DAO Decision: Lido Finance Ends Solana Staking Product
Lido Finance, a prominent player in the world of decentralized liquid staking, has announced a significant decision to cease accepting new staking requests for Solana (SOL) tokens. This resolution comes in the wake of a resounding vote by Lido's LDO token holders, which clearly demonstrated majority support for discontinuing the service.
As a result of this decision, new users will no longer have the option to stake SOL on the Lido platform, and the front-end interface will cease to support the unstaking of existing tokens, beginning in February 2024. Current data indicates that approximately $55 million worth of SOL tokens are currently locked within the Lido platform, marking a substantial decline from the peak observed in April 2022 when it reached $440 million.
The Lido development team made this decision public through a statement, explaining:
"After extensive deliberation and a vote conducted by Lido DAO members, it was concluded that winding down Lido on Solana would be the most appropriate course of action."
They also emphasized that while this decision was a challenging one, especially considering the strong relationships within the Solana ecosystem, it was deemed necessary for the continued success of the broader Lido protocol ecosystem.
The outcome of the vote, which concluded on October 5, revealed that over 92% of the Lido community favored discontinuing the product rather than maintaining it. Prior to the vote, some members of the community expressed concerns about the high costs associated with P2P developers' efforts to maintain the service.
Decentralized Autonomous Organizations (DAOs) are entities based on blockchain technology and are typically governed by native crypto tokens. Staking involves the process of locking up tokens within a protocol to validate transactions and support the overall operation of a blockchain network, often resulting in rewards for participants.
In early September, a proposal presented by P2P Validator, the developers responsible for the Lido product, unveiled significant losses exceeding $480,000 in the past year, while the expenses incurred in building the product amounted to $700,000. The team expressed concerns about the challenges they anticipated in achieving their objectives in the coming year, particularly in light of challenging market conditions.
The proposal also included a request for funding from Lido to sustain the SOL staking product for users. In the absence of this support, P2P Validator indicated that they would have no choice but to discontinue the product.
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