Decentralized liquid staking giant Lido Finance has decided to stop accepting new solana (SOL) token staking requests after Lido’s LDO token holders unilaterally voted in favor of discontinuing the service.
Staking SOL on Lido will no longer be available to new users, while the front-end will no longer be able to stake existing tokens in February 2024. As of Tuesday, about $55 million worth of SOL tokens are locked on Lido. data showsa significant decline from the peak of $440 million in April 2022.
“After much discussion and a vote by Lido DAO members, it was decided that the best course of action would be to phase out Lido on Solana,” Lido Developers said in a message.
“While this decision was difficult in light of the many strong relationships within the Solana ecosystem, it was considered a necessity for the continued success of the broader Lido protocol ecosystem,” the developers added.
Over 92% of the Lido community voted to discontinue the product rather than choosing to continue the service, a vote that is ended on October 5 shows. In discussions leading up to the vote, some community members pointed out that the mentioned high costs by P2P developers to maintain the service has been a point of contention.
DAOs, short for decentralized autonomous organizations, are a blockchain-based organizational or business form often governed by a native crypto token. Staking refers to locking tokens onto a protocol to help validate transactions and maintain a blockchain network in exchange for rewards.
a proposal floated of P2P Validator, the developers who built the product on Lido in early September revealed that they had suffered losses of over $480,000 over the past year, compared to the $700,000 spent to build the product. It shared concerns that targets could not be achieved in the coming year, citing difficult market conditions.
“Achieving even 2% of market share by 2023-2024 seems unlikely, especially in the current Solana market, without any marketing support and given Lido DAO’s Commission Resolution 22 to end all incentives in Solana,” the proposal said of the team.
P2P Validator sought funding from Lido in its proposal to continue offering the SOL staking product to users, failing which it would have to discontinue the product.