The native token of the LayerZero platform, ZRO, experienced a significant price surge of over 22% after the LayerZero Foundation announced a sizable token buyback. This strategic move involved the repurchase of 50 million ZRO tokens, which constitutes 5% of the total token supply, generating excitement among its investors and the broader crypto community.
On September 22, the LayerZero Foundation revealed in a post on X that the buyback had been successfully executed from early backers of the project. Following this announcement, the price of ZRO climbed sharply from approximately $1.82 to over $2.21 by September 24, illustrating strong market response and investor confidence in the direction of the project.
The LayerZero Foundation’s communication highlighted a previous investment commitment from a prominent venture capital firm, a16z crypto, which had acquired ZRO tokens valued at $55 million back in April. This particular investment came with a three-year lock-up period, further indicating the firm’s long-term belief in the token’s potential.
Moreover, LayerZero clarified that future token buybacks would be financed through the revenue generated by the cross-chain bridge project, Stargate. The buyback announced on Monday, however, was characterized as “discretionary” and separate from the ongoing program funded by Stargate’s earnings. This distinction underscores LayerZero’s commitment to managing its financial strategies effectively while enhancing token value.
Initially, LayerZero introduced the Stargate protocol in 2022, but it later operated as an independent entity. Recent developments revealed that LayerZero has successfully reacquired Stargate, following a vote in which the community approved the takeover bid. Despite the approval, the vote raised concerns as more than half of the supporting votes came from only two addresses with limited historical engagement in the Stargate DAO, reflecting potential governance issues within the community.
As a result of the reacquisition, LayerZero has committed to distributing half of Stargate’s revenue to stakers of the governance token, veSTG, for the first six months. The remainder will be allocated for ongoing ZRO buybacks, reinforcing the foundation’s strategy to stabilize and enhance the value of its native token.
This development echoes a broader trend in the cryptocurrency sector, where projects are implementing aggressive buyback programs to bolster token prices and investor interest. A recent example of this is pumpfun’s native token, PUMP, which has also achieved new price highs due to its dedicated buyback efforts.
Overall, the successful buyback initiative by the LayerZero Foundation is a strong indication of its proactive management and commitment to increasing the value of the ZRO token, revealing a promising path ahead for both investors and the platform itself.
