A community member, kentie, recently published a proposal suggesting the discontinuation of support for Polygon (MATIC) on Lido, the Ethereum (ETH) liquid staking solution. This proposal comes months after Lido paused MATIC’s staking and withdrawal functionality due to a bug affecting stMATIC withdrawals.
Reasons for Sunset
According to the proposal, the decision to sunset MATIC staking is driven by several factors:
- Lackluster revenue generated by the protocol from Polygon.
- Brand risks associated with Polygon.
- Uncertainty surrounding Polygon’s roadmap.
- Reputational risk to Lido due to recent incidents related to Polygon.
Kentie also suggests transforming Lido into a native ETH liquid staking provider, thereby avoiding risks associated with smaller pockets of Total Value Locked (TVL).
Opposition from Lido Team
Despite the proposal, Marin Tvrdić, the protocol relations contributor for Lido, opposes the idea. He argued that the recent incident with Polygon should not be a reason for sunset, emphasizing that no stakers were impacted, and services resumed after a code audit. Additionally, Tvrdić clarified that the TVL metric mentioned in the proposal shows USD value, not Matic value, and that Lido on Polygon is near its all-time high in terms of staked Matic.
Lido’s Previous Decision
Kentie’s proposal follows Lido’s decision to shut down Solana operations on the protocol in the coming months. The Lido team stated that this move is necessary for the continued success of the broader Lido protocol ecosystem.
About Lido Finance
Lido Finance is a decentralized liquid staking platform supporting multiple sidechains and blockchain networks. Staking, a crucial feature in public chains using a proof-of-stake consensus mechanism, allows users to participate in network security. Validators, special node operators, stake a certain amount of coins to validate networks and earn network rewards.