In a recently concluded voting program, it was revealed that over 92% of LidoDAO members (Lido token holders) of the decentralized liquid staking protocol Lido Finance, voted in favor of Lido ceasing its operations on the Solana Network.
LidoDAO Cut Ties With The Solana Network Following Community Vote
The proposal was first introduced by Lido on Solana’s peer-to-peer (P2P) team on September 5, due to financial limitations. Following the introduction, the voting program began on September 29, 2023, and was concluded a week later on October 6.
The P2P team in charge of the development of Lido on the Solana Network offered the community members two options in the voting program. These included the organization leaving the Solana Network, or providing funds to the organization to sustain its operations on the Solana Network.
In the proposal by the P2P team, Lido requested that LidoDAO provide $20,000 per month to fund technical maintenance activities related to sunsetting operations on Solana over the following five months. The proposal also expressed worries about not being able to meet goals in the next year due to the challenging 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 stated.
According to Yuri Mediakov, the P2P team invested a total of $700,000 in Lido on the Solana project to build and support the product in the past year but ended up making $220,000 in revenue, resulting in a net loss of $484,000. Therefore, in order to support the project for the next 12 months, the team would need around $1.5 million.
However, at the end of the vote, over 65 million (92.7%) of LDO tokens (voted by token holders) were in favor of sunsetting operations on Solana Network. Meanwhile, 5.1 million (7.2%) of LDO tokens voted in favor of providing funds to the organization to continue its operation on the Solana Network. The total number of Lido (LDO) tokens concluded in the vote was 70.1 million LDO tokens.
The organization highlighted in an excerpt that the decision was a necessary one to make despite how difficult it was:
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.
According to LidoDAO, the organization will cease accepting staking requests as of October 16, while users will have to unstake on Solana’s frontend by February 4, 2024. Failure to unstake before the deadline will result in unstaking through the Command Line Interface (CLI). In addition, Voluntary node operator off-boarding will commence on November 17, 2023.
Nonetheless, staked Solana (stSOL) token holders are still expected to receive rewards during the sunsetting process. However, Lido’s staking services are now solely supported on Ethereum and Polygon.
The P2P team has been working on Lido’s Solana project since acquiring it from Chorus One in March last year.
LDO falls to $1.5 | Source: LDOUSDT on Tradingview.com
Featured image from Exodus Wallet, chart from Tradingview.com