A planned $27 million merger between decentralized derivatives platforms Synthetix and Derive has been canceled following significant backlash from their token holders and communities. The deal, initially proposed in mid-May, aimed to have Synthetix acquire Derive — formerly known as Lyra — through a token swap that would have integrated Derive's decentralized options technology into Synthetix's ecosystem on Ethereum.
Under the terms, Synthetix intended to mint 29.3 million new SNX tokens to fund the acquisition at a swap ratio of 27 Derive tokens (DRV) for 1 Synthetix token (SNX). Both protocols formalized the proposal via governance frameworks SIP-415 and DIP, but these were withdrawn after intense discussions and critical community feedback.
The core issues centered on Derive's valuation and growth trajectory, which many in its community felt was undervalued relative to its recent revenue outperformance compared to Synthetix. Synthetix's minting of new tokens also raised concerns about dilution of existing SNX holders' value. Derive’s community voiced their dissatisfaction strongly, calling the proposed exchange terms unfair.
The cancellation means Synthetix will no longer integrate Derive’s infrastructure in its upcoming Perps V4, a centralized limit order book-based derivatives product on Ethereum, and will seek alternative means to expand its derivatives offerings. Derive reaffirmed its commitment to independent growth following the cancellation.
Synthetix continues to position itself as a decentralized asset insurance protocol enabling minting and trading of synthetic assets collateralized by SNX, while Derive has distanced itself recently from Synthetix, dropping its stablecoin sUSD.