Lido Finance Decides to End Operations on Solana Following Community Vote
Summary:
Decentralized liquid staking protocol Lido Finance has decided to end its operations on the Solana blockchain, following a community vote. The decision was attributed to unviable financials and low fees. Lido will stop accepting staking applications from October 16, and users need to unstake on Solana’s frontend by February 4. The Lido peer-to-peer team which took over the Lido on Solana project, invested approximately $700,000, earning a revenue of $220,000, which resulted in a net loss. Staked-Solana (stSOL) token holders will continue to receive network rewards throughout the process.
Lido Finance, a decentralized liquid staking protocol, has decided to bring an end to its activities on the Solana blockchain, following a successful community vote within Lido’s decentralized autonomous organization. The idea to terminate Lido on Solana was first proposed by Lido's peer-to-peer team on September 5, attributing the decision to untenable financial conditions and low fees generated by Lido on Solana. The vote took place starting from September 29 and ended a week later on October 6. "As a result of extensive discussions in the DAO forum followed by a community vote, the closure of Lido on Solana protocol was approved by the Lido token holders and the process will soon commence," announced Lido in an October 16 post. From October 16, Lido will halt taking staking applications. From November 17, voluntary node operator disconnection will start, and by February 4, Lido users will have to unstake on Solana’s frontend. They mention, "Beyond this date, unstaking needs to be done using the CLI."
Initially, Lido had proposed asking for $20,000 per month from the Lido DAO to sustain the technical maintenance efforts for closing the operations on Solana over the next five months. The Lido peer-to-peer team had been involved in Lido on Solana since acquiring it from Chorus One in March 2022. From acquisition, the team has invested approximately $700,000 into Lido on Solana, earning a revenue of $220,000 which results in a net loss of $484,000, as detailed by mediakov, the proposal's author. An alternative proposed on September 5 was to seek additional funding for Solana from Lido DAO. However, 65 million of the 70.1 million LDO token holders (almost 92.7%) voted in favor of ending operations on Solana, as per Snapshot, the open-source voting platform. Lido concluded the choice was a difficult but necessary one for the broader Lido protocol ecosystem's continued success. Lido reassured staked-Solana (stSOL) token holders that they will keep receiving network rewards throughout the sunsetting process.
As per the latest updates, Lido's staking services will only support Ethereum and Polygon, with $14 billion and $80 million staked respectively as seen on Lido's website. Lido initiated its operations on Solana on September 8, 2021, when SOL was worth $189, which is an 87% drop from the current $24 rate, as per CoinGecko. SOL surges 8.6% in the past day, in spite of the news.
Published At
10/17/2023 12:09:21 AM
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