- Circle acquired Axelar developer Interop Labs on Monday.
- Investors in the crypto bridge's AXL token are unhappy.
- Slow adoption and profit-taking from early investors have weighed on Axelar in recent months.
Investors in Axelar are seething after stablecoin giant Circle announced it had bought the crypto bridge’s developer on Monday.
The reason? The deal acquires Interop Labs, Axelar’s leading developer, but excludes the network itself and the $120 million AXL token that powers it.
It comes as a major blow to investors, as many had thrown in their lot with Axelar, assuming that Interop Labs would stick around and continue developing the project.
Now they feel betrayed, and dozens have taken to social media to air their frustrations.
“Circle acquiring Axelar while explicitly excluding the foundation and the AXL token is outright criminal,” Simon Dedic, founder of crypto investment firm Moonrock Capital, said on X. “If not legally, then morally.”
Interop Labs and Circle did not immediately respond to requests for comment.
In the leadup to the acquisition announcement, Axelar’s AXL token rallied some 45%.
But when the deal details were released, and investors saw it didn’t include the token, it retraced all its gains.
The acquisition highlights the difficulties of aligning the interests of token holders who govern blockchain projects with those of the for-profit firms that create and develop them.
It’s not the first time such an issue has come up in recent weeks.
On December 12, Aave DAO members and Aave Labs, the for-profit firm that develops the popular lending protocol, began quarrelling after a DAO delegate claimed that a recent integration diverted potential revenue away from the DAO toward Aave Labs.
Standard behaviour?
Axelar is a decentralised crypto bridge that lets users send tokens and other information between separate blockchains.
The project was founded in 2020 and has received almost $94 million in venture funding, including $50 million raised through an initial coin offering in 2022.
Not everyone views Circle’s acquisition of Interop Labs so critically, however.
“This is standard behaviour,” Avichal Garg, co-founder of early-stage venture firm Electric Capital, said on X. “No company wants to pay investors if all value is created going forward by the team It’s up to the CEO/founder to fight for investors.”
Electric Capital participated in a strategic $30 million token sale by the Axelar Foundation in March 2025.
Axelar is not listed among Electric Capital’s investments on its website, however.
To be sure, Axelar was floundering even before Circle acquired its developer.
Axelar was once seen as one of the most promising crypto bridging protocols, hitting an all-time high market value of almost $1.4 billion in March 2024.
Yet slow adoption, profit-taking from early investors, and a lack of value accrual have all weighed heavily on the protocol.
Over the past year and a half, the AXL token has plummeted by some 95%.
It currently trades just above its all-time low.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
