Coin Circle (120BTc.coM): The synthetic asset platform Synthetix originally planned to acquire the crypto options platform Derive for approximately $27 million, but this deal was announced to be terminated shortly after the proposal was made due to strong opposition from both parties' communities, particularly the Derive token holders. This has also brought attention to the merger process between the two decentralized projects and community communication.
The Beginning and End of the Failed Trade
Synthetix is a well-known decentralized financial infrastructure provider, while Derive, formerly known as Lyra, is a crypto options platform independently operated by Synthetix after its incubation in 2021. According to the original proposal, Synthetix plans to acquire Derive through a token swap, with a proposed exchange ratio of 1 SNX token for 27 DRV tokens, with a total transaction value of approximately $27 million.
However, this acquisition needs to obtain voting approval from the communities of both Synthetix and Derive. Ultimately, as confirmed by a Synthetix spokesperson on May 22, both parties agreed to "abandon the proposed acquisition," as the proposal "did not resonate."
Ben Celermajer, Head of Strategy at Synthetix, noted that the community's main concerns include a three-month token lock-up period and trading price. He admits that the community's "response has not been as expected" and therefore "has no intention of moving forward with an effort that was supposed to be collaborative and constructive". Previously, Synthetix had tried to address some of the concerns, such as removing the lock-up limit for users holding less than 1 million DRV tokens, but apparently failed to quell the opposition.
Core Concerns of the Derive Community
The key to the deal's breakthrough was the strong questioning of the terms of the deal by members of the Derive community. Many members believe that the token swap ratio does not fairly reflect the true value of the Derive platform. Derive user "Ramjo" bluntly said that this exchange rate is equivalent to "selling at a low point and locking in a low price". Another user, Alvaro HK, found the deal "difficult to justify" and pointed out that Derive generated more revenue than Synthetix.
"I found that Synthetix plans to issue an additional 170 million SNX coins, increasing the supply from 330 million to 500 million, which will further dilute the value of the Derive quote by 60%," Alvaro HK added, "Why was this information not disclosed when asked?"
Alvaro HK further questions that the agreement lacks provisions to prevent Synthetix from "issuing millions of new tokens to continuously dilute our rights" in the future. The old Derive believes that the merger will lead to a loss of rights, and these concerns together constitute the main driving force behind the failure of the transaction.
The Influence of Decentralized Governance
The failure of Synthetix's acquisition of Derive is a vivid illustration of the decisive power of community voices in the decentralized autonomous organization (DAO) model. While Synthetix's strategic goal is to expand its product portfolio by vertically integrating Derive's technology and products, and to compete with major derivatives platforms such as Hyperliquid, Binance, dYdX, and Deribit, decisions that lack broad community support ultimately make it difficult to implement. This case contrasts with Synthetix's previous successful acquisitions of Kwenta and TLX, and highlights the particular community headwinds faced by the Derive case. This proves once again that in a decentralized platform, even if there is a clear strategic intent, it must pass the test of community consensus first.
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Synthetix's $27 million acquisition of the Crypto Assets Options platform Derive failed! The reason was a lack of resonance?
Coin Circle (120BTc.coM): The synthetic asset platform Synthetix originally planned to acquire the crypto options platform Derive for approximately $27 million, but this deal was announced to be terminated shortly after the proposal was made due to strong opposition from both parties' communities, particularly the Derive token holders. This has also brought attention to the merger process between the two decentralized projects and community communication.
The Beginning and End of the Failed Trade
Synthetix is a well-known decentralized financial infrastructure provider, while Derive, formerly known as Lyra, is a crypto options platform independently operated by Synthetix after its incubation in 2021. According to the original proposal, Synthetix plans to acquire Derive through a token swap, with a proposed exchange ratio of 1 SNX token for 27 DRV tokens, with a total transaction value of approximately $27 million.
However, this acquisition needs to obtain voting approval from the communities of both Synthetix and Derive. Ultimately, as confirmed by a Synthetix spokesperson on May 22, both parties agreed to "abandon the proposed acquisition," as the proposal "did not resonate."
Ben Celermajer, Head of Strategy at Synthetix, noted that the community's main concerns include a three-month token lock-up period and trading price. He admits that the community's "response has not been as expected" and therefore "has no intention of moving forward with an effort that was supposed to be collaborative and constructive". Previously, Synthetix had tried to address some of the concerns, such as removing the lock-up limit for users holding less than 1 million DRV tokens, but apparently failed to quell the opposition.
Core Concerns of the Derive Community
The key to the deal's breakthrough was the strong questioning of the terms of the deal by members of the Derive community. Many members believe that the token swap ratio does not fairly reflect the true value of the Derive platform. Derive user "Ramjo" bluntly said that this exchange rate is equivalent to "selling at a low point and locking in a low price". Another user, Alvaro HK, found the deal "difficult to justify" and pointed out that Derive generated more revenue than Synthetix.
"I found that Synthetix plans to issue an additional 170 million SNX coins, increasing the supply from 330 million to 500 million, which will further dilute the value of the Derive quote by 60%," Alvaro HK added, "Why was this information not disclosed when asked?"
Alvaro HK further questions that the agreement lacks provisions to prevent Synthetix from "issuing millions of new tokens to continuously dilute our rights" in the future. The old Derive believes that the merger will lead to a loss of rights, and these concerns together constitute the main driving force behind the failure of the transaction.
The Influence of Decentralized Governance
The failure of Synthetix's acquisition of Derive is a vivid illustration of the decisive power of community voices in the decentralized autonomous organization (DAO) model. While Synthetix's strategic goal is to expand its product portfolio by vertically integrating Derive's technology and products, and to compete with major derivatives platforms such as Hyperliquid, Binance, dYdX, and Deribit, decisions that lack broad community support ultimately make it difficult to implement. This case contrasts with Synthetix's previous successful acquisitions of Kwenta and TLX, and highlights the particular community headwinds faced by the Derive case. This proves once again that in a decentralized platform, even if there is a clear strategic intent, it must pass the test of community consensus first.