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Leading decentralized liquid staking platform Lido Finance took a bold decision on its offering of Solana (SOL) staking. Lido DAO is all set to conclude its operations on the Solana staking project due to financial challenges faced by the P2P team.
In an announcement from the team, they mentioned that the winding down of the project will take place gradually in the upcoming months. Holders of the stSOL token have been given time till February 2024 to unstake their assets using the Lido on the Solana front end.
The choice to discontinue Lido’s liquid staking solution on the Solana blockchain follows an “extensive DAO discussion and community vote,” as revealed in an announcement made on Monday, October 16, 2023.
As per the results obtained from a snapshot, more than 92% of Lido token holders cast their votes in favor of discontinuing the Lido on Solana protocol. In contrast, slightly over 7% of the voters opted to provide funding to the project.
The P2P validator team, responsible for the development of Lido on Solana presented two scenarios to the community members. They could either allocate $1.5 Million to support the project’s ongoing operations, or they could choose to discontinue their presence on the Solana blockchain.
Solana Project Was NPA for Lido Finance
Yuri Mediakov from P2P, who introduced the proposals, provided a breakdown of project and business developments, as well as profit and losses. According to Mediakov, the team invested approximately $700,000 in development and support but generated revenue of only $220,000, resulting in a loss of $484,000.
The proposal also outlined that if the community chose the option to wind down the project, the team would require $20,000 in monthly support from the Lido DAO for technical maintenance, spanning a five-month period starting from September 4, 2023.
A portion of the recent announcement states that, following extensive deliberation and a vote by Lido DAO members, the most appropriate path forward was determined to be the gradual conclusion of Lido on Solana.
Although this decision was challenging due to the valuable relationships within the Solana ecosystem, it was seen as necessary to ensure the ongoing success of the broader Lido protocol ecosystem.
Lido Finance is positioned at the top of liquidity staking service platforms with the majority of the market share. The liquidity platform holds over 32% of the market and the decentralization proponents have concerns with it.
The community members proposed a self-limiting rule of 22% whereby liquidity protocols would impose the limit to stake only up to the said number. Ideally, this should maintain decentralization and keep any certain platform from holding a monopoly.
Though the majority of platforms agreed to the proposal and limited themselves, Lido Finance, which was already way ahead of the limit, indicated not considering the same. The community voted in favor of “not imposing a self-limit”.
Source: https://www.thecoinrepublic.com/2023/10/18/lido-dao-decides-to-abandon-solana-staking-due-to-finance-issues/