Decisive Move: Lido DAO Concludes Solana Staking Amidst Financial Challenges
Leading decentralized liquid staking platform Lido Finance has made a significant decision regarding its Solana (SOL) staking offering. Lido DAO has opted to conclude its operations on the Solana staking project due to financial challenges faced by the P2P team.
In an announcement from the team, they stated that the winding down of the project would occur gradually over the upcoming months. Holders of the stSOL token have until February 2024 to unstake their assets using the Lido on the Solana front end.
Community Vote and Decision Making
The choice to discontinue Lido’s liquid staking solution on the Solana blockchain followed an extensive DAO discussion and community vote, as announced on Monday, October 16, 2023.
According to the results obtained from a snapshot, more than 92% of Lido token holders voted in favor of discontinuing the Lido on Solana protocol. Slightly over 7% of the voters chose to provide funding to the project.
Financial Overview and Project Winding Down
Yuri Mediakov from P2P, presenting the proposals, outlined project and business developments along with profit and losses. The team invested approximately $700,000 in development and support but generated revenue of only $220,000, resulting in a loss of $484,000.
The proposal also indicated that if the community opted to wind down the project, the team would require $20,000 in monthly support from the Lido DAO for technical maintenance, spanning a five-month period starting from September 4, 2023.
Impact on Decentralization
Lido Finance holds over 32% of the market share in liquidity staking service platforms. Concerns were raised about the platform’s dominance, leading community members to propose a self-limiting rule of 22%. This rule aimed to maintain decentralization and prevent any single platform from holding a monopoly.
While most platforms agreed to the proposal and limited their stakes, Lido Finance, already exceeding the limit, decided against imposing a self-limit. The community voted in favor of “not imposing a self-limit,” allowing Lido Finance to maintain its existing position despite the concerns raised.
