Circle, the issuer of USDC, is preparing to acquire Interop Labs, the company behind the development of Axelar Network.
The company recently announced that it had agreed to acquire Interop Labs and its proprietary Intellectual property, intending to advance its cross-chain interoperability using Arc, its L1 blockchain.
Circle stated that this acquisition seeks to achieve native asset interoperability, expand the developer experience and SDKs for multichain apps, and boost its first-party app development.
Nikhil Chandhok, Chief Product and Technology Officer at Circle, 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.
Nonetheless, Circle clarified that this deal “solely concerns the Interop Labs team and their proprietary intellectual property,” leaving Axelar and its network out of this deal.
Read more: Bybit and Circle Partner to Expand Global USDC Adoption
Even as Interop Labs will be taken by Common Prefix, another Axelar project contributor, this raised concerns about this trend in the cryptocurrency ecosystem and the effect that such deals have on the involved token projects.
Mike Dudas, co-founder of The Block, criticized the move, highlighting that it continues “the pattern of screwing over non-CEO & key employee stakeholders in your [Circle’s] acquisitions.”
Zach Rynes, Community Liaison at Chainlink, also stressed that this was yet another example of the “token vs equity conflict of interest” affecting the ecosystem.
“Dev team behind a protocol get successfully acquired, tokenholders who funded that team get nothing,” he declared.
The debate between token holders and companies supporting their underlying blockchains will continue to rage on as more acquisitions like this one happen, affecting investment in these projects. Rynes qualified this issue as “the #1 issue our industry needs to solve if we want to attract serious capital.”
- What is the aim of Circle’s acquisition of Interop Labs?
Circle intends to use this acquisition to enhance cross-chain interoperability and improve the developer experience for multichain applications. - How will this acquisition affect Axelar Network?
Circle clarified that the deal focuses solely on the Interop Labs team and their intellectual property, excluding Axelar and its network from the acquisition. - What concerns have been raised regarding this acquisition?
Critics, like Mike Dudas, highlight that this deal reflects a troubling trend in which key employees benefit while token holders remain unprotected. - What ongoing issues does this acquisition highlight in the crypto ecosystem?
The situation underscores the persistent conflict of interest between token holders and companies, which needs resolution to attract serious investment in the industry.
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