Decentralized options protocol Derive’s co-founder Nick Forster proposed a somewhat radical way to fund the project’s institutional expansion at the expense of holders of its native token.

The proposal calls for minting an additional 500 million DRV tokens, raising the total supply by 50% from its previous cap of one billion tokens. In effect, that translates to a 33% dilution to existing DRV holders.

The new tokens would be allocated to the Derive Foundation – a new name for the Lyra Foundation – to fund project growth, retain contributors, and secure institutional partnerships.

This story is an excerpt from the Unchained Daily newsletter.

Forster said the “aggressive” proposal would ensure that Derive has the necessary execution capacity required to scale.

The proposal has sparked a divided reaction within the community. Supporters argued that the dilution was justified to fuel future growth, while critics see it as a betrayal of current holders’ interests, fearing that dilution will erode token value and investor confidence.