Co-founder of Derive, Nick Forster, has proposed increasing the supply of the DRV token by 50% to support ecosystem growth.
Proposal to Increase DRV Tokens
Nick Forster proposed the minting of 500 million new DRV tokens. This proposal was published yesterday and aims to expedite deals with institutional partners.
Terms and Allocation of New Tokens
Under the proposal, the new tokens will be transferred to the Derive Foundation. Existing investors will face a maximum dilution of 8.25% per year over four years. 46% of the newly minted tokens will be allocated to the core team, whose vesting period will largely be completed over four years. These tokens can only be sold when DRV's market cap exceeds $150 million.
Competition and Team Changes at Derive
Forster argued that increasing the token supply is necessary to compete with Deribit, the options market leader recently acquired by Coinbase for $2.9 billion. Derive also announced parting ways with some team members and investors who previously supported its merger with Synthetix, which was scrapped in May.
The proposal to expand the supply of DRV tokens is technically justified by the need for growth and competitiveness of Derive in light of market changes.
