July 21, 2024
Lido Finance's Decision to Sunset Operations on Solana: A Decentralized Staking Protocol Shift
Latest Cryptocurrency News

Lido Finance’s Decision to Sunset Operations on Solana: A Decentralized Staking Protocol Shift

Protocol for decentralized liquid staking In response to a community vote inside Lido’s decentralized autonomous organization, Lido Finance has decided to discontinue operations on the Solana blockchain.

The Peer-to-peer (P2P) team of Lido first proposed to sunset Lido on Solana on September 5 claiming unstable financials and little fees earned by Lido on Solana. Voting began on September 29 and ended on October 6—a week later.

“After extensive DAO forum discussion followed by community vote, the sunsetting of the Lido on Solana protocol was approved by Lido token holders and the process will begin shortly,” Lido stated in an Oct. 16 post.

As of October 16, Lido will no longer accept staking requests. On Nov. 17, voluntary node operator off-boarding will start, and by Feb. 4, Lido users must unstake on Solana’s front end.

“After this date, unstaking will need to be done using the CLI,” Lido later added.

In a previous proposal, Lido asked Lido DAO for $20,000 per month to help with technological upkeep as Solana operations are shut down over the next five months.

Since purchasing the Solana project from Chorus One in March 2022, Lido’s P2P team has been working on it.

According to Mediakov, the proposal’s author, the P2P team has invested almost $700,000 in developing Lido on Solana and earned $220,000 in revenue, resulting in a net loss of $484,000.

According to open-source voting platform Snapshot, 65 million (92.7%) of the 70.1 million LDO tokens (voted by tokenholders) were in support of sunsetting operations on Solana as opposed to the alternative in the Sept. 5 plan, which was to provide extra funds to Solana via Lido DAO.

Lido said it was a difficult but important choice to be made.

“Whilst this decision was difficult in the face of numerous strong relationships across the Solana ecosystem, it was deemed a necessity for the continued success of the broader Lido protocol ecosystem.”

Holders of staked Solana (stSOL) tokens will continue to receive network benefits during the sunsetting process, according to Lido.

According to Lido’s website, its staking services are now only offered on Polygon and Ethereum, where $14 billion and $80 million have been staked, respectively.

According to CoinGecko, Lido started on Solana on September 8, 2021, when Solana’s SOL SOL was priced at $189, an 87% decrease from its current price of $24.

SOL is up 8.6% over the past 24 hours despite the news.

Image: Wallpapers.com

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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