A San Francisco-based blockchain startup called Chain is making headlines in the crypto world. Fortune reports that cryptocurrency company Stellar is in talks to acquire the firm. According to the publication, the entirety of the $500 million acquisition deal will be paid in Stellar Lumens (XLM) coins.
What is Chain?
The startup’s product “Sequence” is designed to be a “ledger-as-a-service.” The company describes itself as creators of “cryptographic ledgers that underpin breakthrough financial products and services.” It raised $40 million in VC funding from Khosla Ventures, Pantera Capital, Blockchain Capital, Nasdaq, RRE Ventures, BoxGroup, Visa, Citi Ventures, Haystack and Thrive Capital.
Visa has, previously, deployed the Chain Protocol and Chain Core Blockchain platform in their Visa B2B Connect, which helps high-value transactions from corporate clients occur smoothly while connecting to partner banks. All parties involved in the transactions are connected to a private blockchain for real-time payments.
Stellar Ready for a Change
Ripple co-founder Jed McCaleb created Stellar. Its currency, Lumens, is currently the seventh most valuable crypto in the world with over $4 billion in market capitalization. The company’s blockchain is presently being used by IBM to transfer payments between South Pacific countries and messaging startup Kik.
Earlier this week, the currency was approved by the New York DFS to trade on the itBit exchange in the state. It also received funding from payments firm Stripe.
Stellar and Chain were, reportedly, involved in a fierce battle to hire top developers. A source shared Stellar, which is the larger firm with deep pockets, found it easier to acquire Chain and bring its engineering talent onboard. It is likely that Chain CEO Adam Ludwin will remain a part of the company.
Chain’s role in Stellar and its incorporation into the company’s product is still unclear. None of the companies have made official announcements or comments about the deal.