Lido Finance Ends Support For Solana
Lido Finance's decision to wind down its Solana operations was supported by a majority of token holders due to financial concerns.
Lido Finance's decision to cease its Solana operations was not abrupt. The proposal to sunset Lido on Solana was initially presented by Lido's peer-to-peer (P2P) team on September 5. The primary reasons cited were unsustainable financials and the low fees generated by Lido on Solana. Following a detailed discussion in Lido's decentralized autonomous organization (DAO) forum, voting began on September 29 and concluded on October 6.
The community's voice was clear. A significant majority of Lido token holders approved the proposal to wind down Lido's operations on Solana. As a result, Lido ceased accepting staking requests from October 16. Furthermore, voluntary node operator off-boarding is set to commence on November 17. For Lido users on Solana, they have until February 4 to unstake via Solana's frontend. Post this date, unstaking would require the use of the Command Line Interface (CLI).
After extensive DAO discussion followed by community vote, the sunsetting of Lido on Solana was approved by LDO holders and will begin shortly.
More information here: https://t.co/MyImL1qpap — Lido (@LidoFinance) October 16, 2023
The P2P team has been instrumental in Lido's Solana project since its acquisition in March 2022 from Chorus One. Since the takeover, the team invested approximately $700,000 into Lido on Solana. However, the revenue generated was a mere $220,000, resulting in a net loss of $484,000. The initial proposal even sought a monthly support of $20,000 from Lido DAO for technical maintenance related to the sunsetting process over five months.
The alternative to sunsetting operations on Solana was to secure more funding from Lido DAO. However, the community's stance was evident; 92.7% of the 70.1 million LDO tokens voted were in favor of halting operations on Solana. Lido acknowledged the decision's difficulty, especially given the strong ties within the Solana ecosystem.
“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.”
Despite the decision to wind down on Solana, Lido confirmed that staked Solana (stSOL) token holders would continue to receive network rewards throughout the sunsetting process. As for Lido's staking services, they are now exclusively supported on Ethereum and Polygon, with $14 billion and $80 million staked, respectively.
Lido's journey on Solana began on September 8, 2021, when Solana's SOL token was priced at $189. The current price stands at $24, marking a significant decline. However, despite the recent news, SOL has witnessed an 8.6% increase over the last 24 hours.