AXL Token Crashes! Circle’s Deal Sparks Crypto Chaos 🚀💥

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Key Highlights

  • AXL plummeted like a confused skydiver! 💸🔥
  • The Axelar Foundation was left out, causing a massive outcry! 🤯💥
  • Crypto gurus are scratching their heads, asking, “What’s going on?” 🤔💬

Axelar’s AXL token slid sharply on Tuesday after Circle confirmed it would acquire the core team and proprietary intellectual property of Interop Labs. The announcement sparked immediate pushback on X, where traders and developers questioned how the move would affect token holders, who are essentially the backbone of the project. 

Circle said the transaction excludes the Axelar Foundation and the AXL token, which will continue under community governance. Still, the sell-off and online reaction showed many investors remained skeptical, framing the deal as another flashpoint in crypto’s ongoing debate over incentives, ownership, and the gap between tokens and equity.

Circle’s Axelar-linked acquisition sparks backlash

Circle said the deal, expected to close in early 2026, covers only Interop Labs’ team and proprietary IP to accelerate development of its Cross-Chain Transfer Protocol (CCTP) and Arc blockchain. Axelar, the Foundation, and the AXL token will continue operating independently under community governance, with Common Prefix taking Interop Labs’ former responsibilities.

However, that clarification did little to calm investors. Many AXL holders argued that Interop Labs was effectively the protocol’s core builder, making the separation between “team” and “token” feel artificial. The backlash unfolded largely on X, intensifying within hours of the statement.

“Token vs equity” narrative takes over X

Chainlink advocate Zach Rynes, known as ChainLinkGod, described the situation as “yet another example of the token vs equity conflict of interest problem plaguing crypto.” He argued that token holders who funded development were left with nothing, while the team secured a successful exit.

Yet another example of the token vs equity conflict of interest problem plaguing crypto

Dev team behind a protocol get successfully acquired, tokenholders who funded that team get nothing

“continue to operate independently under community governance” = dev team rugging you for…

– Zach Rynes | CLG (@ChainLinkGod) December 15, 2025

Jacob Phillips, co-founder of Lombard Finance, echoed the sentiment, posting that Axelar’s “core team” being acquired made AXL “likely worthless,” noting that the token launched more than three years ago and the team was already fully vested.

Great 2025 trend: Tokens fighting for ownership

Big thing still missing: “Related Entities” clauses with Founding Teams – a tactic commonly used by VCs to ensure value cannot be diverted by teams working on other projects.

For Tokens/DAOs, the team is most of the value.

– Jacob Phillips (@JacobPPhillips) December 12, 2025

Phillips later expanded on the issue, pointing to the absence of “related entities” clauses common in venture capital deals, which are designed to prevent teams from diverting value elsewhere. In token-based systems, he argued, the team itself is often the primary source of value.

Impact on trading

AXL’s price action reflected rising unease among investors. The token is trading near $0.109, down 14% over the past 24 hours and roughly 20% from its weekly high. At the same time, 24-hour trading volume jumped above 40%, according to CoinMarketCap, pointing to panic-driven trading rather than organic demand. 

The episode has reignited a familiar argument in crypto: whether tokens can really capture value when the people building the protocol are free to cash out through equity deals that bypass token holders entirely.

For Axelar investors, the deal hit a nerve. Old doubts about governance and alignment resurfaced, with holders questioning what a token means when the core team exits through a corporate deal.

As the backlash continues to unfold on X, the AXL sell-off highlights a deeper industry dilemma: whether token-based ecosystems can preserve investor trust when teams are free to walk away through equity deals, leaving communities to carry the project forward.

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2025-12-16 20:54