DEFI

Lido protocol exits Solana! Development team proposes fundraising plan, admitting financial difficulties.

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Lido protocol exits Solana! Development team proposes fundraising plan, admitting financial difficulties.

The leading on-chain liquidity staking protocol, Lido, announced through a blog post that it will cease its services on the Solana network with immediate effect. Node operators and users are required to gradually withdraw from the platform within the next 4 months. The development team admitted that the costs of development and operation on Solana have consistently exceeded the revenue generated by the service, resulting in a loss of $484,000 within a year.

Lido Protocol on Solana to Cease Operations

The largest liquid staking protocol on Ethereum, Lido, announced today that it will gradually shut down its protocol on Solana, citing high development costs and underperformance in profitability as the reasons for this decision.

Prior to this, the MixBytes team, responsible for Lido's technical development on Polkadot and Kusama protocols, had expressed their intention to withdraw from the two protocols in March of this year, and officially ceased operations in August.

DeFi researcher Ignas praised the move, stating that it will allow competitors more room for development. Projects such as Marinade Finance and Jito, the runner-ups in the liquidity staking project on the chain, are expected to benefit the most.

Developer P2P Proposes Fundraising Plan

It is reported that the technical team P2P Validator, responsible for the development of Lido on Solana, had previously disclosed the operational status to the community, explaining the current losses and submitted a fundraising proposal to Lido DAO.

We have invested over $700,000 in Lido on Solana for development and maintenance, but our income to date is only about $220,000. In other words, we are currently at a loss of approximately $484,000.

The proposal outlines two options:

  1. Seeking a total of $1.5 million in funding from Lido DAO over the next year for development costs and establishing partnerships, etc.
  2. Initiating the closure process to gradually stop the Lido service on Solana within the next 5 months.

The proposal also stated that P2P Validator expects that through this funding, Lido will gain over 1% of the Solana staking market share, which is expected to bring in approximately $200,000 in stable income.

Finally, the results of the community vote that ended on October 6 showed that as many as 92.7% of participants voted in favor of stopping the protocol, and Lido on Solana will enter the shutdown process.

Shutdown Schedule

Lido emphasized that during the process of shutting down the service, protocol stakers can still receive stSOL rewards, but must cancel their staking through Solana's Lido page by February 4, 2024 at the latest.

  • October 16, 2023: No new staking on Lido on Solana will be possible.
  • November 17, 2023: Node operators will begin to exit the protocol.
  • February 4, 2024: The Lido protocol on Solana will be closed. After this date, staking can only be canceled via the command line interface (CLI).