Recently, Lido officially released an official statement, announcing that the staking cooperation with SOL will soon come to an end. Starting from October 16, Lido will no longer accept new SOL staking applications.
More importantly, starting from November 17, the participating node operators will gradually withdraw from this cooperation, and on February 4, 2024, Solana's front-end will no longer support Lido-related services. After that, any staking-related operations will need to be completed through the command line interface (CLI).
Lido and Solana officially cancel their cooperation
Nevertheless, Lido still guarantees that stSOL holders can still receive their staking rewards normally during this change.
Lido’s cooperation with Solana stems from the rapid rise of Solana’s blockchain technology, especially its significant contribution in the field of decentralized finance (DeFi). Solana has quickly won the favor of developers and projects with its efficient and low-cost transaction features. Against this backdrop, Lido, as a leading provider of decentralized staking solutions, naturally sees a huge opportunity in partnering with Solana.
Lido's core advantage is that it provides users with a simplified staking process, allowing them to easily stake cryptocurrencies and receive rewards without having to directly participate in the cumbersome staking process. At the same time, Solana's high throughput and low transaction fees create an ideal environment for Lido to provide better services to a large number of users.
The partnership is based on the complementary strengths of both parties. Lido hopes to further expand its business through Solana’s technological strength, while Solana hopes to cooperate with well-known DeFi projects such as Lido to enhance its position in the cryptocurrency community.
However, as recent news reveals, this collaboration seems to have reached its end. Lido has decided to no longer support SOL staking services. There are deep reasons behind this decision. Lido’s peer-to-peer team first proposed to shut down Lido on Solana on September 5, mainly because Lido’s economic model on Solana has become unsustainable, especially due to the low fees generated by Lido on Solana. After a week-long vote, the proposal was passed on October 6.
Since the P2P team acquired Lido on Solana, they have invested about $700,000 but have only received $220,000 in revenue, resulting in a net loss of $484,000. Although there was an alternative proposal in the September 5th proposal to provide more funds from Lido DAO to Solana, according to data from the open source voting platform Snapshot, 65 million of the 70.1 million LDO tokens (92.7%) were in favor of terminating operations on Solana.
This decision reflects Lido’s economic and strategic considerations and marks the end of an era of cooperation between Lido and Solana. From the early proposal to the final voting result, this decision seems to have been foreshadowed.
With the news that Lido will no longer support SOL staking, many stSOL holders may feel confused and uneasy about the future. In this context, it is particularly important to understand the possible impact and how to deal with it.
Post a review of the cooperation between the two parties in the Lido community
1. Staking rewards remain unchanged: First of all, holders can rest assured that their staking income will not be immediately affected. Lido has made it clear that despite the decision to no longer support SOL staking, stSOL holders can still receive their staking rewards normally during this change.
2. Adjustment of operation mode: Starting from February 4, 2024, the Solana front-end service related to Lido will no longer be provided. This means that when stSOL holders need to perform operations such as staking or canceling staking, they will need to turn to the command line interface (CLI). This undoubtedly increases the complexity of the operation, and holders may need to spend time to familiarize themselves with the new operation mode.
3. Uncertainty of market reaction: This decision by Lido may have an impact on the market liquidity and price of stSOL. In particular, if the market reacts poorly to this decision, the price of stSOL may be under pressure. But holders should note that the market's reaction is also affected by a variety of other factors.
4. Long-term considerations: Although the staking rewards of stSOL holders are not affected in the short term, the termination of Lido’s cooperation with Solana may have an impact on the long-term prospects of stSOL. This may require holders to re-evaluate their long-term investment strategies and holding plans.
5. Stay updated: In this period of change, it is crucial to continue to get the latest information. stSOL holders should pay close attention to Lido’s official notifications and updates to ensure that they are kept up to date with all the latest information related to their holdings.
Voting on whether the two parties should cooperate or not
Therefore, facing this decision of Lido, stSOL holders may encounter some challenges, but it also provides an opportunity to re-evaluate and adjust strategies. Holders are advised to remain calm, pay close attention to relevant news and announcements, and make wise decisions based on their own circumstances.
The end of the cooperation between Lido and Solana marks a strategic adjustment of two important projects at a certain stage. In the field of cryptocurrency and decentralized finance, changes in cooperation and strategy are to cope with the ever-changing market environment and user needs. For Lido, this decision may be based on the sustainability of its economic model, market feedback, and long-term planning for future development. For Solana, this may also be an opportunity to re-evaluate its partners and strategic direction in the DeFi field.
For the market and the community, this change may bring short-term uncertainty and volatility, but it also provides space to rethink and explore new opportunities. It is important that both project owners and community members look at this change from a more macro perspective and understand the reasons behind it and its long-term impact.
In general, the end of the cooperation between Lido and Solana does not mean that there are no more possibilities for the future of both parties. On the contrary, it may be a new beginning, bringing more opportunities and challenges to both parties. In this fast-growing and ever-changing field, adaptability, innovation, and continuous learning are key. We look forward to seeing more innovation and value that Lido and Solana can bring in the future.
