Lido Finance Halts Operations on Solana Following Community Consensus

Lido Finance, a decentralized liquid staking protocol, has decided to cease its operations on the Solana blockchain post a unanimous community verdict. This decision came into light on October 16, 2023, after an extensive dialogue and subsequent community voting within the Lido’s decentralized autonomous organization (DAO).

Sunsetting Justification

The cessation, termed as 'sunsetting', was primarily advocated by the peer-to-peer (P2P) team of Lido on September 5, underlining the unsustainable financial model and meager fees generated by Lido on Solana. The voting, which spanned a week, commenced on September 29 and concluded on October 6. The P2P team, having taken over the project in March 2022 from Chorus One, invested around $700,000 into Lido on Solana, generating a revenue of $220,000 which translated to a net loss of $484,000. The proposal put forth highlighted two pathways: either continue the development on Lido on Solana with financial aid from Lido DAO or sunset the operations on Solana. A significant 92.7% of the votes cast were in favor of halting the operations on Solana.

The P2P team elaborated on the scenario by presenting two options to the Lido DAO: to continue the development on Lido on Solana with financial backing from the Lido DAO, or to sunset Lido on Solana. After a rigorous discussion and community voting, a majority of Lido DAO members opted for winding down Lido on Solana.

Impact on Users and Node Operators

Post the sunsetting, Lido will not accept any new staking requests starting October 16. For existing staked Solana (stSOL) token holders, the network rewards will continue throughout the sunsetting process. They will have the opportunity to unstake via the Lido on Solana frontend until February 4, 2024; post this date, the unstaking process will shift to the Command Line Interface (CLI). 

On the node operators' end, a voluntary off-boarding process will commence from November 17, 2023. P2P Validator and Lido NOM contributors are slated to provide the requisite instructions for voluntary off-boarding through Lido community channels. Operators willing to exit the pool can shut down their nodes following the off-boarding process, while those choosing to stay will retain their remaining stake on their nodes.

Financial Backing for Sunsetting

An earlier version of the proposal had Lido seeking $20,000 per month from Lido DAO to support the technical maintenance involved in sunsetting operations on Solana over the subsequent five months.

Reflecting on the Journey

The closure of Lido on Solana doesn't reflect on Lido contributors' belief in Solana’s potential and longevity. The statement from Lido articulates that despite the end of this chapter, the optimism for Solana’s future remains robust among Lido contributors.

In retrospect, the journey with the Lido on Solana protocol has been described as momentous, marked by overcoming challenges and celebrating milestones. The community and the stakeholders are urged to stay connected for further updates through Telegram, Discord, or Twitter, as the gratitude towards Solana stakers, builders, and ecosystem partners is expressed.

Image source: Shutterstock