Lido Finance to Cease Support for Solana
Following a DAO vote, the liquid staking protocol, Lido Finance, will cease its operations on the Solana blockchain. Nearly 93% of its participants supported this decision.
In early September, the Lido P2P team, responsible for the platform's development on Solana, first proposed discontinuing support for the network. Developer Yuri Medyakov cited unstable financial metrics and low fee revenue in his announcement.
He noted that the project had invested approximately $700,000 in deploying on Solana for the years 2022-2023, yielding revenue of approximately $220,000.
According to Medyakov, none of the development milestones planned for 2023-2024, including capturing a 2% staking market share, could be achieved without additional support from the Lido DAO.
Another option was to continue operations, for which developers requested $1.5 million in funding for 12 months. This amount included:
- $200,000 per quarter to cover development expenses.
- $600,000 for incentive programs and implementation support.
- $100,000 for establishing customer support in compliance with industry standards. This scenario assumed that Lido's share in Solana staking would grow to at least 1%, generating approximately $200,000 in revenue.
On September 28, both options were put to a DAO vote.
In accordance with the decision, developers closed the acceptance of new staking deposits from October 16. Node operator shutdown will begin on November 17.
Frontend support for Solana will be completely terminated on February 4, 2024. Until that time, the P2P team will receive $20,000 per month for technical activities to conclude their operations on the network.
"The decision to close Lido on Solana does not reflect the protocol participants' lack of faith in the potential and longevity of the blockchain ecosystem as a whole," the team emphasized. It's worth noting that Glassnode analysts assessed the impact of Lido's liquid staking on Ethereum and predicted the protocol's continued growth in the segment.
