Decentralized liquid staking giant Lido Finance has decided to discontinue accepting new requests for staking solana (SOL) token following Lido's LDO token holders' lopsided voting in favor of halting the service.
Staking SOL on Lido is no longer available for new users, while the front end will cease to be able to unstake existing tokens in February 2024. As of Tuesday, some $55 million worth of SOL tokens are locked on Lido, data shows, a significant slump from the April 2022 peak of $440 million.
“After much discussion and a vote by Lido DAO members, it was decided that the best course of action would be to wind down Lido on Solana,” Lido developers said in a post.
“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," developers added.
Over 92% of the Lido community voted to sunset the product instead of choosing to continue the service, a vote that ended on October 5 shows. In discussions preceding the vote, some community members pointed out that the high costs quoted by P2P developers to maintain the service were a point of contention.
DAOs, short for decentralized autonomous organizations, are a blockchain-based form of organization or company that is often governed by a native crypto token. Staking refers to locking up tokens on a protocol to help validate transactions and maintain a blockchain network in return for rewards.
A proposal floated by P2P Validator, the developers who built the product on Lido in early September, revealed that they took losses of over $480,000 in the past year against the $700,000 spent to build the product. It shared concerns about being unable to achieve objectives in the next year, citing difficult market conditions.
“Achieving even 2% of the market share in 2023-2024 seems improbable, particularly in the current Solana market, without any marketing assistance and given Lido DAO’s committee resolution 22 to discontinue all incentives in Solana,” the team’s proposal said.
P2P Validator sought funding from Lido in its proposal to continue offering the SOL staking product to users, in the absence of which it would have to sunset the product.