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Stellar (XLM) Purchasing Chain with $500M Worth of Lumen

Jun 27, 2018, 7:59AM
1 min, 30 sec READ

Financial platformer Stellar is closing on a $500 million acquisition of San Francisco-based startup Chain to be paid via XLM's Lumen.

Financial platformer Stellar is in the late stages of discussion to purchase the San Francisco start-up, Chain. Reports of the potential transaction have a price tag set at $500 million, to be paid with Stellar's Lumen (XLM). Valuations seem to be on the up-and-up for Chain after raising more than $43 million via venture funding. Backed by investors like Khosla Ventures, Visa, Nasdaq, and Citi Ventures, Chain's cryptographic ledger systems offer versatile utility.

It remains unclear how Chain will be integrated into Stellar's current system. Stellar is a financial platformer seeking to bridge the gap between banks, customers, and the various payment systems required. Upselling their goal of minimal fees, quick turnaround, and security, the firm has seen various success with their token value. Once trading at $.88, the Lumen now hovers around $.20. 

The pairing makes sense - Stellar has the money, and Chain has the engineering talent. One source familiar with the deal said it is likely in response to the heated battle for top developers between crypto companies. / Polina Marinova, Fortune

Stellar may have the means, but this price means there is a lot more intent than simply acquiring talent. Minimizing a $500 million acquisition (about 14% of Stellar's market cap) to simply further a financial platform would arguably be a waste of new assets. Increasing variable utility has become a necessity for most blockchains in the market. It is becoming more likely that Stellar is looking to Chain as a new avenue for success rather than a simple tool for furthering their own platform.  The platform lost its partnership with messaging app Kik in May, and this is the most notable effort for development since. 


Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.