Derive co-founder Nick Forster has proposed a significant increase in the supply of the DRV altcoin, which could strengthen the company's market position.
What Does the New Coin Supply Entail?
Forster's plan calls for the creation of 500 million new DRV coins, potentially boosting the overall supply by 50%. The additional coins will be allocated to the Derive Foundation, which is changing its name from the Lyra Foundation. 46% of the new coins will be distributed to key contributors following their vesting periods. The release of these coins is contingent upon DRV achieving a market value exceeding $150 million, significantly higher than its current valuation of around $28.5 million, as reported by CoinGecko.
What Strategic Moves Is Derive Making?
Derive has reportedly finalized an agreement with a corporate partner and is nearing partnerships with major liquidity providers, though specifics remain confidential. This approach signals a strategic pivot from its previous policy of maintaining a static coin supply since converting from LYRA to DRV. The decision to expand the supply marks a departure from Derive's prior commitment to a fixed supply, underscoring the need to remain competitive. The previous merger attempt with Synthetix was aborted in May after investor pushback on valuation concerns.
Key Takeaways and Significance of the Proposal
According to Forster, the proposal is designed to strengthen Derive's competitive edge and foster long-term growth. Key takeaways include: the expansion involves minting 500 million coins; new coins will be allocated to contributors, linked to market conditions; the strategy aims to secure institutional liquidity partnerships.
Derive's proposal to amplify the DRV supply exemplifies its strategic shift to maintain market competitiveness and growth potential in an evolving crypto landscape.
