Decentralized finance platform Synthetix has axed its $27 million plan to acquire crypto options platform Derive after negative community feedback. A Synthetix spokesperson told Cointelegraph on May 22 that its acquisition proposal, pitched to its community and to Derive’s , “did not resonate,” and both projects agreed to “step back from the proposed acquisition.” Synthetix said on May 14 that it would acquire Derive in a token exchange deal, pricing 1 SNX token to 27 DRV tokens, which would value Derive at around $27 million, pending approval from both communities. Synthetix strategy lead Ben Celermajer told Cointelegraph that other community concerns were the three-month token lock-up period and the deal’s price, part of which Synthetix tried to address with no lock-up for holders of less than 1 million DRV. “While we understand the commercials did not resonate with all community members, a number of holders from both communities believed the deal was fair and acceptable,” he said. “However, we acknowledge that the response fell short of expectations, and we have no intention of moving forward with something that was intended to be a collaborative and constructive endeavor.” Celermajer said Synthetix will continue evaluating opportunities for building a decentralized derivatives platform on the Ethereum mainnet . Source: Synthetix Derive community concerned on deal’s benefits Derive community members expressed concerns over the deal on the project's forum, particularly around the token exchange rate and the deal's overall benefit to the platform. Derive user “Ramjo” wrote on May 14 that the token exchange rate is “a poor reflection of the value of derive as a platform,” and the “equivalent of selling the bottom and locking in lows.” Related: Synthetix founder threatens SNX stakers with ‘the stick’ to fix SUSD depeg Another user, “AlvaroHK,” called the deal “difficult to justify,” as they claimed that Derive generates more revenue than Synthetix, and there was no clause in the agreement to stop Synthetix from “printing millions of new tokens and keep diluting us.” AlvaroHK claims Derive generates more revenue than Synthetix, which makes the deal a tall order to justify. Source: Derive “I have found the guidance that Synthetix plans to issue an additional 170 million SNX to increase its supply to 500 million from 330 million,” AlvaroHK added in a follow-up post. “Why this information is not disclosed when asked about it? It will dilute an additional 60% off the value of the offer made to Derive,” they added. Derive, which Synthetix started in 2021 as Lyra, operated as a decentralized options protocol but remained part of the Synthetix ecosystem. It eventually rebranded to Derive and took steps to operate independently from Synthetix, such as moving away from using Synthetix’s sUSD stablecoin and liquidity. Magazine: Metric signals $250K Bitcoin is ‘best case,’ SOL, HYPE tipped for gains: Trade Secrets
