The decentralized finance platform Synthetix has called off its $27 – million plan to acquire the crypto options platform Derive due to negative feedback from the community. Here are the details:
Announcement of the acquisition: On May 14, Synthetix announced that it would acquire Derive through a token – exchange deal, pricing 1 SNX token to 27 DRV tokens, which would value Derive at around $27 million, subject to the approval of both communities.
Community concerns: Community members of both projects had several concerns. Derive token holders were worried about the exchange rate and the overall benefit to the platform. One user claimed that Derive generates more revenue than Synthetix, and there was no clause in the agreement to prevent Synthetix from issuing new tokens and diluting the value of Derive’s tokens. Another concern was the three – month token lock – up period.
Scuttling the deal: On May 22, a Synthetix spokesperson told Cointelegraph that the acquisition proposal “did not resonate” with the communities, and both projects agreed to “step back from the proposed acquisition”. Synthetix’s strategy lead, Ben Celermajer, said that although some holders from both communities believed the deal was fair, the overall response fell short of expectations, and they had no intention of proceeding with the deal.
Celermajer also said that Synthetix will continue to evaluate opportunities for building a decentralized derivatives platform on the Ethereum mainnet.
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