Solana’s Liquidation Was “Deemed a Necessity” After Low Fees, Says Lido Finance

Solana’s Liquidation Was “Deemed a Necessity” After Low Fees, Says Lido Finance

Decentralized liquid⁢ staking protocol Lido Finance has announced the decision to cease operations on the ⁣Solana​ blockchain following a community vote in the Lido Decentralized Autonomous Organization.

The proposal to delist ⁤Lido on Solana was ⁢first made on September 5‌ by Lido’s peer-to-peer team, citing unsustainable​ financials‍ and low fees from Lido on​ Solana. Voting began on September 29th and ​ended ‌a week later on October⁢ 6th.

“After extensive​ discussion on the DAO forum and subsequent ​community voting, the ‌decommissioning of​ the Lido-on-Solana protocol has been approved by Lido token holders and the process will begin​ shortly,” Lido explained in a post from October 16th. ‌Lido will no longer accept staking requests from October 16th.

Voluntary offboarding of node operators​ begins on November ⁣17th‌ and Lido users have until‍ February 4th to de-stake on Solana’s frontend.

“After this date, unstaking must be done via the CLI,” Lido added.

⁤The previous proposal was for Lido to request $20,000 per month from Lido DAO to support technical maintenance related to the⁢ cessation of operations⁤ on Solana over ⁣the ⁤next five months.

Lido’s P2P⁤ team has been working on‍ the Lido ⁢on⁤ Solana project since acquiring it from Chorus One in March 2022.

Since the acquisition, the P2P team has​ invested around $700,000 in Lido on Solana and generated $220,000 in​ revenue, resulting in a net loss of $484,000, according to Mediakov, the author of the proposal.

The alternative ​in the September 5th proposal was‌ to provide Solana with more Lido DAO funds – however,⁤ 65 million​ (92.7%) of the 70.1‌ million LDO tokens ‌(from token holders) voted voted) to stop operating‍ Solana instead, according to open-source voting platform Snapshot.

Lido⁣ explained that the decision was difficult but necessary:

“While this decision was difficult given the numerous strong relationships across the ⁣Solana ecosystem, it was viewed as a necessity ​for the continued⁤ success of the broader Lido protocol ecosystem.”

Lido confirmed that ‍staked ⁢Solana (stSOL) token holders will ⁣continue to receive network rewards throughout the expiration process.

Lido’s staking services are now only supported on ‌Ethereum and Polygon, where, according to Lido’s‍ website, $14 billion and 80 million US dollars will be invested.

Lido launched⁣ on⁢ Solana⁢ on September 8, 2021, when SOL fell by $24 and the⁢ price was at $189 – an 87% drop from the current​ price of $24, according to CoinGecko.

Despite ​the news, ⁣SOL is up 8.6% in the last ⁣24 hours. SOL price movements in the‌ last seven days. ⁣Source: CoinGecko

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