Stablecoin issuer Circle has acquired Interop Labs, an early developer of the Axelar network.
Axelar Network, Foundation, and AXL tokens are not included in this transaction and will continue to be independently operated. Common Prefix will take over development responsibility.
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Circle, the company behind the second-largest stablecoin USDC, announced that it has signed an agreement to acquire the team at Interop Labs and its proprietary technology.
The stablecoin issuer plans to bring this team together to accelerate progress on the Arc blockchain and Cross-Chain Transfer Protocol (CCTP). Circle said it expects the acquisition to close in early 2026.
“Our goal is to make blockchain connectivity seamless, and having the Interop Labs team join Circle accelerates Arc and CCTP’s roadmap to building a multi-chain internet financial hub,” said Nikhil Chandhok, Chief Product and Technology Officer at Circle.
Meanwhile, both Circle and Interop Labs emphasized that the deal does not include the Axelar network.
“As the Interop Labs team transitions to Circle, the Axelar Network, Foundation, and AXL tokens will continue to operate independently under community governance, and open source intellectual property will remain open source,” Circle added.
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Common Prefix, a long-time contributor to the Axelar Network, will lead future development of the network. In a recent post on X (formerly Twitter), the team outlined its main priorities for 2026.
Focus areas for 2026 include expanding Axelar with new protocols and asset classes, reallocating away from underperforming chains, introducing co-staking of high-quality assets to enhance financial security, preparing the network for institutional use with improved privacy and compliance, and exploring gasless bridging to enable zero-fee transfers using idle funds in the gateway.
“Common Prefix is a team of scientists and engineers. Our scientists are postdocs, Ph.D.s, and professors with impressive academic backgrounds from prestigious universities around the world. We are an unapologetically multi-chain team with deep expertise in Ethereum, XRP Ledger, Sui, Solana, Cosmos, and Bitcoin (we co-invented BitVM). We believe in a multi-chain world where different chains can be used for different purposes.” Axelar’s interoperability layer is an essential component that enables communication,” the team said.
Market reaction and community concerns
The market reacted quickly to news of the acquisition. The price of AXL tokens plummeted, extending a broader downward trend. At the time of writing, the altcoin was trading at $0.11. This represents a drop of nearly 13% over the past day.
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However, it’s worth noting that the decline is not happening in isolation. Over the past day, the broader cryptocurrency market has Major assets, such as, decreased by nearly 4%. Bitcoin and Ethereum are in the red.
The move also raised concerns among some community members. Cryptocurrency commentator Nick said the transaction was “very concerning” for AXL holders.
“As an AXL holder/supporter myself, I can’t help but feel like they’re being used in a very predatory way here. It feels like they’re using AXL as a monetization tool to feed retailers and VCs to build platforms, and then at the end of the day, basically sell the platform for all it’s worth to Circle,” he noted.
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Furthermore, another analyst highlighted that the situation highlights what they described as the “token versus stock problem” in the crypto industry.
“You funded the project. You took the risk. You have no claim to exit. Tokens are not stocks. They never were. ‘Independent community continues to govern’ = those who built it leave for greener pastures,” Steady Crypto posted.
Commenters also noted that although Common Prefix has joined as the network’s new lead developer, no team is obligated to remain indefinitely.
“Until cryptocurrencies solve this problem, every token is an ongoing bet by the team with zero contractual obligations,” the analyst commented.
While this announcement clearly shook the confidence of AXL holders, the future of the project now depends on whether Common Prefix can successfully execute its roadmap and rebuild confidence in Axelar’s long-term value proposition.
