Circle's acquisition of Interop Labs triggers market sell-off, Axelar token AXL drops over 10% in a single day

After stablecoin giant Circle announced the acquisition of Interop Labs, the Axelar ecosystem native token AXL quickly came under downward pressure. Data shows that following the announcement, AXL dropped approximately 13% to 15% on Tuesday, becoming a focal point of market attention. While this deal validated the value of Axelar’s interoperability technology, explicitly excluding AXL tokens and the Axelar network itself from the acquisition scope has led to a noticeable cooling of investor sentiment.

Interop Labs is the original core development team of the Axelar network, responsible for the design and implementation of cross-chain communication protocols. According to the announcement, Circle will incorporate Interop Labs’ engineering team and its proprietary intellectual property to strengthen its capabilities in blockchain interoperability, stablecoin infrastructure, and payment networks. Meanwhile, ongoing maintenance and development of the Axelar ecosystem will be primarily handled by another long-term contributor, Common Prefix.

As a blockchain network focused on cross-chain communication and asset transfer, Axelar’s underlying technology is recognized within the industry. However, the market generally believes that this acquisition does not bring any direct economic benefits to AXL token holders. AXL does not participate in transaction revenue sharing, does not receive additional purchase demand, and lacks governance or control over the acquired assets, which is the core reason for the token’s sell-off.

The swift response from traders reflects an increasingly clear trend: in crypto industry mergers and acquisitions, potential buyers tend to value engineering talent, intellectual property, and infrastructure aimed at enterprise applications more than native tokens in open networks. In this case, Circle gains interoperability technology and engineering capabilities to expand the stablecoin and payments ecosystem, while the AXL token has almost no structural connection to this commercial integration.

This event once again challenges the traditional narrative that “protocol success necessarily drives token prices higher.” As crypto M&A activities mature, if tokens are not incorporated into the transaction design or value capture mechanisms, their prices may instead become passively pressured due to increased uncertainty. (CoinDesk)