Circle Acquires Interop Labs, So Why Did Axelar (AXL) Price Dip?

Stablecoin issuer Circle has acquired Interop Labs, the preliminary developer of the Axelar community.

This deal excludes the Axelar Network, Foundation, and AXL token, which can proceed to function independently. Common Prefix will take over improvement obligations.

Circle to Bring Interop Labs Team and Technology In-House

Circle, the corporate behind the second-largest stablecoin USDC, introduced that it has entered into an settlement to amass Interop Labs’ staff and proprietary expertise.

The stablecoin issuer plans to combine this staff to speed up progress on its Arc blockchain and Cross-Chain Transfer Protocol (CCTP). Circle mentioned it expects the acquisition to close in early 2026.

“Our purpose is to make blockchain connectivity seamless, and bringing the Interop Labs staff into Circle will speed up the Arc and CCTP roadmaps towards constructing the hub for multichain web finance,” Nikhil Chandhok, Chief Product and Technology Officer at Circle, stated.

Meanwhile, both Circle and Interop Labs emphasised that the deal doesn’t embrace the Axelar community.

“As the Interop Labs staff transitions to Circle, the Axelar Network, Foundation and the AXL token will proceed to function independently beneath group governance and open supply mental property will stay open supply,” Circle added.

Common Prefix, a long-time contributor to the Axelar Network, will now lead the community’s improvement. In a current X (previously Twitter) put up, the staff outlined its important priorities for 2026.

The 2026 focus areas embrace increasing Axelar by way of new protocols and asset courses, reallocating away from underperforming chains, introducing co-staking of blue-chip property to strengthen financial safety, getting ready the community for institutional use through improvements in privateness and compliance, and exploring gasless bridging to allow zero-fee transfers utilizing idle gateway capital.

“Common Prefix is a staff of scientists and engineers. Our scientists are post-docs, PhDs, and professors with sturdy tutorial backgrounds from famend universities worldwide. We are an unapologetically multichain staff, with deep experience in Ethereum, XRP Ledger, Sui, Solana, Cosmos, and Bitcoin (having co-invented BitVM). We imagine in a multichain world, the place totally different chains can be utilized for various functions. Axelar’s interoperability layer is an indispensable part that permits them to speak,” the staff stated.

Market Reaction and Community Concerns

The market reacted rapidly to the acquisition information. The AXL token’s worth plunged, extending its broader downtrend. At the time of writing, the altcoin traded at $0.11. This represented a decline of almost 13% over the previous day.

However, it’s price noting that the decline shouldn’t be remoted. Over the previous day, the broader cryptocurrency market has declined by nearly 4%, with main property akin to Bitcoin and Ethereum within the purple.

The transfer has additionally brought on concerns amongst some group members. Crypto commentator Nick described the deal as “very regarding” for AXL holders.

“Being an AXL holder/supporter myself, I can’t assist however to really feel utilized in a really predatory means right here. It seems like they utilized AXL as a monetization device with retail + VCs being the bread & butter to construct the platform. Then on the finish of the day promote the platform which is principally all the things of worth to Circle,” he noted.

Furthermore, one other analyst harassed that the scenario highlights what they described because the “token versus fairness downside” within the crypto trade.

“You funded the challenge. You took the chance. You don’t have any declare on the exit. Tokens aren’t shares. They by no means had been. ‘Remains unbiased and community-governed’ = the individuals who constructed it are leaving for greener pastures,” Steady Crypto posted.

The commentator additionally famous that though Common Prefix has stepped in because the community’s new lead developer, there is no such thing as a obligation for any staff to stay indefinitely.

“Until crypto solves this, each token is a wager that the staff sticks round – with zero contractual obligation that they are going to,” the analyst commented.

While the announcement has clearly shaken confidence amongst AXL holders, the challenge’s future now hinges on whether or not Common Prefix can efficiently execute its roadmap and rebuild belief in Axelar’s long-term worth proposition.

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