March 27, 2024
Lido's Potential Exit from Polygon Network Sparks Community Debate
Latest Cryptocurrency News

Lido’s Potential Exit from Polygon Network Sparks Community Debate

Lido, a decentralized staking mechanism, may cease operations on the Polygon network barely seven months after it went live.

A proposal to leave the chain was presented on October 17 and is presently the subject of community discussion. To justify sunsetting Lido on Polygon, the proposal’s author cited a lacklustre income stream, brand risk, a pricey compensation plan, and uncertainty over Polygon’s direction.

The proposal’s creator, “kentie,” said on the Lido governance forum, “This ROI is a sheer waste of LDO/stETH incentives. I am not an active DAO member.”

Kentie also referred to Lido’s technological upgrade on Polygon, which appears to have produced a fault that prevented withdrawals for 25 days.

“While we were fortunate to have no FUD around this period, this seems to pose a reputational risk to a protocol with $15B in assets,” stated Kentie.

As of yet, opinions on the idea have tended to favour maintaining Lido’s activities on Polygon.

“If LDO holders would vote to sunset Lido on Polygon protocol it would be a really bad signal to anybody who wants to collaborate with the DAO as trust would be highly impacted. It removes the weight from voted-in proposals and drives to grant-driven collaborations and different types of environments,” stated Marin, a member of the protocol relations team at Lido.

The proposition was made just a few days after the Lido neighbourhood opted to end its participation in the Solana protocol. Lido ceased receiving staking requests on October 16. All node operators are supposed to start off-boarding on November 17. Users have until February 4th, 2024 to unstake their assets on the Solana website.

Image: Freepik

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