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Lido Finance, a leading decentralised liquid staking protocol with over $14 billion in total value locked (TVL), has announced the sunsetting of staking services for Solana (SOL). Lido’s expansion in the proof-of-stake ecosystem was first announced for Solana in May 2021.
Lido on Solana sunset
Specifically, staking SOL on Lido has officially closed for new users. Meanwhile, Lido Staked SOL (stSOL) holders will continue to earn staking rewards throughout the phased shutdown period. Lido on Solana will also support the unstaking of stSOL via protocol’s frontend up to February 4, 2024 when the service will only be accessible via the Command Line Interface (CLI).
The move comes after a community vote adopted a proposal by the Lido on Solana developer team, a blog announcement stated. The Lido team wrote:
“The Lido on Solana sunsetting comes after a proposal was put forth to the Lido DAO by P2P Validator (the Lido on Solana development team), outlining the achievements, challenges, and future prospects of Lido on Solana.”
The P2P Validator’s proposal envisioned two scenarios for the project – either have Lido on Solana continue but “with financial backing from the Lido DAO”, or to end support. The Lido DAO community voted to sunset the staking operations on Solana, as noted in the announcement.
“Whilst this decision was difficult in the face of numerous strong relationships across the Solana ecosystem, it was deemed a necessity for the continued success of the broader Lido protocol ecosystem,” they added.
Per the P2P team, setting up and operating the Lido on Solana service cost approximately $700,000. However, the challenging market conditions and other factors had resulted in loss of more than $480,000. To continue would have required significant financial input from the DAO, which is what the community voted against with nearly 93% of LDO tokens (65 million out of 70.1 million).
Data from DeFiLlama showed the total value locked (TVL) of SOL on Lido was around $55.8 million as of Tuesday, 17 October. This accounted for just 0.39% of the Lido TVL and is a significant decline from the highs of $440 million recorded in April last year.
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