Synthetix has canceled its proposed $27 million acquisition of the crypto options platform Derive, due to strong opposition from the community. The objections mainly centered on the risks of token dilution and the decoupling of its stablecoin sUSD. The acquisition plan was initially announced on May 14, involving a token swap ratio of 1 SNX for 27 DRV, aiming to combine Synthetix’s market position with Derive’s matching engine to create a leading decentralized derivatives platform. However, the communities of both parties failed to support the proposal, leading Synthetix to withdraw the SIP-415 proposal. Community members pointed out that Derive’s revenue exceeds Synthetix’s, and concerns over the increase in token supply intensified resistance to the acquisition. Derive was originally a project under Synthetix called Lyra but later operated independently. If the acquisition had succeeded, Derive would have received up to 29.30 million SNX tokens, but the significant drop in SNX price and potential dilution risks caused community hesitation. Nonetheless, Synthetix stated it will continue to seek strategic opportunities and is committed to building a top decentralized derivatives platform on the Ethereum mainnet. Currently, platforms such as Binance, dYdX, and Hyperliquid are fiercely competitive, and Coinbase has also announced a $2.90 billion acquisition of the largest digital asset options exchange, Deribit.

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Synthetix has called off its proposed $27 million acquisition of crypto options platform Derive.This decision was made after the initiative received strong criticism from both communities involved.<h2>Public Backlash</h2>The proposed acquisition, first announced in a May 14 blog post, involved a token exchange at a rate of 1 SNX to 27 DRV. The plan was designed to combine Synthetix’s established market presence and on-chain expertise with Derive’s off-chain matching engine to build a leading decentralized derivatives platform.However, the deal was subject to approval from both platforms’ communities, support that failed to materialize.“Synthetix has withdrawn SIP-415, the proposal to acquire Derive after reviewing community and stakeholder feedback,” said the protocol in an update.According to the team, the feedback revealed dissatisfaction with the token exchange terms and Derive’s valuation.On the crypto options platform’s public forum, one user named “Ramjo” said the token exchange rate “poorly reflects the value of Derive,” calling it the “equivalent of selling the bottom.” Another community member, “AlvaroHK,” described the deal as a “terrible proposal” that wouldn’t benefit it at all.They pointed out that Derive earns more revenue than Synthetix and warned about possible risks linked to the latter. This includes the recent depegging of its stablecoin sUSD, which fell to $0.68 in April, and its potential impact on the protocol’s treasury and token supply.In a follow-up, the user questioned why there was no mention of what would stop Synthetix from continuing to print more tokens, revealing that they found guidance showing plans to raise the SNX supply from 330 million to 500 million. They argued that this undisclosed detail would dilute the Derive offer by another 60%.<h2>Battle for Dominance</h2>Derive started as part of Synthetix in 2021 under the name Lyra, but later rebranded and moved to operate independently. This included shifting away from using the sUSD stablecoin and liquidity.If the re-acquisition had gone through, the company would have been issued with up to 29.3 million SNX tokens, with a lock-up period of three months followed by nine months of gradual release. However, with the token trading nearly 97% below its all-time high of $28.53 recorded in February 2021, the dilution risk and reduced value likely contributed to community hesitation.Despite ending the proposal, Synthetix said it will continue to look for strategic opportunities to achieve its goal of building a top decentralized derivatives platform on the Ethereum mainnet.This comes at a time of growing competition in the crypto derivatives space, with platforms like Binance, dYdX, and Hyperliquid all competing for dominance. Coinbase also recently announced a $2.9 billion deal to acquire Deribit, the largest digital asset options exchange.

Synthetix Cancels $27 Million Acquisition of Derive Plan Due to Community Opposition