DeFi Platform Lido Votes Against Supporting New Terra Blockchain
Terra's revival plan was approved by network validators earlier Wednesday.
May 25, 2022 at 12:22 p.m. UTCUpdated May 11, 2023 at 4:19 p.m. UTC
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Decentralized finance (DeFi) project Lido Finance voted overwhelmingly against supporting the new Terra blockchain, with fewer than 5.5% voting in favor. The revival plan was approved by Terra’s network validators today.
- Lido, a liquid staking protocol, is the fourth-largest DeFi platform, with $8.43 billion in total valued locked, according to DeFi Llama.
- Kwon's proposal is to carry out a hard fork of the blockchain, with the original chain continuing as Terra Classic. The new one will focus on attracting DeFi applications.
- A hard fork involves splitting the chain on which a protocol runs into two, with the new branch using a different set of rules. It represents an opportunity for Terra to perform a reset on its failed project, which saw native stablecoin UST and sister token LUNA collapse to near zero earlier this month.
- However, initial reaction to Kwon's plans was largely negative with some 92% of 6,220 Terra community members voting against the change.
- Goldman Sachs (GS) flagged Lido as illustrative of how decentralized finance can amplify systemic risk in a note released Friday, citing the protocol's links to Terra's Anchor protocol.
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Jamie Crawley is a CoinDesk news reporter based in London.