DRV: The Foundation of Derive

Derive is a composable ecosystem of derivatives powered by the DRV token. This blog explains the governance mechanisms, staking incentives, and utility features designed to foster sustainable growth and engagement.

Token Overview

Ticker: DRV
Total Supply: 1,000,000,000
Migration Ratio: 1:1 for LYRA/stkLYRA holders
Chain: Ethereum Mainnet and Derive L2

No new tokens will be minted.

Utility

1. Staking for Governance (stDRV

Stake DRV into stDRV to participate in governance
Staking Features:
- 28-day unlock period or instant unlock with a 20% penalty.
- Non-transferrable to secure governance integrity.
- Voting power can be delegated.

Staking Rewards:

Earn weekly rewards funded by DAO emissions.
6 months post-TGE, emissions decrease and transition to buyback-funded rewards.

2. Governance Framework

Governance will operate entirely on Derive L2, offering:

Proposal Creation Wizard: Streamlined tools for drafting proposals.
Delegation Flexibility: Re-delegation and partial delegation for institutional participants.
Low-Cost Voting: Leveraging Derive L2 for minimal fees.

3. Protocol Usage Incentives

DRV incentivizes trading, liquidity provision, and ecosystem engagement:

Weekly Emission Pool: Up to 2,500,000 DRV allocated for trading and liquidity programs.
Unused Rewards: Returned to the DAO treasury.

4. Sustainable Buybacks

25% of protocol revenue funds weekly DRV buybacks.
Ensures long-term demand and treasury growth.

Emissions Schedule

Initial Weekly Rewards: Up to 1,150,000 DRV for staking.
Post-6 Months: Drops to a maximum of 600,000 DRV and transitions to buyback funding.

At a Glance

Feature	Details
Total Supply	1,000,000,000 (fixed)
Migration Ratio	1:1 from LYRA/stkLYRA
Staking Token	stDRV (non-transferrable, 28-day unlock, or 20% instant unlock penalty)
Governance	Delegated voting, proposal wizard, low-cost transactions on Derive L2
Staking Rewards	Weekly emissions transitioning to buyback funding after 6 months
Protocol Incentives	Up to 2,500,000 DRV weekly for trading and liquidity programs
Revenue Buybacks	25% of protocol revenue allocated for DRV buybacks
Pre-Stake Bonus	2.5% boost for users committing DRV during the pre-launch window

DRV combines robust governance, staking incentives, and sustainable emissions to fuel growth. This tokenomics framework prioritizes decentralization, security, and long-term alignment for tokenholders and ecosystem participants.

Summary of Derive Token

Core Components

Derive Chain: An Ethereum rollup leveraging the OP Stack for high performance and security.
Derive Protocol: A generalised risk engine supporting advanced portfolio margining.
Derive Exchange: A self-custodial, high-performance exchange built for both GUI and API users.

Governance Evolution

Fully autonomous governance where staked tokenholders manage the DAO and protocol parameters.
Enables direct token holder control, ensuring decentralization and transparency.

Sustainability Model

DAO earns revenue through protocol fees, rollup fees, and liquidation fees.
Fees support the ecosystem and provide funding for staking rewards and buybacks.

Adoption Strategy

Incentive structures attract traders, liquidity providers, and integrators to the platform.
Flexible rewards and growth experiments align stakeholder interests with long-term protocol success.

Stay tuned for further updates from Derive in 2025.