurrencies, and as crypto gains widespread adoption and the attention of governments, the crypto community is increasingly concerned about evolving digital financial surveillance methods.

Related: EU Chat Control hinges on Germany’s decision

The US government proposes government identity checks for DeFi

US government officials are currently weighing regulations for the crypto industry and markets, which include potential surveillance measures to track the activity of participants.

The US Department of the Treasury, headed by secretary Scott Bessent, is exploring proposals to add government identity checks to smart contracts, which has drawn backlash from the crypto community.

Ethereum co-founder Vitalik Buterin has repeatedly said that privacy is an essential human right. In April, Buterin warned that transparency is more of a bug, rather than a feature, in the digital age. 

Buterin said that privacy was needed to protect individuals in a time of growing state power and large, centralized corporations. 

Magazine: Ethereum’s roadmap to 10,000 TPS using ZK tech: Dummies’ guide

]]> https://earlybirdsinvest.com/ethereum-foundation-introduces-privacy-stewards-for-ethereum-and-roadmap/feed/ 0 58311 https://earlybirdsinvest.com/ethereum-foundation-grants-update-wave-iii/ https://earlybirdsinvest.com/ethereum-foundation-grants-update-wave-iii/#respond Wed, 03 Sep 2025 12:51:10 +0000 https://earlybirdsinvest.com/ethereum-foundation-grants-update-wave-iii/

We’ve been hard at work getting to know so many amazing people and projects, and are extremely excited to announce the recipients of the Wave III of the Ethereum Foundation Grants Program!

We kicked off 2018 with a blog post to galvanize scalability research for first and second-layer solutions. Since then, we’ve committed over $11M to 52 projects dedicated to advancing the Ethereum ecosystem. Grants have funded multiple plasma and state channel implementations, diverse client research, enhanced developer frameworks, security audits, and so much more (find them all in the previous posts: Wave I & Wave II)!

A Look into the Selection Process

Since the Grants Program has picked up, we’ve received feedback requesting greater transparency into our processes and a deeper look into the various types of projects considered. Here’s a funding snapshot and grant process update:

Funding Snapshot

The EF Grant Program provided more than $11M in support to 52 projects since early 2018 (Waves I, II, and III).

Our funding allocation remains true to the program’s original purpose, awarding nearly $7M to scalability projects. After this, security has been granted almost$2M, #buidl projects (projects that improve user experience) received $1.6M, and DevEx projects (projects that improve developer experience) received$744K. While dollar allocation remains heavily focused on scalability, the number of projects funded are more evenly distributed between categories.

Grants Process Update

The EF Grants program is constantly evolving. With this round, we’ve refined our internal processes to ensure timely fund disbursement. We understand how quickly the space moves and believe in the importance of expedient fund dispersal to the front line. Eventually, we aim to award grants on a rolling basis in order to provide more immediate support to the projects and teams leading the charge for decentralization and transparency.

Ideal applicants come with strong technical knowledge, project roadmap, and show a commitment to fostering collaboration within the ecosystem. For more information about applicant expectations and process workflow, please see our Applicant Expectations and FAQs.

Wave III

With each round, the grants program evolves. Our goal is to effectively grease the wheels for projects building the critical infrastructure of our young community. There are many tracks to lay down before Ethereum “makes it” and it’s been incredible to see all the projects working to lay down these tracks.

The applicant pool for Wave III offered a record number of strong teams and innovative ideas. It’s fascinating and humbling to see the diversity of projects from around the world with a shared interest in fostering the development of Ethereum. These are folks spending their free time reading ethresear.ch, developing new libraries and wallet designs, and engaging in communities discussing the latest in DApp usability and security…and we love them for that.

Without further ado…

We are proud to announce our Wave III Finalists!

Scalability

• StarkWare — $4M with 6K ETH Performance-based Bounties. Development of standards report and production-quality software for optimized STARK-friendly hash functions and tooling
• Force Move Game Framework — $300K. Force move games state channel framework
• Harmony — $90K. Minimal sharding and random beacon chain

Security

Usability

Developer experience (DevEx grant)

Building for the end user (#buidl grant)

• DappNode — $250K. Mass full node adoption
• Uniswap — $100k. DEX framework
• Nethermind — $50K. .NET client implementation
• thaEth — $20K. Gnosis Safe UI Design

Education

Hackternhips

Scalability will continue to be a focus of EF grants, but we also look to fund other critical work. This includes better UX, new clients, high-level languages, better developer tools, and efforts to make Ethereum applications more secure. With Wave III, we expanded into education and community efforts in order to help bring new talent into the ecosystem.

Want to #BUIDL with us?  See the dev wishlist below and follow links to learn more. If you can imagine a project relating to the topics listed, submit an application and talk to us!

Wishlist for the next grant round

Scalability

1. More payment and/or state channel implementations
2. More plasma implementations
3. More shasper implementations
4. Improving efficiency of existing clients such as geth & parity
5. A tokenless “Lightning Network” for Ethereum
6. WebAssembly R&D

Privacy

1. STARKS R&D
2. BLS12-381 implementations in new languages
3. libp2p Python implementation

Usability

1. Improve private key management and transacting in Ethereum
2. Alternative wallet / client designs
3. Standards and portability between wallets
4. Tooling that improves developer experience
5. Improved documentation & developer/user education videos
6. Tokenless end user products
7. Vyper development
8. More security focused high-level languages
9. Non-transferable ID tokens

Security

1. Security audits for Vyper
2. Smart contract audits
3. Particularly, audits for ERC20, ERC223, ERC721, multisig wallets, vaults
4. Tooling that prevents vulnerable code
5. IDE with a visual debugger
6. Privacy Solutions

Hackternships

You already have a job (or school)? No problem! Suggest a problem you want to solve and we’re happy to fund a 10-week $10K externship for your spare-time working on Ethereum. (Successful projects will be featured at a developer conference. We are also looking to hire and fund from this pool of side projects. If you’re looking for where to start, look at the list above.)

—  Wave I / — Wave II / — Wave III / — New to wishlist

For more inspiration…

• Read the original DevGrant post.
• Read the post that kicked off the current program.
• Find the grantees from Wave I and Wave II.
• Keep up to date with research here and here.

Bonus: Grant Ops Contest!

With the growing number of applicants, we’ll be needing to create an official website for the Grants Program. Do you have any ideas on how to make the website fun, transparent, and useful to future grant applicants? (mmhmm) Great! Because we will be running a contest and crowdsourcing ideas from all of you. Selected ideas will receive some unicorn love and some ETH. Stay tuned for details on how to participate!

1. Introduction

Ethereum Community,

Ethereum’s future is bright. Over the last 12 months the Ethereum community — a global collection of developers, entrepreneurs, researchers, and passionate users — has made tremendous progress. Every week, new applications built on Ethereum launch to mainnet, scalability solutions come online, and ETH 2.0 moves closer to key milestones. Ethereum remains the de-facto platform for decentralized applications, and is used every day to secure billions of dollars in digital assets.

The Ethereum Foundation’s team is thrilled to see the progress happening across the community. We have worked to support the ecosystem since Ethereum’s earliest days as a non-profit dedicated only to doing what is best for Ethereum.

As the ecosystem has matured, the Ethereum Foundation has refined its focus. “Doing what is best for Ethereum” doesn’t mean trying to do everything — it means focusing on where we can add the most value, and leaving space for others to add value in the areas that they will be the most effective.

So what is the Ethereum Foundation’s role today?

The Ethereum Foundation is a resource allocator, a voice in the ecosystem, and an advocate for Ethereum to the world.

Resource Allocator

Today, the Foundation holds approximately 0.6% of all ETH, as well as reserves held in cash. These resources are intended to decrease over time, as they are invested in critical work across the ecosystem. These are significant amounts of capital but they are not infinite. It is our responsibility to ensure that every last dollar and wei is spent effectively.

We are also working to grow the Ethereum ecosystem’s funding base. This means encouraging other organizations besides the Foundation to support high-priority projects, and supporting innovative mechanisms for funding, including Gitcoin grants and MolochDAO. Efforts like these give us better leverage from our existing resources, and help build a sustainable path for funding vital projects far into the future.

A voice in the ecosystem

We understand that many look to the Foundation as a valued voice even as we move to proactively empower others. That voice is a resource that can be used effectively to advance Ethereum. We are able to, for instance, bring attention to important but relatively unknown projects, share valuable information about Ethereum’s progress with the public, and encourage the growth of regional Ethereum communities.

Moving forward, expect the Ethereum Foundation to be a more active voice in the Ethereum community.

An advocate for Ethereum to the world

To the outside world, Ethereum can be confusing — and that’s probably an understatement. Many newcomers don’t understand our vibrant and decentralized ecosystem because they’ve never seen anything like it before.

When someone (a major company, a government or a regular person) finds their way into our world, the Ethereum Foundation is often their first stop. The first thing we tend explain is that the Ethereum ecosystem is distributed and not owned or operated by any foundation or organization. Our Foundation helps to represent Ethereum to the outside world as an effective portal that people can pass through to the ecosystem itself.

We also recognize a need to take more initiative in growing the Ethereum ecosystem, on-boarding developers and improving the developer experience. As discussed in more detail below, we intend to deploy significant resources towards these goals.

2. Our Philosophy

Ethereum is not a typical open-source project, and the Foundation is not a typical organization. Successfully fostering a vibrant decentralized Ethereum ecosystem requires a specialized approach.

Even as we deploy significant resources across the ecosystem to improve Ethereum, we must do so in a way that maintains the core spirit of decentralization. We have deliberately adopted a philosophy of subtraction, which informs everything that we do.

In plain language, following a philosophy of subtraction means resisting the natural tendency of organizations to grow and accumulate value within themselves, and ensure instead that this value is created outside the Foundation in the broader Ethereum ecosystem.

Instead of capturing opportunities for ourselves, we distribute those opportunities to the community. Instead of pulling everything in-house, we push our resources out to teams across the ecosystem. We don’t compete with the ecosystem — we are thrilled when other organizations create value, because that means Ethereum is becoming more decentralized and sustainable.

The Ethereum Foundation succeeds if Ethereum succeeds, and Ethereum succeeds with a strong decentralized community. That understanding governs how we work.

3. Highlights from Ethereum Foundation-supported teams

The last 12 months have been a crucial period for Ethereum, and we have worked extremely hard to support teams across the ecosystem. Encompassing all the progress made by teams supported by the EF in this letter is impossible, but here is a selected sample:

ETH 2.0 client teams

ETH 2.0 is a name given to a set of transformative upgrades for the Ethereum protocol. Last year, this effort moved from a research project to an engineering effort. Client teams supported by the Foundation including Nimbus, Prysm, Sigma Prime, and Substrate Shasper are among those working to turn ETH 2.0 into a reality.

Over the last few months the Nimbus, Prysm, and Sigma Prime’s Lighthouse testnets have launched. These teams and others are now stabilizing and optimizing their clients, getting ready for multi-client testnets.

Many resources are shifting into testing, fuzzing, and audits over the coming months. We engaged Runtime Verification to formally verify the deposit contract and to formally specify the Beacon Chain. This is in addition to considerable effort by the research, development, and security teams involved in ETH 2.0 toward reliability and security.

ETH 1.x

The ETH 1.x initiative, which started last year, focuses on improving Ethereum’s short term scalability and sustainability with an eye to easing the transition to ETH 2.0. Efforts we’ve funded include Alexey Akhunov’s research into stateless clients and state fees, and Andrew Ashikhmin’s research into sync protocol improvements.

Work continues on essential projects like Geth and Solidity as well, and regular updates from all supported teams are on the way.

ZK-rollup

ZK-rollup uses succinct zero-knowledge proofs to enable Ethereum to reach hundreds of transactions per second. We’ve supported Barry Whitehat and Matter Labs’ collaboration, which has led the way on research, development, and implementation.

ETHGlobal

ETHGlobal hosts Ethereum hackathons around the world, focused on on-boarding new developers into the ecosystem and facilitating project and company creation. At a recent event, ETHCapeTown, 70% of attendees were from South Africa and 40% of attendees were new to Ethereum.

Ethereum Academic and Research Collaboration

The Ethereum Foundation hosted three research workshops at Stanford and MIT, through which dozens of talented mathematicians, computer scientists, and economists were introduced to research problems originating in Ethereum. Many have continued working on these problems, leading to progress in areas essential to the future of Ethereum including Casper CBC, VDFs, Plasma constructions, succinct zero knowledge proof based systems, liveness, and safety bounds for Ethereum 2.0 among others.

Additionally, the Cryptophage collaboration between the Ethereum Foundation, Supranational, and Protocol Labs produced a solution to renowned cryptographer Ron Rivest’s LCS35 time capsule crypto-puzzle that required only two months, as opposed to the projected 35 years.

Working with prominent organizations to encourage their engagement with the Ethereum ecosystem

In our role as an advocate for Ethereum to the outside world, the Foundation has worked to encourage high profile organizations to engage with Ethereum in ways that strengthen the whole ecosystem.

Notably, we have been working closely with Microsoft in a long-term commitment to support the Ethereum developer experience through Visual Studio Code and the new Azure Blockchain Service.

We have also connected with large entities like HTC and Opera, encouraging them to engage with the Ethereum community and support Ethereum-based applications, and with non-corporate organizations like UNICEF to help find ways to use Ethereum for social good.

There’s a lot more being done by Foundation-supported teams than just the examples listed above. Stay tuned for more updates coming from these teams in the next few weeks.

4. Allocating Resources over the next 12 months.

An ecosystem-level view for Ethereum support

Today, we’re excited to share more information about the Foundation’s priorities for the next year, and how we expect to allocate resources across the ecosystem.

As we’ve learned and iterated, we’ve made necessary changes to our processes and priorities. When the Ethereum ecosystem was much smaller, it made sense for the Foundation to prioritize several “in-house” teams to work on the most fundamental projects. As the community grew, we began a Grants program that enabled us to support more teams throughout the ecosystem.

Today, it shouldn’t matter to the Foundation whether a project is “internal” or “external”. What matters is that we’re spending resources effectively, and that Ethereum’s goals are accomplished. This is why we are moving toward an “ecosystem level view” when allocating resources by looking at the whole picture rather than at a subset of it.

Over the next year, the Ethereum Foundation plans to spend $30 million USD on key projects across the ecosystem. This budget is insulated against downward ETH price movement.

We believe that this is a critical time for Ethereum, justifying significant investments in important work across the ecosystem.

Allocating across such a large and vibrant ecosystem is a substantial optimization challenge. We are constantly re-evaluating and optimizing our decisions, and new opportunities for leverage appear every day.

To help clarify how we define our highest priorities, we describe below three primary categories of resource allocation: (i) Building the Ethereum of tomorrow, (ii) Supporting the Ethereum of today, and (iii) Developer Growth & Awareness.

i. Building the Ethereum of tomorrow

$19 million earmarked over next 12 months

Ethereum remains a highly ambitious technical project, and significant resources are required to fund the R&D that will realize the Ethereum community’s ambitions. Critical work is underway across the ecosystem on active engineering projects like ETH 2.0, and on more long-term investments like growing the academic community’s involvement in Ethereum technology.

This includes:

• ETH 2.0: Client teams, Research, VDF, documentation and communication
• Layer 2: State channels & Plasma
• Continuing work on eWASM
• Smart contract languages
• Formal verification, auditing, and specification work
• Zero-knowledge R&D, including ZoKrates
• Ethereum “Phase 3 and Beyond” R&D
• Working directly with academic institutions and attracting exceptional research talent

ii. Supporting the Ethereum of today

$8 million earmarked over next 12 months.

Ethereum is used in production today to secure billions of dollars of assets and as a base layer for many hundreds of live applications. We believe that it is vital to continue supporting these efforts to ensure that “Ethereum 1.0” continues to be the world’s dominant smart-contract platform.

This includes:

• Many initiatives under the banner of “ETH 1.x”
• Geth
• Solidity
• Web3.js and Ethers.js

iii. Developer Growth & Awareness

$3 million earmarked over next 12 months

Developers, developers, developers.

Ethereum is a platform and the developers who build on it are a key part of our future. It is critical to invest in developer relations, education, and on-boarding today in order to grow the Ethereum community and to ensure our continued success. This is especially important in Asia, where significant opportunity exists for Ethereum to grow.

This figure also includes more traditional efforts to grow awareness of Ethereum, through marketing efforts at both technical audiences and at users of Ethereum-based applications.

This includes:

• Developer education & on-boarding
• Supporting community event organizations focused on developers, like ETHGlobal
• Continuing to run Devcon as a yearly gathering for the Ethereum ecosystem
• Supporting regional Ethereum community organizations
• Developer experience improvements and developer tooling
• Attracting exceptional developer talent
• Encouraging browsers and other mass consumer technologies to seamlessly integrate Ethereum into their user experiences
• Continued improvements to ethereum.org

5. Thank you!

Ethereum’s progress over the last 12 months is worth celebrating, and as we look ahead we’re more excited than ever before.

Everything we describe above, every technical improvement, event and initiative was accomplished by one of you. This may be a letter from the Ethereum Foundation, but it’s a letter about the Ethereum community. Whether you are new to all of this or you’ve been around since Genesis, thank you for all of your support and contributions. We are excited to keep building the Ethereum ecosystem together.

The Ethereum Foundation has paused new grant applications to its Ecosystem Support Program (ESP) as it reconsiders how it funds builders and projects.

The pause, announced Aug. 29, comes as the Foundation restructures its approach to ecosystem development and looks to align its grantmaking with longer-term priorities.

A detailed roadmap outlining new funding priorities is expected in the fourth quarter of 2025.

While the open grants channel is temporarily paused, ESP will continue supporting existing grantees and funding public goods. The team also pledged to maintain Office Hours, where builders can receive guidance, feedback, or connections to non-financial resources.

Why the Ethereum Foundation is pausing grants

The organization said Ethereum’s rapid growth in size and complexity has created pressure to adapt its funding model. Instead of continuing with a system that reacts to grant requests as they come in, the Foundation wants ESP to shift toward proactively backing projects that address strategic needs.

This transition will ensure resources are deployed where they can have the most lasting impact on Ethereum’s usability and resilience.

It added:

“This change will enable us time to redesign in a way that redirects our focus toward strategic initiatives, moving from a reactive model to a more proactive one that also supports the priorities of other EF teams.”

Meanwhile, the Foundation emphasized that its values remain unchanged. These include funding open-source infrastructure, research, and developer tools; supporting community initiatives; and strengthening resources that benefit the wider Ethereum network.

Since its creation in 2018, ESP has evolved from a simple grants program into a broader initiative providing financial and non-financial backing for Ethereum builders.

In 2024 alone, it distributed nearly $3 million across 105 projects, spanning developer tooling, data analytics, education, research, and community events.

Some of the past beneficiaries include Commit-Boost, BundleBear, Web3Bridge, ZK Playbook, and the Ethereum Cypherpunk Congress.

Mentioned in this article

Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Charles Hoskinson used his latest AMA to unleash his most forceful critique yet of the Cardano Foundation (CF), defending the decision to exclude the CF from claiming Midnight’s NIGHT tokens while outlining aggressive multi-chain partnerships, airdrop mechanics he says could be among the largest ever, and a near-term push around Token2049 and an Asia tour.

At the center was the Midnight redemption controversy. Asked “to address the decision to limit the CF from claiming NIGHT tokens,” Hoskinson framed the move as a necessary risk control rooted in the airdrop’s terms. “We built it. It’s my money. We can do whatever the hell we want to do,” he said, adding that the distribution included a disclaimer about “undue burden and harm to the network.”

Hoskinson Torches Cardano Foundation

He asserted ownership of the CF’s ADA is “not clear,” claiming “the Swiss government stole the ADA,” and warned that letting the CF redeem would introduce an adversarial governance bloc: “They’d come in and instantly be adversarial […] and assert that they have some sort of governance control. Let somebody else have that NIGHT who’s going to do something more with it.”

He escalated further later in the stream: “At what point does the community tell the CF to f*** off […] the free [stuff] they already squandered?” and, when pressed on why to blacklist the Foundation’s addresses, replied, “Why invite a bad actor […] into an ecosystem?”

He added to his rant: “I’m out there alone and it’s expensive, guys. Some of these deals with the big guys, they’ve become eight figure deals. […] It’s frustrating because all of our competitors have foundations that in some cases have endowments that are in the billions to tens of billions of dollars and they’re hungry and aggressive, and they’re doing stuff and they’re investing in stuff and they’re really pushing things forward.”

Hoskinson also insisted that the Midnight rollout materially benefits Cardano rather than siphoning attention from it, pointing to custody and exchange integrations set up to list both Midnight and Cardano-native assets. “We just announced today the Copper partnership[…] any exchange that uses Copper as a custodian […] can now support that asset. And […] they didn’t just agree to support Midnight. They agreed to support Cardano and Cardano native tokens,” he said, grouping Copper with relationships involving Bitcoin.com, Blockchain.com and Brave.

Hoskinson also said IOHK is working with Chainlink on a first-ever UTXO deployment: “We sat down with Sergey [Nazarov] […] They’re skeptical about the engineering cost […] [but] ‘I think we can figure it out.’”

The CF critique broadened into a sweeping governance and resourcing indictment. Hoskinson alleged the Foundation “is just not deploying capital in meaningful ways,” noting its absence from recent conferences: “When I was at Salt […] who wasn’t there? The CF. When we were at Rare Evo […] there was no CF booth.”

The Midnight Foundation Is Different

By contrast, he cast the Midnight Foundation as aggressively commercial—110 deals in the pipeline and “hungry” account management across ecosystems—and pointed to Intersect, Cardano’s members-based body, as the organ that now embodies his original foundation vision: “You already got a members-based organization […] It took two years to build it […] Now just add like $600 million […] and give them four extra years.”

He drew a direct line from CF governance to reputational damage: “Members of the organization are low-key soft accusing us of stealing money […] Were there any apologies? Was there any attempt for reconciliation?”

The animus with the CF bled into an evidentiary promise. Hoskinson said the audit report is in the final stages—“we’re so close to the release”—intended to “close out a 10-year history lesson from 2015 to 2025,” including “the original contracts with IO […] how much funds were raised […] the sale […] ADA vouching,” and audits tied to the Cardano Foundation.

Hoskinson framed it as “complete exoneration on our part,” and “very damning” for the CF’s “recusal […] of their responsibilities,” arguing that the Foundation’s decision to distance itself from Cardano’s origin story “created a lot of problems.” The purpose, he said, is “sunlight”: “You push it all out there […] and I think those conclusions will be very positive and favorable to Input Output.”

At press time, ADA traded at $0.8795.

Featured image created with DALL.E, chart from TradingView.com

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.

Wormhole Foundation (WF) entered the bidding competition for Stargate Finance, challenging LayerZero’s proposed $110 million acquisition.

In an Aug. 20 statement via X, WF argued that LayerZero’s offer significantly undervalues the cross-chain bridge protocol.

LayerZero Foundation announced its acquisition proposal on Aug. 10, offering to purchase all circulating STG tokens at $0.1675 per token through a swap for ZRO tokens. 

The proposal requires approval from STG holders through Stargate’s governance process, with a 70% approval threshold needed for passage.

Wormhole Foundation contended that LayerZero’s bid fails to reflect Stargate’s true value, citing the protocol’s treasury holdings and recent performance metrics.

Further, Wormhole shared that Stargate maintains over $92 million in treasury assets, including $76 million in stablecoins and $16 million in Ethereum, while demonstrating substantial growth momentum.

Performance drives valuation dispute

On-chain data shows that Stargate processed $4 billion in bridge volume during July 2025, representing a 10x year-over-year increase. As of Aug. 20, it had $348 million in total value locked (TVL) across more than 80 chains.

According to the Wormhole Foundation:

“STG holders deserve better. The current bid undervalues the protocol’s assets, brand, codebase, and team.” 

The WF added that these fundamentals justify a “meaningfully higher offer” than LayerZero’s proposed valuation.

LayerZero Foundation defends its pricing, noting Stargate’s backing of $0.14444 per circulating token compared to its trading price of $0.1637 per token at proposal time. It added that based on its calculations, the offer represents a premium on both metrics.

Differences beyond offers

LayerZero positions the acquisition as ecosystem consolidation, noting Stargate’s established infrastructure and user base. The foundation plans to direct all future Stargate excess revenue toward ZRO token buybacks while expanding the protocol’s mandate beyond traditional bridging services.

In addition, LayerZero argued that unified governance would eliminate resource conflicts between potentially competitive protocols.

At the same time, Wormhole Foundation proposed an alternative vision combining “Stargate’s unified liquidity pools with our broad ecosystem of integrations.” 

The foundation said this approach would generate “higher volumes, higher revenues, and greater stickiness,” benefiting both STG and W token holders. It also requested a five-business-day suspension of the ongoing on LayerZero’s proposal vote to allow time for due diligence and bid preparation. 

The governance vote requires a 1.2 million veSTG token quorum with 70% approval for LayerZero’s proposal to pass. The proposal was amended to provide additional compensation for veSTG stakers through six months of revenue distribution.

The amendment happened following criticism about the equal treatment of locked versus unlocked tokens.

Mentioned in this article