Synthetix Drops $27M Derive Deal After Backlash

Synthetix Cancels $27M Derive Acquisition Amid Community Concerns

Decentralized finance protocol Synthetix has officially scrapped its proposed $27 million acquisition of crypto options platform Derive after vocal community opposition.

A Synthetix spokesperson told Cointelegraph on May 22 that the acquisition plan “did not resonate” with either community, leading both projects to mutually agree to withdraw from the deal.

The acquisition, initially announced on May 14, proposed a token swap valuing 1 SNX at 27 DRV — effectively placing Derive’s worth at $27 million. The deal was contingent on approval from both the Synthetix and Derive communities.

However, community members quickly raised red flags. Critics on Derive’s forum argued the exchange rate undervalued Derive and disproportionately benefited Synthetix. Some users even claimed Derive generates more revenue than its proposed acquirer.

Source: Synthetix

Derive user “Ramjo” criticized the proposed rate as “a poor reflection of the value of Derive as a platform,” calling it akin to “selling the bottom.” Another contributor, “AlvaroHK,” said the deal was “difficult to justify,” citing Derive’s stronger revenue performance and a lack of safeguards against SNX token inflation.

AlvaroHK pointed to a potential increase in SNX supply from 330 million to 500 million — a 60% dilution risk that was not clearly disclosed, according to their post.

In response, Synthetix’s strategy lead Ben Celermajer acknowledged the community’s disapproval, noting that while some found the proposal fair, “the response fell short of expectations.” He added that a revised offer, including no lock-up for DRV holders with less than 1 million tokens, failed to win enough support.

AlvaroHK claims Derive generates more revenue than Synthetix, which makes the deal a tall order to justify. Source: Derive

The failed deal also underscores Derive’s shift away from Synthetix, despite its origins as Lyra — a project incubated within the Synthetix ecosystem. Derive has since moved away from using Synthetix’s sUSD stablecoin and liquidity pools, signaling a push for greater independence.

Going forward, Synthetix says it will continue exploring new opportunities to build a decentralized derivatives platform on Ethereum mainnet but emphasized that future partnerships must align better with community expectations.

The incident serves as a reminder of the growing power of community governance in DeFi, where user feedback can make or break major strategic moves.