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Lido on Solana wind down ‘deemed a necessity’ after low fees, says staking firm

  • Decentralized liquid staking protocol Lido Finance will cease operations on the Solana blockchain.
  • The decision was made following a community vote in Lido’s decentralized autonomous organization.

The proposal to sunset Lido on Solana was first put forward by Lido’s peer-to-peer team on Sept. 5. The reasons cited were unsustainable financials and low fees generated by Lido on Solana. Voting commenced on Sept. 29 and finished on Oct. 6.

“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 explained in an Oct. 16 post.

Key points:

  • Lido will no longer accept staking requests as of Oct. 16.
  • Voluntary node operator off-boarding will start on Nov. 17.
  • Lido users will need to unstake on Solana’s frontend by Feb. 4.

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

“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.”

Lido confirmed that staked-Solana (stSOL) token holders will continue to receive network rewards throughout the sunsetting process.

The earlier proposal saw Lido seeking $20,000 per month from Lido DAO to support technical maintenance efforts involved with sunsetting operations on Solana over the next five months.

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

Since the takeover, the P2P team has invested about $700,000 into Lido on Solana and made $220,000 in revenue, resulting in a net loss of $484,000, according to the mediakov, the author of the proposal.

The alternative in the proposal was to provide more funding to Solana from Lido DAO. However, the majority of LDO token holders voted in favor of sunsetting operations on Solana instead.

Lido’s staking services are now only supported on Ethereum and Polygon.

Lido launched on Solana on Sept. 8, 2021, when SOL was priced at $189. Despite the wind-down news, SOL is up 8.6% over the last 24 hours.

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