ZRO's temporary reversal and Stargate's profit-driven buyback analysis

Execution Summary

Based on multi-source data verification, ZRO (LayerZero token) experienced a significant price reversal from late January to early February 2026: rising from $1.71 on January 20th to a high of $2.28 on January 24th (+33.3%), then retracing to a low of $1.48 on February 6th (-35.1%), before rebounding to $1.84 on February 10th (+24.3%). This reversal is related to the mechanism by which LayerZero's protocol revenue is used for ZRO buybacks after its acquisition of Stargate, but the actual driving force was mainly the announcement effect and institutional buying. Stargate's current TVL is only $9.8 million, with an average monthly revenue of about $800,000, a relatively small revenue scale, insufficient to independently drive the price rebound. The acquisition terms clearly state that 100% of Stargate's revenue will be used for ZRO buybacks after the end of February 2026, but its current contribution is low to medium, and the subsequent impact of the announcement on February 10th needs to be monitored.

Price trend analysis CoinGecko

ZRO exhibited a typical "surge-pullback-rebound" pattern between January 20th and February 10th, 2026, with the following key points:

Key price dynamics :

• The upward phase (January 20-24) : The cumulative increase was 33.3%, which may be related to the market's optimistic expectations for the LayerZero ecosystem, but there was no direct event driving it.
• Correction Phase (January 25 - February 6) : Dragged down by overall market sentiment (Bitcoin fell from $86,000 to $60,000 during the same period), ZRO experienced a maximum drawdown of 35.1%.
• Rebound Phase (February 7-10) : A 24.3% rebound from the low of $1.48, coinciding with discussions about Stargate's buyback mechanism and institutional activity.

Stargate's Acquisition and Buyback Mechanism Verification

LayerZero officially acquired Stargate in August 2025. Key details are as follows:

Acquisition Terms LayerZero Foundation :

• Acquisition price : US$110 million, STG holders will receive the exchange at a ratio of 1 STG : 0.08634 ZRO (based on a ZRO price of US$1.94).
• DAO Approval : 94% of the vote passed, dissolving Stargate DAO, with the LayerZero Foundation taking over operations.
• Revenue distribution : For the first 6 months (until the end of February 2026), 50% of Stargate revenue will be distributed to the original veSTG holders, and 50% will be used for ZRO buyback; from March 2026 onwards, 100% of revenue will be used for ZRO buyback.

Buyback of enforcement evidence LayerZero Blog :

• September-November 2025: Stargate's total revenue was $2.4 million, of which $1.2 million was used to purchase ZRO on the open market.
• First buyback: LinkedIn announced that it has executed a $1.2 million buyback during the post-acquisition phase.
• Tracking page: The LayerZero Foundation provides a public tracker of buyback data ( zro-buybacks ).

Stargate Agreement Data and Earning Capacity Assessment

Current Stargate protocol data reveals limited revenue, offering weak substantive support for buybacks.

TVL and on-chain distributed DefiLlama :

• Total TVL : $9.8 million (as of February 10, 2026), a significant decrease from the historical peak.
• Chain distribution : mainly concentrated in VeChain ($9.8 million), with other chains contributing negligible amounts.
• Industry ranking : TVL is low in cross-bridge agreements, reflecting competitive pressure and liquidity outflow.

Cost Structure and Revenue Estimation : Dune Analytics

• Fee Mechanism :
  • LP Fee: 0.045% of the transaction amount (attributable to liquidity providers)
  • Agreement fee: 0.015% of the transaction amount (to be paid to the Stargate Treasury)
  • Rebalancing Costs: Dynamically Adjusted (Based on Liquidity Equilibrium)
• Revenue projection : Based on historical data (an average of $800,000 per month from September to November), revenue in January and February 2026 may remain at a similar level, but specific data is missing (the Dune dashboard has not been updated with accurate figures for 2026).
• Buyback potential : The average monthly revenue of $800,000 means that the monthly buyback amount will be approximately $800,000 after March 2026, which has a limited impact relative to ZRO's circulating market value of $180 million (estimated) (monthly buyback volume accounts for 0.44%).

Driver Analysis: Announcement Effect vs. Actual Revenue

Twitter discussions and news-driven announcements were the primary drivers, rather than Stargate revenue itself.

Social Media Sentiment X :

• Key KOL opinions : @rookie_of_Ph and others emphasized that "acquiring Stargate will tie growth to ZRO", "a16z and the foundation bought ZRO", and "the announcement of the new New York office" (an event on February 10), which boosted market expectations.
• Narrative consistency : All discussions focus on LayerZero ecosystem integration, but no specific figures or immediate impact on Stargate revenue are mentioned.

Organizational Activities :

• a16z's additional $55 million investment (mentioned on Twitter) could directly contribute to buying activity.
• As a long-term narrative, the buyback mechanism means that short-term price rebounds are more driven by events (such as the announcement on February 10).

Driving force assessment :

• High impact : Institutional buying (a16z), ecosystem integration announcement, market sentiment recovery.
• Low to medium impact : Stargate buyback (current revenue is small, buyback amount is only $1.2 million cumulatively).
• Data limitations : Stargate revenue data for January-February 2026 is missing, making it impossible to accurately quantify the buyback contribution; low TVL suggests low protocol usage.

Risk Warnings and Outlook

Short-term risks :

• TVL slump : Stargate's TVL is only $9.8 million, with limited revenue capacity, and the direct impact of a buyback on ZRO prices is minimal.
• Market Dependence : ZRO prices remain highly dependent on the overall market trend (a rebound in Bitcoin to above $60,000 is key).
• Announcement fulfilled : The announcement on February 10 needs verification to confirm whether it mentioned Stargate's revenue growth or the 100M ARR target (unconfirmed).

Long-term outlook :

• Starting in March 2026, a 100% revenue buyback mechanism will be launched. If Stargate's revenue increases (such as achieving the $100 million ARR target), the buyback may become a continuous support.
• LayerZero's ecosystem expansion (integration of 160+ chains) may drive Stargate's usage, but actual adoption needs to be observed.

in conclusion

ZRO's temporary reversal (a rebound from $1.48 to $1.84) was primarily driven by the LayerZero ecosystem integration announcement and institutional buying. Stargate's revenue buyback mechanism provided narrative support but its actual contribution was low to medium. Currently, Stargate's protocol revenue (approximately $800,000 per month) and TVL ($9.8 million) are relatively small, so the buyback funds have a limited impact relative to ZRO's market capitalization. Investors should pay attention to revenue data changes after the 100% buyback mechanism is activated at the end of February 2026, and whether LayerZero achieves Stargate's revenue growth targets. Short-term price fluctuations remain primarily event-driven; therefore, a careful assessment of the actual weight of the buyback narrative is recommended.

Key monitoring points :

• Stargate Q1 2026 Revenue Report (End of March)
• LayerZero's February 10th announcement details
• The impact of Bitcoin's overall market trend on ZRO beta