On Monday, Circle announced an agreement to acquire the teams at Interop Labs, who are none other than the original developers of Axelar (AXL). This announcement was poorly received by the community, and the AXL token plummeted.
Axelar’s AXL Plummets Following Circle’s Acquisition
Among the promising projects before the start of the bull run, Axelar (AXL) seemed well-positioned with its high-performance bridge operating notably between the blockchains of the Cosmos (ATOM) and Ethereum (ETH) ecosystems. However, after the AXL token hit an all-time high (ATH) of $2.64 on March 1, 2024, the disappointment is palpable, as it is now down 96%.
In fact, AXL is currently trading at less than $0.11, down 17.6% over the past 24 hours, further accentuating a downtrend that has been in place for nearly two years:
AXL price (weekly data)
As for the decline over the past 24 hours, it is far from insignificant, as it stems directly from Circle’s acquisition of Interop Labs, the team of developers behind the Axelar project. Under the terms of this agreement, the Axelar Network Foundation and the AXL token will retain their independence; however, excluded from this transaction, they are now left in the hands of the community and deprived of their founding team.
Consequently, the Interop Labs team will play a role in Circle’s projects related to its Arc blockchain:
Interop Labs actively contributes to the development of Axelar, one of the most advanced frameworks for secure cross-chain messaging and token transfers. The company is collaborating with a growing community of open-source contributors on the development of Axelar. By integrating Interop Labs’ expertise and technology directly into Circle, we aim to accelerate key initiatives for Arc, an open L1 blockchain designed to become the economic operating system of the Internet, and Circle’s CCTP [Cross-Chain Transfer Protocol, ed.].
As a result, the news was poorly received by the community, and some have even gone so far as to call the move a rug pull. On X, The Block co-founder Mike Dudas even claims that a Circle executive reportedly told an Interop Labs co-founder, “I don’t care about your investors,” although this alleged statement should be taken with a grain of salt:
Mike Dudas’ tweet
In any case, this raises certain questions regarding decentralization. Despite the superficial decentralization of many protocols, this announcement highlights these projects’ dependence on a centralized entity.
Furthermore, while very few altcoins stood out during the bull run, it’s a safe bet that similar buyouts will occur again, initiated by players who have already managed to come out on top, but which will bring a wave of centralization to the ecosystem.
