Decentralized liquid staking protocol Lido Finance has announced a decision to cease operations on the Solana blockchain following a community vote in Lido’s decentralized autonomous organization.
The proposal to end Lido on Solana was first raised by Lido’s peer-to-peer team on September 5, citing unsustainable financials and low fees generated by Lido on Solana. Voting started on September 29 and ended a week later on October 6.
“After an extensive DAO forum discussion followed by a community vote, the termination of the Lido on Solana protocol was approved by Lido token holders and the process will begin shortly,” Lido explained in an October 16 post.
Lido will not accept strike requests from October 16. Voluntary node operator off-boarding will begin on November 17, and Lido users must de-deploy on Solana’s frontend by February 4.
“After this date, the undo must be done using the CLI,” Lido added.
After an extensive DAO discussion followed by a community vote, the sunset of Lido on Solana was approved by LDO holders and will commence shortly.
More information here: https://t.co/MyImL1qpap
— Lido (@LidoFinance) October 16, 2023
Under the previous proposal, Lido requested $20,000 per month from Lido DAO to support technical maintenance efforts related to sunset operations on Solana over the next five months.
Lido’s statement regarding the termination of services on Solana. Source: Lido.fi
Lido’s P2P team has been working on the Lido on Solana project since its acquisition from Chorus One in March 2022.
Since the acquisition, the P2P team has invested about $700,000 in Lido on Solana and generated $220,000 in revenue, resulting in a net loss of $484,000, according to mediakov, the proposal’s author.
The alternative in the September 5 proposal was to provide more funding to Solana from Lido DAO – but 65 million (92.7%) of the 70.1 million LDO tokens (voted by token holders) were in favor of it instead cessation of operations on Solana. open source voting platform Snapshot.
Lido explained that the decision was difficult but necessary:
“While this decision was difficult in light of the numerous strong relationships within the Solana ecosystem, it was considered a necessity for the continued success of the broader Lido Protocol ecosystem.”
Lido confirmed that holders of staked Solana (stSOL) tokens will continue to receive network rewards during the sunset process.
Lido’s staking services are now only supported on Ethereum and Polygon, where $14 billion and $80 million have been staked respectively, according to Lido’s website.
Lido launched on Solana on September 8, 2021, when SOL was priced at $189 – an 87% drop from its current price of $24, according to CoinGecko.
Despite the news, SOL is up 8.6% in the past 24 hours.
SOL’s price movements over the past seven days. Source: CoinGecko