Lido on Solana ‘deemed necessary’ after low fees, stakes company says.
Decentralized liquidity staking protocol Lido Finance has announced the decision to cease operations on the Solana blockchain following a community vote by the Lido decentralized autonomous organization.
The Lido Sunset on Solana proposal was first proposed by the Lido Peer-to-Peer Group on September 5, citing unsustainable finances and low fees incurred by Lido on Solana. Voting began on September 29 and ended a week later on October 6.
“After extensive DAO forum discussion followed by community vote, Lido's sunset in the Solana protocol has been approved by Lido token holders and the process will begin shortly,” Lido explained in a post on October 16.
Lido will no longer be accepting inquiries from October 16th. Voluntary intersection operator off-boarding begins Nov. 17, and Lido users must cross on Feb. 4 at the Solana frontage.
“After this date, it needs to be resolved using the CLI,” Lido added.
After extensive DAO discussion followed by community votes, Lido Sunset on Solana has been approved by LDO owners and will launch soon.
More info here: https://t.co/MyImlL1qpap
— Lido (@LidoFinance) October 16, 2023
An earlier proposal said Lido would seek $20,000 per month from Lido Dao over the next five months to support technical maintenance efforts related to the sunning operations at Solana.
Lido's P2P team has been working on the Solana project at Lido since acquiring Chorus One in March 2022.
Since its control, the P2P group has invested about $700,000 in Lido on Solana and earned $220,000, resulting in a net loss of $484,000, according to Mediakov, the author of the proposal.
The option presented on September 5 was to provide Solana with additional funding from Lido Dao – however, 65 million (92.7%) of the 70.1 million LDO tokens (voted by token holders) support Solana's sunset operations. A snapshot of the open source polling platform.
Lido explained that the decision was difficult but necessary:
“While this decision was difficult in the face of many strong relationships within the Solana ecosystem, it was deemed necessary for the continued success of the broader Lido Protocol ecosystem.”
Lido has confirmed that staked-Solana (stSOL) token holders will continue to receive network rewards during the sunset process.
Related: Lido Finance Reveals 20 Downtime Events Due to Validator Configuration Issues
Lido's staking services are currently backed only by Ethereum and Polygon, which have $14 billion and $80 million respectively, according to Lido's website.
Lido launched on Solana on September 8, 2021, when SOL was sold at $189 – an 87% drop from its current price, according to CoinGecko.
Despite the news, SOL rose 8.6% in the last 24 hours.
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