Synthetix Scraps $27M Acquisition of Crypto Options Platform Derive After Users Push Back

Synthetix has pulled the plug on its proposed $27 million acquisition of crypto options platform Derive after users from both communities pushed back on the terms of the deal.

Synthetix is pulling the plug on its proposed $27 million acquisition of crypto options platform Derive after users from both communities pushed back on the terms of the deal.

The decentralized derivatives platform confirmed on Wednesday that it would not move forward with the acquisition following what it described as underwhelming support.

“The proposal did not resonate,” a Synthetix spokesperson said, adding that both sides agreed to walk away.

The deal, which was first floated on May 14, would’ve seen Synthetix acquire Derive via a token swap, offering 27 DRV tokens for each SNX—an exchange rate that valued Derive at around $27 million. The transaction was contingent on approval from both communities. But feedback was anything but supportive.

Main sticking points included the three-month token lock-up and the pricing of the deal, according to Synthetix strategy lead Ben Celermajer. The team tried to ease concerns by waving the lock-up for smaller DRV holders but to no avail.

“While some members viewed the terms as fair, the broader response missed the mark,” Celermajer said. “This was meant to be collaborative. We’re not forcing something through that doesn’t have backing.”

Synthetix says it’s still committed to building a decentralized derivatives stack on Ethereum, but for now, Derive won’t be part of it.

Opposition from Derive’s community was swift and vocal. On Derive’s forum, users questioned the fairness of the 27:1 token exchange, with one contributor calling it the equivalent of “selling the bottom.”

The Derive team responded by saying that they appreciated the feedback but ultimately decided to move forward separately.

“We believe that both protocols can continue to thrive in the ecosystem without merging,” the Derive team said.

The decision to abandon the acquisition is a setback for Synthetix, which has been trying to expand its offerings beyond Synths. Derive’s technology could have helped Synthetix to offer a wider range of options and other derivatives products.

However, the lack of support from both communities indicates that there were fundamental disagreements over the terms of the deal. The Derive community felt that the token swap was undervalued, while some members of the Synthetix community expressed concerns about the lock-up period and the potential for value erosion.

Ultimately, Synthetix and Derive agreed to part ways amicably, and both protocols will continue to pursue their own independent paths.