Decentralized finance platform Synthetix has axed its $27 million plan to acquire crypto options platform Derive after negative community feedback.

A Synthetix spokesperson told Cointelegraph on May 22 that its acquisition proposal, pitched to its community and to Derive’s, “did not resonate,” and both projects agreed to “step back from the proposed acquisition.”

Synthetix said on May 14 that it would acquire Derive in a token exchange deal, pricing 1 SNX token to 27 DRV tokens, which would value Derive at around $27 million, pending approval from both communities. 

Synthetix strategy lead Ben Celermajer told Cointelegraph that other community concerns were the three-month token lock-up period and the deal’s price, part of which Synthetix tried to address with no lock-up for holders of less than 1 million DRV. 

“While we understand the commercials did not resonate with all community members, a number of holders from both communities believed the deal was fair and acceptable,” he said.  

“However, we acknowledge that the response fell short of expectations, and we have no intention of moving forward with something that was intended to be a collaborative and constructive endeavor.” 

Celermajer said Synthetix will continue evaluating opportunities for building a decentralized derivatives platform on the Ethereum mainnet.

Derive community concerned on deal’s benefits

Derive community members expressed concerns over the deal on the project's forum, particularly around the token exchange rate and the deal's overall benefit to the platform.

Derive user “Ramjo” wrote on May 14 that the token exchange rate is “a poor reflection of the value of derive as a platform,” and the “equivalent of selling the bottom and locking in lows.” 

Another user, “AlvaroHK,” called the deal “difficult to justify,” as they claimed that Derive generates more revenue than Synthetix, and there was no clause in the agreement to stop Synthetix from “printing millions of new tokens and keep diluting us.”