The price of the Across Protocol token skyrocketed after a management proposal proposed major structural changes for the project.
Conclusion
- Across the Protocol, the token rose 85%, as the offer offers the conversion of tokens into shares of the company.
- Holders can exchange ACX for stock in a new US C-corp or sell the tokens for USDC in a tender offer.
- The move is intended to help the protocol secure institutional partnerships and trade agreements.
ACX has seen a sharp increase in activity, trading around $0.063 at the time of writing. The token gained nearly 85% in the previous 24 hours, bringing its market capitalization to nearly $45 million.
Market share has also increased. The day’s trading volume reached almost $51.7 million, representing an increase of more than 3,000% compared to the previous day.
A similar trend appeared in the derivatives market. CoinGlass data shows that the volume of derivatives trading has increased significantly, increasing by 7,700% to 138 million dollars. Meanwhile, open interest jumped nearly 950% to $20 million, fueling a wave of new positions entering the market.
The surprise move follows a March 11 presentation to the Risk Management Forum by Risk Labs, the core development group responsible for Across Protocol.
The proposal explores the token-to-equity transition
The proposal, called “Bridge to the World,” asks the public if the protocol should transition from a token structure to a US corporation.
If approved, a newly formed entity, tentatively named AcrossCo, will take over development, partnerships and commercialization. The company also retains the intellectual property of the protocol.
The offer gives ACX holders two options. They can either exchange their tokens for shares in the newly formed company or sell their assets through a takeover offer.
For those who choose the capital route, the plan provides for a 1:1 conversion, which means that each ACX token will be exchanged for one share of the company. Holders with more than 5 million ACX can convert their tokens directly into equity. However, smaller holders are exposed through a special purpose vehicle designed to consolidate their participation.
Token holders who wish to leave can instead accept a purchase offer at $0.04375 per ACX, with payment made in USD Coin. This price represents about a 25% premium to the token’s average trading price over the past 30 days.
The purchase window will remain open for six months if the offer ultimately goes through. Funding for the proposal will come from the liquid fund of the protocol.
Institutional partners drive the proposal
According to this proposal, the transition to a traditional corporate structure is intended to solve the practical problems of independent decentralized organizations.
DAO-based governance can make it difficult to sign enforceable contracts, establish accountability frameworks, or negotiate certain types of business agreements. These limitations sometimes create obstacles when dealing with institutional partners.
Risk Labs said the change could make it easier for the project to secure partnerships and revenue agreements while continuing to build the protocol’s infrastructure.
The proposal is currently a temperature test, meaning it is designed to gather public feedback before any binding votes are held.
The schedule outlined in the document suggests that a governance vote could take place as early as April. If approved, the legal structure and infrastructure of the token conversion will start soon.
Across the Protocol has spent several years building cross-chain currency infrastructure, including fast transaction systems designed to transfer assets between blockchains in seconds.
