A Proposal to Discontinue Support for Polygon on Lido
A community member named kentie has put forward a proposal suggesting that Lido, Ethereum’s liquid staking solution, should discontinue its support for Polygon (MATIC). This proposal comes several months after MATIC’s staking and withdrawal functionality was paused due to a bug affecting stMATIC withdrawals.
Kentie points out various reasons for sunsetting MATIC support, including the lackluster revenue generated by the protocol from Polygon, brand risks, and uncertainty surrounding Polygon’s roadmap. The proposal also suggests making Lido a “native ETH liquid staking provider” to avoid assuming risks from smaller pockets of total value locked (TVL).
“Overall, Polygon has struggled to retain DeFi TVL compared to other L2s. Both Solana and Polygon TVLs follow a strikingly similar pattern since Oct 2022.” – kentie
kentie
Kentie also highlights the reputational risk posed by a recent incident related to Polygon, where tokenized MATIC withdrawals from Lido were halted for over 20 days. However, the Lido team seems to oppose this proposal.
Opposition and Clarification from the Lido Team
Marin Tvrdić, the protocol relations contributor for Lido, argues that the recent incident with Polygon should not be a reason to sunset MATIC support. Tvrdić clarifies that no stakers were affected, and services resumed after an audit of the code. Additionally, Tvrdić explains that the TVL metric mentioned by kentie is inaccurate as it shows only the USD value.
“Another important clarification is that total value locked is a wrong metric here. It shows the USD value instead of Matic value. Lido on Polygon protocol is near its all-time high in terms of the staked amount of Matic, while USD value decreased due to market conditions.” – Marin Tvrdić
Marin Tvrdić
Kentie’s proposal comes after Lido’s decision to shut down Solana operations on the protocol. The Lido team believes this move is necessary for the broader success of the Lido protocol ecosystem.
Hot Take: Evaluating Support for Polygon on Lido
The proposal to discontinue support for Polygon on Lido raises important considerations about revenue, brand risks, and uncertainty surrounding Polygon’s roadmap. While kentie highlights a reputational risk stemming from a recent incident, the Lido team argues against sunsetting MATIC support based on the lack of impact on stakers and the inaccurate use of TVL metrics. Ultimately, a decision must be made that aligns with the long-term goals and stability of the Lido protocol ecosystem.
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