Token

Derive

Lyra

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Nick Forster, co-founder of onchain options exchange Derive, has proposed minting 500 million new DRV tokens — a 50% increase in supply — to bolster the project’s foundation and help secure institutional deals, according to a governance proposal published Friday.
The plan would allocate the newly issued tokens to the Derive Foundation (formerly the Lyra Foundation), with 46% earmarked for core contributors whose allocations have largely vested. The tokens would vest over four years and could only be sold if DRV’s market capitalization exceeds $150 million, well above its current $28.5 million, according to CoinGecko data.
Forster said Derive has already secured one “major partnership” to bring institutional-grade liquidity and custody services to the protocol, while advanced talks with other leading <a href="https://financefeeds.com/b2broker-receives-best-liquidity-provider-award-at-forex-traders-summit-dubai-2025/" rel="noopener noreferrer nofollow">traders and liquidity providers</a> are underway. He did not identify the partner, and Derive did not immediately respond to a request for comment. Industry sources suggest that Derive has been in discussions with custodians such as Fireblocks and Copper, both of which service large hedge funds and <a href="https://financefeeds.com/crypto-otc-desks-trading-volume-outperforming-lmax-and-erisx-by-1800-adv-report-finds/" rel="noopener noreferrer nofollow">OTC desks entering crypto derivatives markets</a>.
“For the Foundation to close strategic deals and drive adoption, it needs a dedicated token budget at scale,” Forster wrote. The proposed allocation, he added, would help the exchange compete with Deribit, the <a href="https://financefeeds.com/bybit-appoints-new-leader-to-spearhead-crypto-options-market-expansion/" rel="noopener noreferrer nofollow">market leader in crypto options</a>, which was acquired by Coinbase in August for $2.9 billion.
The move marks a reversal of Derive’s earlier pledge not to expand token supply. When the project rebranded from Lyra to Derive, the conversion maintained a flat <a href="https://financefeeds.com/pyusd-surpasses-half-a-billion-tokens-in-market-supply/" rel="noopener noreferrer nofollow">supply of 1 billion tokens</a> through a 1:1 swap. Forster estimated that under the new plan, existing holders would be diluted by at most 8.25% annually for the next four years.
Token inflation remains a sensitive issue in DeFi, as projects such as Uniswap and Aave have faced community pushback over treasury allocations, raising the stakes for Derive’s governance vote.
The proposal also comes after Derive abandoned a planned merger with Synthetix in May. Forster said the team has since cut ties with investors and contributors who supported the deal, which was scrapped amid concerns it undervalued the options platform. The merger plan had originally valued Derive at less than $50 million, compared with Synthetix’s fully diluted valuation of more than $1 billion, leading to strong opposition from DRV tokenholders.
Launched in 2021, Derive operates as a decentralized protocol for <a href="https://financefeeds.com/bybit-launches-easy-options-to-simplify-crypto-options-trading/" rel="noopener noreferrer nofollow">trading crypto options</a> onchain. The exchange is now seeking to position itself as a more institutional-grade venue, in contrast to its retail-driven roots. The platform processed roughly $300 million in cumulative options volume in 2024, according to Dune Analytics, a fraction of centralized rivals but notable for an onchain-only platform.
If approved by tokenholders, the mint would take Derive’s supply to 1.5 billion DRV tokens, creating what Forster described as the resources needed to keep talent on board and secure alignment with large-scale partners. A governance vote on the proposal is expected to run for seven days, with a quorum threshold of 30 million DRV required. If passed, the new issuance would make Derive one of the largest token-funded treasuries in the DeFi derivatives space.
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