Decentralized liquid staking protocol Lido Finance recently made the decision to discontinue its operations on the Solana blockchain. This decision came as a result of a community vote held within Lido’s decentralized autonomous organization (DAO). The proposal to sunset Lido on Solana was initially presented by Lido’s peer-to-peer team on September 5th. The team cited unsustainable financials and low fees generated by Lido on Solana as the main reasons behind this proposal. The voting process began on September 29th and concluded on October 6th.
Following extensive discussions in the DAO forum and the subsequent community vote, the proposal to sunset Lido on Solana was approved by Lido token holders. In a blog post published on October 16th, Lido explained that the process will commence shortly. As a result, Lido will no longer be accepting staking requests as of October 16th. Moreover, voluntary off-boarding of the node operators will begin on November 17th, and Lido users will be required to unstake their assets on Solana’s frontend by February 4th. After this date, unstaking will need to be done using the Command Line Interface (CLI).
The proposal originally presented by Lido sought $20,000 per month from Lido DAO to support the technical maintenance efforts associated with sunsetting operations on Solana over the next five months. Lido’s peer-to-peer team has been actively working on the Lido on Solana project since acquiring it from Chorus One in March 2022. According to the author of the proposal, the team invested approximately $700,000 into Lido on Solana and generated $220,000 in revenue. However, this resulted in a net loss of $484,000.
The alternative proposal in September suggested providing more funding from Lido DAO to support Solana. However, an overwhelming majority of Lido token holders (92.7% of the voting tokens) voted in favor of sunsetting operations on Solana instead, as reported by the open-source voting platform Snapshot.
Lido acknowledged that this was a difficult decision to make but deemed it necessary for the long-term success of the broader Lido protocol ecosystem. Despite the discontinuation of operations on Solana, Lido confirmed that staked-Solana (stSOL) token holders will continue to receive network rewards throughout the sunsetting process.
It is important to note that Lido’s staking services are still available on Ethereum and Polygon. As per Lido’s website, approximately $14 billion and $80 million are staked on Ethereum and Polygon, respectively. Lido initially launched on Solana on September 8, 2021, when the price of SOL was $189. Currently, SOL is priced at $24, representing an 87% drop in value, according to CoinGecko. Despite the news of Lido’s sunset on Solana, SOL has experienced an 8.6% increase in price over the last 24 hours.
In conclusion, Lido Finance has decided to end its operations on the Solana blockchain due to financial concerns and low fees. This decision was made following a community vote, with the majority of Lido token holders supporting the proposal. The process of sunsetting Lido on Solana will begin shortly, and users are required to unstake their assets by February 4th. Despite this development, Lido’s staking services are still available on Ethereum and Polygon.