Why Did circle-acquiring-interop-labs-team-while-axelar-stays-independent">Axelar Token Drop 15% After Circle Acquired Its Developer Team?
Axelar’s core developer team was acquired by Circle, the issuer of the USDC stablecoin, a move that immediately affected the Axelar (AXL) token price, which fell about 15% within 24 hours. This development raises important questions about the future governance, development continuity, and decentralization of the Axelar network amid the growing involvement of centralized entities in blockchain infrastructure.
What happened
In December 2025, Circle announced it had acquired Axelar’s core developer team, the group responsible for maintaining and developing the Axelar protocol. This acquisition effectively transferred the technical stewardship of Axelar’s cross-chain communication technology under Circle’s control. According to Circle’s official press release, the deal is part of the company’s strategy to enhance interoperability and expand its ecosystem by leveraging Axelar’s technology.
Following the announcement, the Axelar token (AXL) experienced a price decline of approximately 15% within 24 hours, accompanied by a notable increase in trading volume as confirmed by independent market data from CoinGecko and CoinMarketCap. Industry analysts from The Block and Messari interpreted this price movement as reflecting investor concerns about potential risks to Axelar’s decentralization and independent development, given that the core developer team now operates within a centralized entity.
Despite the transfer of the developer team, Axelar’s governance structure remains formally intact. Token holders retain voting rights per the latest governance documentation updated in December 2025. However, the original developer team is no longer under Axelar Labs’ control, introducing a separation between governance and development operations.
Why this matters
The acquisition highlights a critical tension in the blockchain ecosystem: the balance between decentralization ideals and the practical realities of sustaining complex protocol development. Axelar, as a cross-chain infrastructure provider, relies heavily on trust and neutrality to maintain its role in connecting disparate blockchain networks. The shift of its core developer team to a centralized company like Circle may undermine perceptions of neutrality and independence, which are key to maintaining user and investor confidence.
Investor apprehension, as reflected in the token’s price decline and analyst commentary, centers on the potential for reduced decentralization. The governance process, while formally retained by token holders, faces an uncertain future without the original developers driving protocol updates. This structural change raises questions about effective oversight and the future direction of the protocol’s development.
On the other hand, Circle’s acquisition could bring increased resources, stability, and integration opportunities for Axelar’s technology, potentially enhancing its long-term utility and ecosystem reach. This duality exemplifies a broader industry trend where centralized entities acquire critical blockchain infrastructure teams, blurring the lines between decentralized networks and centralized control.
What remains unclear
Several important aspects of the acquisition remain undisclosed or insufficiently detailed in public sources. First, the specific terms of the acquisition, including governance rights, intellectual property ownership, and the scope of Circle’s responsibilities for Axelar’s protocol development and maintenance, have not been made public. This opacity limits the ability to assess the long-term impact on Axelar’s decentralization and operational independence.
Additionally, it is unclear how Axelar’s governance mechanisms will adapt to the absence of the original developer team and whether token holders will have meaningful influence over future protocol upgrades. The community’s perception of this transition and its effects on developer and user adoption have not been documented.
Furthermore, there is no available data yet on changes in network activity, validator participation, or decentralization metrics following the acquisition. Potential regulatory or compliance implications of the deal have also not been addressed.
What to watch next
- Clarifications from Axelar and Circle on governance arrangements and how protocol development responsibilities will be managed post-acquisition.
- Updates on any formal agreements or frameworks that ensure Circle’s commitment to maintaining Axelar’s decentralized ethos and network integrity.
- Community feedback and sentiment regarding the developer team’s transfer, including any shifts in developer or user engagement metrics.
- Data on Axelar’s network performance, validator activity, and decentralization indicators in the weeks and months following the acquisition.
- Potential regulatory disclosures or compliance statements related to Circle’s expanded role in blockchain infrastructure development.
The acquisition of Axelar’s core developer team by Circle marks a significant moment in the evolving relationship between decentralized protocols and centralized entities. While it may bring new resources and integration opportunities, it also raises unresolved questions about governance, decentralization, and the future utility of the AXL token. The coming months will be critical in determining how this balance plays out and what it means for investor confidence and the broader blockchain ecosystem.
Source: https://www.coindesk.com/markets/2025/12/16/axelar-token-falls-15-after-circle-deal-takes-the-developer-team-leaves-axl-behind. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.