May 21, 2025
The following post contains a recap of news, projects, and important updates from the Spartan Council and Core Contributors from last week.
👉TLDR
- SIP-415: Proposal to Acquire Derive (formerly Lyra)
- Strategic acquisition to expand Synthetix’s derivatives suite (Perps and future Options)
- $27M valuation; 27 $DRV <> 1 $SNX exchange ratio
- Funded by minting 29.3M SNX, pending dual council approval (Synthetix and Derive)
- Why Derive?
- DeFi Perps market has consolidated (HyperLiquid dominating)
- Brief window to launch competitive L1 Perps exchange before others go live
- Derive brings tech and team; Synthetix adds brand, incentives, and liquidity
- Why Acquire, Not License?
- Licensing adds risk; acquisition includes team and shortens V4 delivery timeline
- Accelerates launch from months → weeks
- Market makers already in discussions to support the L1 rollout
- Big Picture
- Complements Synthetix’s B2B → B2C pivot and builds a full-stack derivatives exchange
- Aims to compete directly with top centralized exchanges
- Governance vote coming soon — stay tuned!
Spartan Council and SIP updates
The Spartan Council had a bonus meeting last week to discuss the new proposal to acquire Derive, formerly Lyra, and expand Synthetix’s derivative offering. This acquisition is time-sensitive, as Kain highlighted that many older DeFi Perps projects have faded out in the past couple of years, with HyperLiquid currently dominating the market. However, he believes there is a brief window of opportunity to capitalize on minimal competition before other exchanges come online in the next six months.
Kain explained that this “winner-takes-all” dynamic is especially prominent in DeFi, where a number of protocols, including Synthetix, have maintained a top spot based on the incentives offered. However, the landscape is shifting, and he believes the future of DeFi on L1 might start looking more like the centralized exchange space, where strong demand from users will drive competition.
Even with all of the UX improvements, the biggest roadblock for high volume traders is still bridging and liquidity issues, which is why the SC has opted to pursue an L1 Perps exchange (and Derive would become part of the V4 Synthetix Suite on L1).
The acquisition of Derive would mark a significant shift for Synthetix. Over the past six months, Synthetix has transitioned from a B2B model to B2C, focusing on bringing partners and customer-facing protocols back in-house. The proposal includes an exchange ratio of 27 $DRV to 1 $SNX, representing an approximate $27 million valuation of Derive. The deal, however, would be funded by minting 29.3 million new SNX tokens, and would therefore need council approval from both Synthetix and Derive.
Once acquired, Derive would become part of the Synthetix Suite in the upcoming V4 update on L1, starting with Perps and eventually expanding to options. This would round out Synthetix’s offering, creating a comprehensive derivatives exchange. With futures and options added to the platform, Synthetix would be better aligned with top centralized exchange offerings, providing a more robust and competitive ecosystem for users.
There was a question from the audience about why Synthetix would choose to acquire Derive rather than simply licensing its technology. Kain made it clear that licensing would introduce unnecessary risk, while Burt emphasized that the acquisition would also include the current Derive team, which would be pivotal in helping build out the Synthetix derivative products.
Additionally, Kain noted that while Derive’s technology is impressive, one of the biggest challenges they’ve faced is getting market makers on board. However, Kain expressed confidence that Synthetix could help with this, as he has already engaged with some interested market makers for the L1 launch.
Lastly, in response to questions about what value Synthetix could offer Derive, the SC emphasized the power of brand recognition and the ability to create the right incentives to build liquidity and capture trading volume, which is something Derive has struggled to achieve independently. By bringing Derive into the Synthetix fold, the combined entities would be well-positioned to deliver a unique trading experience ahead of any competitors on L1.
The acquisition would also significantly accelerate the delivery timeline for V4, reducing the time from months to just a few weeks. With this speed, Synthetix would be able to launch the new offering quickly, capitalizing on the current market conditions and positioning itself as a dominant player in the derivatives space.
Stay tuned for updates from us as this proposal moves through governance.
