LDO token takes a hit after Lido DAO votes to end liquid staking on Solana
Lido DAO sunsets Solana project due to financial issues, backed by 92% community vote.
P2P team considered $1.5M funding or Solana exit due to $484,000 losses.
Solana staking to be halted by February 2024.
In a decisive move, Lido DAO has chosen to sunset the Lido on Solana project, following a resounding community vote in favour of this course of action. The decision has been attributed to the project’s financial constraints, leaving it unsustainable.
Following the move, the value of the LDO token, Lido DAO’s native cryptocurrency, has dropped by almost 4% in the past few hours.
Sunsetting Lido on Solana
The Lido on Solana project will undergo a phased sunset process over the coming months. Notably, stSOL token holders will have until February 2024 to unstake their assets through the Lido on the Solana frontend.
This decision was reached after extensive deliberations and a community vote, with over 92% of Lido token holders endorsing the sunsetting of the Lido on Solana protocol. The alternative option, which garnered just over 7% support, involved providing additional funding to the project.
The P2P validator team, responsible for Lido on Solana, presented two scenarios to the community. The first scenario was to infuse $1.5 million in funding to sustain the project, while the second was to exit the Solana blockchain.
The financial details revealed that the team invested approximately $700,000 into development and support, but their revenue amounted to only $220,000, resulting in a significant loss of $484,000. Should the community have chosen the sunsetting option, the P2P team would have relied on $20,000 per month in support from Lido DAO for technical maintenance over a period of five months, commencing from September 4, 2023.
The decision to wind down the Lido on Solana project, despite strong relationships across the Solana ecosystem, was deemed necessary for the broader success of the Lido protocol ecosystem.
This isn’t the first instance of Lido discontinuing its liquid staking solutions. Prior to this, Lido had already ceased liquid staking operations on Kusama and Polkadot.
The sunsetting process on Solana will include an immediate halt to staking, voluntary off-boarding for node operators beginning on November 17, 2023, and a final date for stSOL token holders to unstake by February 4, 2024, via the Command Line Interface (CLI).
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