Good day everyone,
I hope you are all well and having excellent day, welcome to CryptoGod-1’s blog on all things crypto. In this post I will be reviewing the recent community vote on Lido which resulting in the sunsetting of Solana (SOL) staking.
DAO Votes to end Solana Operations
The Lido Finance community has decided to end its Solana (SOL) operations following a vote by its DAO, who decided its for the best if they sunset the staking protocol. Lido, a decentralised liquid staking platform, announced the news as part of a blog post on Monday the 16th of October 2023. Within the post they stated how the phasing out of the Solana staking product will begin shortly.
“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. 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 the results of a vote which ended on the 5th of October 2023, according to a Snapshot, 65 million of the Lido (LDO) holders voted for the sunsetting of the Solana blockchain, with only 5.1 million saying yes to providing funding for the protocol to sustain Lido on Solana, meaning they will discontinue accepting new requests for staking of the token. The snapshot post also revealed that they will aim to cease Solana operations by the end of February 2024, with locked up tokens becoming available from then. Latest figures have revealed that around $55 million worth of SOL tokens are locked on Lido, which is a significant drop from the peak of $440 million in April 2022. The move came after the platform noted:
“Similar to the sunset of Lido on Kusama and Lido on Polkadot, a 100k DAI budget would be allocated to cover the sunset costs.”
The Lido on Solana development team floated a proposal which outlined the difficulty and required financial support to maintain Lido on Solana. The P2P contributor noted that 1.5 million DAI tokens would be required to fund a further 12 months of operations, citing the unsustainable financials and limited amount of fees generated by the Lido on the Solana protocol. The previous year saw loses of over $480,000 against the $700,000 or so spent to build the product, with profits having only generated around $220,000. Therefore there was an overriding sentiment of being unable to achieve objectives in the next year due to difficult market conditions.
As a result, the team's proposal noted an overwhelming feeling that even achieving 2% of the Solana market share during 2023/24 is improbable, especially given the current Solana market. The team sought financial support from Lido DAO to sustain their efforts and elevate Lido on Solana to the next level, but also proposed to sunset the process of Solana if financial support from the DAO was unavailable.
“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 Solana development team had been optimistic that Lido on Solana could have played a pivotal role in its growth, while they also believed the DAO community would collectively support the proposed financial backing, however the community did not react as had been anticipated.
“With the proposed financial backing, we can not only sustain our operations but also innovate, grow, and contribute more value to the Lido DAO and the broader Solana ecosystem.”
Have a great day.
Peace. CryptoGod-1.
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