Decentralized finance platform Synthetix recently made headlines after deciding to cancel its $27 million acquisition plan of crypto options platform Derive following negative feedback from the community. The move came after an initial proposal to acquire Derive was met with resistance from both the Synthetix and Derive communities.

According to a spokesperson from Synthetix, the acquisition proposal did not resonate with the community members of both projects, leading to the decision to step back from the proposed acquisition. The initial proposal involved a token exchange deal where 1 SNX token would be priced at 27 DRV tokens, valuing Derive at approximately $27 million. However, concerns were raised about the three-month token lock-up period and the deal's pricing, prompting the decision to abandon the acquisition.

Ben Celermajer, Synthetix's strategy lead, acknowledged the community's concerns and stated that while some members believed the deal was fair, the response fell short of expectations. He emphasized that the intention was for the acquisition to be a collaborative and constructive endeavor, which was not achieved in this case. As a result, Synthetix has decided to explore other opportunities for building a decentralized derivatives platform on the Ethereum mainnet.

Members of the Derive community also expressed their reservations about the proposed deal on the project's forum. Some users raised concerns about the token exchange rate not reflecting the platform's true value and the potential dilution of their holdings due to an increase in the token supply. One user, AlvaroHK, pointed out that Derive generates more revenue than Synthetix and questioned the justification for the acquisition.

Derive, originally launched by Synthetix as Lyra in 2021, operated as a decentralized options protocol within the Synthetix ecosystem. However, the platform later rebranded to Derive and took steps to operate independently, including moving away from using Synthetix's sUSD stablecoin and liquidity.

The decision to abandon the acquisition reflects the importance of community feedback and consensus in the decentralized finance space. Synthetix's commitment to evaluating opportunities for decentralized derivatives platforms underscores the continuous evolution and innovation within the DeFi sector. As the industry continues to grow and mature, collaboration and transparency between projects and their communities will remain crucial for sustainable growth and success.

Source: https://cointelegraph.com/news/synthetix-cans-27m-derive-deal-after-community-concerns?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound