Decentralized Staking Protocol Lido Finance to Cease Operations on Solana
Lido Finance, a decentralized liquid staking protocol, has decided to end its operations on the Solana blockchain. This decision was made following a community vote in Lido’s decentralized autonomous organization (DAO).
The proposal to sunset Lido on Solana was put forward by Lido’s peer-to-peer team due to unsustainable financials and low fees generated by the protocol. The voting process took place from September 29 to October 6, and the decision to sunset Lido on Solana was approved by Lido token holders.
As a result, Lido will no longer accept staking requests as of October 16. Voluntary node operator off-boarding will begin on November 17, and users will need to unstake their assets on Solana’s frontend by February 4.
Reasons for Sunsetting Lido on Solana
Lido’s P2P team has been working on the Lido on Solana project since March 2022. However, the team has faced financial difficulties, investing $700,000 into the project but only generating $220,000 in revenue. This has resulted in a net loss of $484,000.
An alternative proposal suggested providing more funding to Solana from Lido DAO. However, the majority of token holders (92.7%) voted in favor of sunsetting operations on Solana instead.
Impact and Continuation of Staking Services
Staked-Solana (stSOL) token holders will continue to receive network rewards during the sunsetting process. However, Lido’s staking services will now only be supported on Ethereum and Polygon.
Lido initially launched on Solana in September 2021 when SOL was priced at $189. Despite the decision to sunset, SOL has seen an 8.6% increase in value over the last 24 hours.
Hot Take: Lido’s Decision to Sunset Lido on Solana
Lido Finance has made the difficult decision to end its operations on the Solana blockchain. The protocol faced financial challenges and low fees, leading to a community vote that approved the sunsetting process. While this decision may impact relationships within the Solana ecosystem, it was deemed necessary for the overall success of the Lido protocol ecosystem. Staked-Solana token holders will continue to receive rewards, but Lido’s staking services will now focus on Ethereum and Polygon. Despite this news, SOL has shown positive price movement in the last 24 hours.
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