Derive Onchain wants to strengthen the DRV token to gain market share in the options race.

The onchain options trading platform Derive is preparing for a major strategic move: doubling the token supply of DRV by issuing an additional 500 million tokens. This move is proposed by co-founder Nick Forster to strengthen the platform’s capital and attract major institutional partners.

Token issuance and allocation plan

All 500 million new tokens will be transferred to the Derive Fund, the project’s long-term strategic management entity. Of these, approximately 250 million tokens will be allocated to core team members, but with strict restrictions: the supply will be gradually released over 4 years and cannot be sold unless DRV’s market capitalization exceeds $150 million.

According to the latest data, the current price of DRV is $0.06 with a circulating market cap of about $55.62 million. For the investor community, the dilution rate is controlled at over 8% per year over four years, which is relatively moderate compared to other projects in the industry.

Reasons behind the expansion decision

Forster explains that increasing the supply is necessary for Derive to compete with giants in the onchain options market. He points to Coinbase’s acquisition of Deribit for $2.9 billion as evidence of the scale Derive needs to achieve to remain competitive.

Additionally, Forster revealed that a significant agreement related to custody and liquidity provision at the organizational level has been finalized, although specific details have not yet been publicly disclosed.

Controversies surrounding this decision

This expansion move has sparked considerable debate within the community. Previously, Derive committed to maintaining a stable supply during its rebrand from LYRA to DRV, with a cap set at 1 billion tokens. The issuance of an additional 500 million tokens now appears to contradict that commitment.

However, Forster affirms that the new issuance is a necessary step to drive growth and retain talent as competitors are scaling up their operations.

The turbulent context of Derive

This decision comes at a time when Derive is going through a volatile period. Its attempt to merge with Synthetix failed in May after investor opposition, leading to major changes in the team and investor structure. With this new strategy, Derive is betting that additional resources in the form of tokens will help them build credibility and market share in a market dominated by larger, better-capitalized competitors.