Axelar’s AXL token dropped by as much as 13% on Tuesday, based on CoinDesk market data, following Circle’s announcement that it had reached an agreement to acquire the team and proprietary IP of Interop Labs, the primary developer of the Axelar Network.
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The acquisition specifically does not include the AXL token and the network itself.
Engineers and intellectual property from Interop Labs will merge with Circle, while Common Prefix, a long-standing collaborator, is poised to take on a more significant role in maintaining and developing the Axelar ecosystem.
Axelar serves as a crypto network intended to facilitate communication and asset transfers among various blockchains.
The market swiftly reacted as traders began selling AXL when it became apparent that the acquisition would not directly benefit tokenholders, despite affirming the underlying interoperability technology.
This move indicates that potential buyers may be more interested in teams, IP, and enterprise-oriented infrastructure than in the tokens linked to open networks.
For Axelar, Circle gains engineering talent and interoperability know-how that can bolster its broader stablecoin and payments strategy, while AXL holders find themselves disconnected from the economic aspects of the transaction.
The token is not subject to any buying pressure, revenue sharing, or governance rights concerning the acquired assets.
This situation challenges the belief that protocol success will inherently enhance token values, highlighting that M&A activity in crypto could strengthen infrastructure and teams, but if a token isn’t structurally included in the deal, it may easily become collateral damage.
