Count this as a sign that merger-and-acquisition activity in the crypto market is robust despite the slump in cryptocurrency prices.
Blockchain infrastructure firm Chain announced on Saturday the acquisition of Measurable Data Token (MDT). The $100 million deal will provide Chain — which offers developers cloud services to build blockchain-based applications — with a number of assets, including MDT, cash-back application RewardMe and financial data protocol MeFi.
The deal is unique inasmuch as it will involve a token conversion in which MDT will become Chain's native token XCN — an example of the sometimes idiosyncratic nature of transactions in the digital asset space.
The firm's internal M&A handled the deal, alongside advisers from Tanner De Witt and Rooney Nimmo.
"With this acquisition, there will be a sunset of the Measurable Data Token (MDT) which will be burned and swapped for XCN token," a blog post said. "MDT token holders will receive the benefit of the swap and will be expected to receive a $0.08 MDT token value for the swap."
To be sure, there is precedence for this type of deal, as now-beleaguered Voyager Digital's acquisition of LGO Markets resulted in a merge between the two firms' tokens.
Speaking to the process, Chain CEO Deepak Thapliyal said it was "complicated and requires a lot of counter-party assistance."
"We will need the assistance of exchanges to support the swap for tokens that are off-chain. For tokens on-chain, the process will be a lot less complicated and will be available through a simple smart contract since we are both primarily ERC20 tokens."
At last check, XCN was trading on Coinbase at $0.09 a coin.
Chain was founded in 2014 by Thapliyal, who is a well-known NFT collector and investor. Thapliyal purchased an Alien Punk for $23.5 million.
As for the M&A market, Galaxy Digital's lead investment banker told The Block that the market downturn may lead to more opportunities for deal-making.
"Overall, there is a lot more receptivity to the idea of M&A in this market environment," Galaxy's head of investment banking, Michael Ashe, said in an email to The Block.
Already, crypto lender Nexo has agree to acquire Singapore-based rival Vauld. Sam Bankman-Fried's firm FTX.US also announced its own plan to snap up BlockFi. Binance's Changpeng Zhao said in an interview with Yahoo Finance that the crypto exchange was looking at about 50 to 100 investment and acquisition deals.
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