Might 21, 2025
The next publish incorporates a recap of stories, initiatives, and necessary updates from the Spartan Council and Core Contributors from final week.
👉TLDR
SIP-415: Proposal to Purchase Derive (previously Lyra)Strategic acquisition to develop Synthetix’s derivatives suite (Perps and future Choices)$27M valuation; 27 $DRV <> 1 $SNX change ratioFunded by minting 29.3M SNX, pending twin council approval (Synthetix and Derive)Why Derive?DeFi Perps market has consolidated (HyperLiquid dominating)Transient window to launch aggressive L1 Perps change earlier than others go liveDerive brings tech and staff; Synthetix provides model, incentives, and liquidityWhy Purchase, Not License?Licensing provides threat; acquisition consists of staff and shortens V4 supply timelineAccelerates launch from months → weeksMarket makers already in discussions to help the L1 rolloutBig PictureComplements Synthetix’s B2B → B2C pivot and builds a full-stack derivatives exchangeAims to compete straight with high centralized exchangesGovernance vote coming quickly — keep tuned!
Spartan Council and SIP updates
The Spartan Council had a bonus assembly final week to debate the brand new proposal to amass Derive, previously Lyra, and develop Synthetix’s spinoff providing. This acquisition is time-sensitive, as Kain highlighted that many older DeFi Perps initiatives have light out prior to now couple of years, with HyperLiquid at the moment dominating the market. Nevertheless, he believes there’s a temporary window of alternative to capitalize on minimal competitors earlier than different exchanges come on-line within the subsequent six months.
Kain defined that this “winner-takes-all” dynamic is very distinguished in DeFi, the place plenty of protocols, together with Synthetix, have maintained a high spot based mostly on the incentives supplied. Nevertheless, the panorama is shifting, and he believes the way forward for DeFi on L1 would possibly begin wanting extra just like the centralized change house, the place sturdy demand from customers will drive competitors.
Even with all the UX enhancements, the most important roadblock for top quantity merchants remains to be bridging and liquidity points, which is why the SC has opted to pursue an L1 Perps change (and Derive would turn out to be a part of the V4 Synthetix Suite on L1).
The acquisition of Derive would mark a big shift for Synthetix. Over the previous six months, Synthetix has transitioned from a B2B mannequin to B2C, specializing in bringing companions and customer-facing protocols again in-house. The proposal consists of an change ratio of 27 $DRV to 1 $SNX, representing an approximate $27 million valuation of Derive. The deal, nevertheless, can be funded by minting 29.3 million new SNX tokens, and would subsequently want council approval from each Synthetix and Derive.
As soon as acquired, Derive would turn out to be a part of the Synthetix Suite within the upcoming V4 replace on L1, beginning with Perps and finally increasing to choices. This might spherical out Synthetix’s providing, making a complete derivatives change. With futures and choices added to the platform, Synthetix can be higher aligned with high centralized change choices, offering a extra sturdy and aggressive ecosystem for customers.
There was a query from the viewers about why Synthetix would select to amass Derive quite than merely licensing its expertise. Kain made it clear that licensing would introduce pointless threat, whereas Burt emphasised that the acquisition would additionally embody the present Derive staff, which might be pivotal in serving to construct out the Synthetix spinoff merchandise.
Moreover, Kain famous that whereas Derive’s expertise is spectacular, one of many largest challenges they’ve confronted is getting market makers on board. Nevertheless, Kain expressed confidence that Synthetix might assist with this, as he has already engaged with some market makers for the L1 launch.
Lastly, in response to questions on what worth Synthetix might provide Derive, the SC emphasised the ability of name recognition and the power to create the correct incentives to construct liquidity and seize buying and selling quantity, which is one thing Derive has struggled to realize independently. By bringing Derive into the Synthetix fold, the mixed entities can be well-positioned to ship a singular buying and selling expertise forward of any rivals on L1.
The acquisition would additionally considerably speed up the supply timeline for V4, lowering the time from months to only a few weeks. With this velocity, Synthetix would be capable to launch the brand new providing rapidly, capitalizing on the present market circumstances and positioning itself as a dominant participant within the derivatives house.
Keep tuned for updates from us as this proposal strikes by governance.
