Acquisition Details
Circle, the issuer of the USDC stablecoin, has announced its agreement to acquire Interop Labs, the development company behind the Axelar Network. The deal includes Interop Labs' proprietary intellectual property and is intended to boost Circle's cross-chain interoperability efforts using its Arc L1 blockchain.
According to Circle, the acquisition aims to achieve native asset interoperability, expand developer tools and SDKs for multichain applications, and accelerate first-party app development. Nikhil Chandhok, Circle's Chief Product and Technology Officer, stated: “Our goal is to make blockchain connectivity seamless, and bringing the Interop Labs team into Circle will accelerate the Arc and CCTP roadmaps toward building the hub for multichain internet finance.”
Network Excluded
A key clarification in the announcement is that the deal “solely concerns the Interop Labs team and their proprietary intellectual property,” leaving the Axelar network and its native token AXL entirely outside the transaction. Interop Labs' remaining operations will be taken over by Common Prefix, another Axelar project contributor.
Community Backlash
The news triggered a wave of criticism on social media. Mike Dudas, co-founder of The Block, called out the pattern of “screwing over non-CEO & key employee stakeholders” in Circle’s acquisitions. Zach Rynes, Chainlink Community Liaison, described this as another example of the “token vs equity conflict of interest,” adding: “Dev team behind a protocol get successfully acquired, tokenholders who funded that team get nothing.”
Rynes further argued that this is “the #1 issue our industry needs to solve if we want to attract serious capital.” The debate reflects a growing concern: token holders who financially supported the protocol's development are left out when the development team exits through an acquisition. This structural misalignment could deter future investment in token-based projects.
Looking Ahead
Circle's move underscores the inherent risks in projects where equity ownership is separated from token ownership. While Circle assures the Axelar network remains independent, the uncertainty around AXL's value proposition has increased. As more acquisitions of this nature occur, the crypto industry will need to innovate on governance and tokenomics to ensure fair treatment of all stakeholders.