On Monday, Circle unveiled an agreement to acquire the teams at Interop Labs, which are none other than the original developers of Axelar (AXL). This announcement was poorly received by the community, and the AXL token collapsed.
Axelar’s AXL collapses after Circle acquisition
Among the promising projects before the start of the bull run, Axelar (AXL) seemed to be in a good position with its high-performance bridge operating between the Cosmos (ATOM) and Ethereum (ETH) ecosystems. However, after the AXL token reached an all-time high (ATH) of $2.64 on March 1, 2024, disillusionment is now widespread, as it is currently down 96%.
In fact, AXL is currently trading at less than $0.11, down 17.6% over the last 24 hours, accentuating a trend that has already been bearish for nearly two years:
As for the decline over the last 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 the agreement, the Axelar Network Foundation and the AXL token will retain their independence, but, excluded from this transaction, they will find themselves in the hands of the community and deprived of their founding team. From now on, the Interop Labs team will play a role in Circle’s plans for 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 to develop Axelar. By integrating Interop Labs’ expertise and technology directly into Circle, we hope to accelerate key initiatives for Arc, an open L1 blockchain designed to become the economic operating system of the internet, and Circle CCTP [Cross-Chain Transfer Protocol, ed.].
As a result, the news was poorly received by the community, with some even going so far as to describe the operation as a rug pull. On X, The Block co-founder Mike Dudas even claims that a Circle executive told an Interop Labs co-founder, “I don’t care about your investors,” although this alleged statement should be treated with caution:
In any case, this raises certain questions about decentralization. Despite the superficial decentralization of many protocols, this announcement shows the dependence of these projects on a centralized entity.
Furthermore, while very few altcoins stood out during the bull run, it’s a safe bet that similar buybacks will occur again, initiated by players who have already managed to come out on top, but bringing a wave of centralization to the ecosystem.
