A Stellar Development Foundation subsidiary unit has finally purchased Chain, the San Francisco venture backed blockchain firm, after months of rumours of the startup being purchased.
The blockchain focused startup is the creator of the Sequence software. Rumours started hitting the media from about two months ago that Stellar Development Foundation was planning to buy the venture backed blockchain. There was not timeline given for the acquisition however.
The deal is an all-cash one, however the exact amount is still undisclosed – for now. The purchase also makes provision for all current Chain investors – Citi Ventures, Nasdaq, Visa – will all receive returns for their investments in the company. These details were given by co-founder of the Chain startup, Ludwin Adam. Mr. Ludwin will now be CEO of newly formed Interstellar shared the following with regards to the acquisition by Stellar
“All of the clients that we have now have effectively shifted from using a traditional database model to using a tokens model, issuing assets on a local environment…By partnering with Stellar you can fire an asset to another institution.”
Lightyear, the profit-oriented arm of Stellar Development Foundation is directly responsible for the purchase of Chain. Afterwards, both Lightyear are going to be dissolved for the emergence of some merger of sorts by name Interstellar (state earlier to be headed by Adam Ludwin as CEO). The new arm will begin work with a force of 60 workers with its HQ in San Francisco.
This acquisition is also proof that gradually the lines between public blockchain service providers as well as private ones and cryptocurrencies are gradually becoming blurry, as we see them beginning to back digital tokens.
Ludwin Adams also mentioned that the acquisition was well over $40 million, even though he wouldn’t mention the exact figure. He further explained that Chain was not obliged in anyway to sell the company – not for reasons of bankruptcy, as they
“… had millions in revenue and millions of dollars in the bank. Chain did not need to sell the company. This needed to be a great strategic move and a great return and it was both.”
More Technical Restructuring In The Stellar Management
Creator and co-founder of Stellar and Ripple respectively, Jed McCaleb, will be taking over as the chief technical officer (CTO) of the firm along with Adam Ludwin who will be CEO of Interstellar. Also founder of Mt Gox crypto exchange, Jed will still maintain his roles that will see him continue to help in the progression of the Stellar source codes.
The acquisition will now make Interstellar the blockchain service provider for all people who used the Core software by Chain. These customers include Cloudwalk and LPS, who will be moved to Interstellar’s service now.
Stellar’s StellarX which is to be introduced later in this year per plans will also be incorporated into the Interstellar group of products.
Chain offered a lot of cross-border payment solution services to companies including Visa who used “B2B”, and Nasdaq who used another cross-border solution provided by Chain.
Nonetheless, one of Chain’s major problems it faced was the inability to link all customers on one public network. Ludwin mentioned that they had plans of launching their own public network. However, after the launch of Lightyear in 2017 by Stellar, the startup found an avenue to partner with someone who had “equal and opposite problems” and also solve them with.
Jed McCaleb also shared some thoughts on the new developments
“Chain’s team has led the market for enterprise adoption of blockchain technology. Which is a critical component of building a future where money and digital assets move over open protocols.”
The price of Stellar sits at $0.2 and with a market cap of about $3.9 billion.
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